Nikkei slides 6 percent (Monday) as yen advances, banks slide

[Newsjock]

Source: Reuters

TOKYO, Oct 27 (Reuters) - Japan's Nikkei average fell more than 6 percent on Monday to a 26-year-low, beaten down as Canon Inc and other exporters slipped on the yen's advance against the dollar and bank shares tumbled.

Shares of Mitsubishi UFJ and other large banks were hammered on concerns they may need to raise billions of dollars each to offset hefty losses on their stock portfolios.

Read more: http://www.reuters.com/article/marketsNews/idINTKW00309820081027?rpc=44

[opihimoimoi]

1. The World has been fucked by our GOP....

:puke:

[Whoa_Nelly]

2. Interactive chart

http://finance.yahoo.com/echarts?s=%5EN225#symbol=%5EN225;range=1d

[SahaleArm]

3. Deflation - DOW 5000 here we come n/t

[bemildred]

8. Yep, the price of everything is going down.

Our so-called leaders need to start thinking about what, in a fiat-money regime, is going to bring the deflation to a halt, because prices of commodities are arbitrary (because money is arbitrary) and will not do it.

[pam4water]

4. The Nikkei 225 is back at like 1983 levels! This might be the one thing that is not GOPs

fault. Japan has been in a depression since about 1990. They are an object lesson for how not to handle an economic crisis. One I keep hoping the USA wont follow. Hoping in vain. When the Japan stock and real estate bubble burst in 1990. They made 3 mistakes:

1.) The Japanese government didn't made the banks divulge all there bad loans and investments. Banks there can hold stock of companies and count them like almost deposits bad idea when the market goes down.

2.) They did not make the banks divest the bad assets just through money a the banks with out strings attached. Limiting the options the options the government had down the road to fix things.

3.) Left the interest rates effectively zero for years. So banks just borrowed form the central bank at near zero interest then bought government bonds and did not load to business and people.

Interest rate are still close to zero in Japan. Japan has exported some of their problem to countries like Iceland. Companies borrowed money from Japan for next to nothing threw it in Icelandic banks, that pay high interest. There was no way that banks in Iceland could keep paying all the interest on just Iceland's economy, so they bought real estate in Europe or Lent to people who bought real estate. That helped to drive of prices for commercial properties in Europe. And was some part of the bubble in European real estate. The of-course the bubble burst. So I'd say the economic collapse is only about 2/3 the GOPs. Splash some blame an Marget Thatcher too.

In ye olden days international capital controls helped to control problems like this!

[SahaleArm]

5. We're making the same mistakes and the Japanese were savers...

Americans on the other hand are debtors in a debt-driven nation. All I'm hearing from the Dems is that we'll spend our way out of this mess. No one will say the *D* word: deflation. Housing needs to deflate before the turnaround can happen.

[pam4water]

6. I was kind of disappointed when, Barnie Franks talks about supporting real estate prices

because that is not realistic. I guess you can't overwhelm people with too much bad news at one time. We also need to produce something in the USA other than crappy Windows Vista, corn and sub prime mortgage backed securities.

[Art_from_Ark]

9. As one who has lived in Japan since the "depression" started

I take issue with some of your remarks.

First of all, Japan is not in a "depression", at least not in the classic sense. Sure, some areas are depressed, like some rural areas, old steel mill towns and what not, but the economy here is a far cry from "depression". If Japan is in a depression, then so is just about every other country on the planet.

I don't know where you got the idea that banks won't loan to customers. I am often accosted by people in front of train stations handing out flyers from banks advertising home loans at various percentage rates. My local bank is also pushing "my car" loans, but why get a car loan when I can get a nice used car for a half month's salary? And you won't find a lot of Japanese taking out loans for appliances or vacations, because the attitude here is generally "If you can't afford it, you don't need it" (exceptions made for housing).

As for the approach that Japan took to deal with the bubble-- sure the interest on savings is near zero, but the bank crisis was handled in such a way that caused the least pain. And the Japanese banks seemed to have learned their lesson, as they mostly avoided the derivatives scams this time around.

[dipsydoodle]

7. Europe too

European markets have fallen sharply in morning trade, touching five-year lows, as investors continue to fret about the depth of the global economic slowdown.

The UK's FTSE 100 fell 5.6% to 3,665 at one point, its lowest level since April 2003, before recovering slightly to 3,693, down 4.9% from Friday's close.

Its decline came after Japan's Nikkei index earlier ended at a 26-year low.

The pound also continued its recent falls, dropping against the dollar to $1.5341 in early trading.

http://news.bbc.co.uk/1/hi/business/7692559.stm