Courtesy of Yves Smith, Naked Capitalism
Asia Getting Hammered, Discouraging Report on ECB Commitment
Wellie, nothing like a lack of leadership to turn an ugly market day into an utter rout. But in another sense, the fake leadership in lieu of real leadership (as in taking a tough stand now and again and bringing the public around) is what set up conditions for a spectacular market unwind in the first place.
It’s one thing to do the equivalent of put the financial system on life support to deal with a crisis, quite another to leave the patient on life support and pretend you’ve returned to status quo ante.
The downdraft continues. The Nikkei is down 4.4%, the Hang Seng is off 5.9% and the Korean stock indexes are all off more than 7%. S&P future are down 25.80. Gold is at $1756 and Brent is just below $100 a barrel . The yield on ten year Treasuries continues to fall and is now at 2.30%. The euro had fallen into 1.41 territory but is now at 1.4219. The Aussie dollar had fallen below parity but is back slightly above it.
The plunge in big bank shares in the US has apparently focused the minds of the officialdom. Bank of America closed down 20.3%, Citigroup was off 16.4%, and JP Morgan, 9.4%. The Financial Stability Oversight Council is meeting tonight. Per the Financial Times:
Regulators convened an emergency conference call of the Financial Stability Oversight Council, which brings together the Federal Reserve, the US Treasury and other agencies. But government officials said there was no evidence of broader systemic instability or institutions’ funding coming under pressure…
Read more here: Asia Getting Hammered, Discouraging Report on ECB Commitment « naked capitalism.
