Friday, October 10, 2008

Black Friday

This morning I came into the office and watched the Asian markets fall... further... and further.

Every few minutes the numbers would change for the worse, from Japan, to Hong Kong, Singapore and South Korea.

They were all getting a battering and trading was hardly halfway through the day.

All over the world investors are scared, and even multiple governments putting in monetary infusions aren't able to stem the fear.

Around this time last year the Hang Seng Index was over 30,000 points. Today it closed at 14,796.87.

In the evening Beijing time, the European markets opened sharply lower too, not a good start for what will now be called Black Friday.

While we're all waiting to see if the United States slides into a recession, hopefully China won't be too hard hit.

However, as it holds trillions of dollars worth of Treasury Bills, now is probably not the time for China to try to cash them in.

It'll have to wait a long time for the US to get back on its financial feet and be able to pay it back, if ever.

China meanwhile is trying to stimulate domestic consumption, cutting interest rates and even scrapping the income tax accrued on interest on savings.

But with most of the Chinese population making low salaries, it is highly unlikely they'll be able to keep the economy afloat by making 3,000RMB ($437.40) a month.

The country will have to depend on the ultra rich, the nouveaux riche with their brand name wardrobes and loud, demanding attitudes to keep spending, no matter how outrageously they flaunt their wealth.

And the rest of us will just have to grin and bear it, for the sake of the economy.

1 comment:

ks said...

it is a good wake up call for people of the world that greed will have you bleed. they have forgotten we need to have sweat on our faces before we eat bread.