Japan is obviously in panic at this stage, as Nikkei extends decline to close at 7162.90 -6.36% from the previous close, as I am writing this. The Nikkei fell to new lows since 1989, at 38900ish, and still making new lows today. Do you think we could still see it happen in the next decade? Although Japanese banks have been relatively unharmed by the credit crisis, but a dip in the equity prices of Japan has caused a relative damage to their balance sheets.
Over the weekend, China, Japan and Korea agreed to act together any day if and when it is needed, where Japan has a free hand on Yen with the support of China.
Hong Kong on the other hand, as I am writing, is down by 12.16% at 11,083.63 -1534.75. I believe the double whammy may have been accompanied with Li Ka Shing's comment last week, in a declaration that Hutchison Whampoa will not move forward with further acquisition until June 2009, as he has always been a good indicator to many people in Asia.
Let's look at a series of financial news where we can access from one of the big newswire:
- European banks will be in trouble next, as according to a news report from Telegraph, they are discovered to own 75% of debt from the emerging market economies. Will the Euro go into parity with the USD, as forecasted by BNP Paribas?. To read the article, click here.
- HSBC and Santander are beginning to face pressures. Click here
- AIG needs more money again, as $123B is not enough. Click here
- Russia may default next. Click here
- School in trouble due to failure of renowned hedge fund. Click here
- Taiwan Dumps Fannie, Freddie and Uncle Sam? Click here
With the string of events mentioned above, we seem to be in a crisis that is very much worse than what I have personally encountered in 1997 (Asian Financial Crisis) and 1992 (ERM Crisis).
Currently, all eyes may be eyeing on China to intervene into the stock markets, where in my opinion, that might only happen if the intervention is a global joint intervention. I believe a 10 billion dollar in HK and China stock markets each, could put a strong support to HK equities.
For the Singapore markets, the climax may come about from further news on Las Vegas Sands, as most Singaporeans banks has lent them a huge amount to finance their projects. This could also pose a threat on Singapore property prices, as the housing bubble has been largely influenced by the expectation that the Integrated Resort would prop up prices in the local property market.
Let us just keep a good lookout at the US stock market tonight, it should be another spectacular one.
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