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Nikkei pounded again; looking to the Bush administration for economic relief measures a bad strategy

January 21, 2008
By Ken Worsley


On Friday, Japan’s Jiji Press published an article with the headline, “Tokyo Stocks Seen Regaining Some Ground Next Week.” An excerpt:

Tokyo stocks are expected to recover some ground next week as buyers seek to benefit from attractive valuations and moves by U.S. policymakers to rescue the world’s biggest economy from the threat of recession.

“The time is ripe for an upturn for stocks,” Hideyuki Suzuki, senior analyst at Morningstar Japan K.K., said, explaining that the U.S. government and Federal Reserve are starting to take serious measures to shore up the flagging economy, while U.S. corporate earnings news has likely passed its worst for now…

…But stocks pared some losses late in the week thanks to a reported plan by the administration of U.S. President George W. Bush to launch an economic stimulus package and growing expectations of immediate and bold interest rate cuts.

Unfortunately, it seems everyone except for Jiji realized that the Bush administration’s “reported” plan is a joke. As John Fund from the Wall Street Journal commented on Bill Mahr’s show this week, “Is the solution these $250 rebates? I mean, we might as well just take a helicopter and spread it around the country.”

Of course, the Bush administration’s plan is a political ploy. And depending on the Bush administration during an election year to prop up your hurting stock market is, umm, well, (fill in the blank).

At any rate, the Nikkei got absolutely pounded today, losing 535.35 points to finish at 13,325.94. It’s now down 12.95% on the year. Could there be a recovery this week? Of course it’s possible. But Monday’s action dug an ugly hole.

Filed Under Equity Markets, Finance, Nikkei 

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Comments

5 Responses to “Nikkei pounded again; looking to the Bush administration for economic relief measures a bad strategy”

  1. Contrarian on January 21st, 2008 10:24 pm

    Maybe a sucker’s rally coming…

    What ever happened to decoupling? ;) Right, it was rubbish in the first place.

  2. Ken Worsley on January 21st, 2008 10:51 pm

    Worse than rubbish. If it’s true, it’s bad. From the Nikkei:

    “Brokers said stocks lost heavily in the morning on skepticism that a U.S. stimulus package unveiled last week may fail to buoy the economy of the biggest export market for Japanese firms. Stocks’ losses expanded in the afternoon as factors such as equity tumbles across Asia including China and India further dented sentiment on the Tokyo market.”

    (http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080121D21JF302.htm)

    Now they can shit the bed in the AM on US news and in the PM on Asia news.

  3. Matt Dioguardi on January 22nd, 2008 4:51 am

    The WSJ in their week-end op-ed said this:

    In his book “Manias, Panics and Crashes,” the economic historian Charles Kindleberger describes the stages of financial boom and bust. Students of the good professor will recognize where we now are in the current credit crisis: the panic stage. It isn’t a pretty sight, but a crash is far from inevitable if political and economic leaders keep their wits about them and focus on the proper remedies.

    You know things are seriously bad when the major financial daily says, don’t worry a crash isn’t inevitable. Like as in, if we’re lucky it won’t happen. Hm.

    But don’t worry, as I’m sure you know, Bernanke is getting the helicopters revved up:
    http://www.federalreserve.gov/boardDocs/speeches/2002/20021121/default.htm

  4. Durf on January 22nd, 2008 10:52 am

    Aaaaand things are looking swell this fine Tuesday morning, too. Ouch.

  5. Ken Worsley on January 22nd, 2008 11:05 am

    Tell me about it. Well, we might go into lunch down only 400.

    “Maybe a sucker’s rally coming…”

    Chances getting better and better…

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