Is Asia Going To Be The Safe Haven?

[ray23]

I have thought that the answer was yes, but I'm beginning to wonder.

If stocks are any indicator it certainly look like they are in trouble as well

Inflation seems to be a big problem for China, India, Australia, Vietnam and I think we might want to add Thialand to that list. The E.U. has made it very clear they are concerned about it.

Watching Thai T.V. last night they had a segment on Pork prices answer ser prices at below 60 baht per Kilo, but no relief to the farmer buying feed. Somehow I don't think that is going to work.

The general thought that I have seen is that Asia will notice a bump in the road and it was the vehicle that would carry the world through this mess. The following article doesn't say that to me. What am I missing?

Asia Stocks Set for Biggest Weekly Drop Since August; BHP Falls

By Chen Shiyin and Emma O'Brien

March 7 (Bloomberg) -- Asian stocks fell, set for their biggest weekly drop since August, as record home foreclosures in the U.S. fueled speculation global loan defaults will increase.

National Australia Bank Ltd. plunged in Sydney to the lowest in more than three years, while Sumitomo Mitsui Financial Group Inc. dropped in Tokyo as gauges of credit risk in the region rose to records. Sony Corp. and Nintendo Co. led declines among companies reliant on U.S. sales. BHP Billiton, the world's largest mining company, retreated on lower metal prices.

``All the uncertainty in the U.S. and surrounding the credit crunch is bearing down again on markets around the world,'' said Shane Oliver, who helps manage the equivalent of $113 billion at AMP Capital Investors in Sydney. ``Asian markets look like they're going to re-test their January lows.''

Financial stocks were the biggest drag on the MSCI Asia Pacific Index, which slumped 2.8 percent to 139.93 as of 3:33 p.m. in Tokyo. The benchmark, which lost 5.2 percent in the past five days, has declined 11 percent this year and touched a 14- month low on Jan. 22, on concern that a housing slump will drag the U.S. into a recession.

The MSCI index's weekly loss will be the largest drop since the period ended Aug. 17, when stocks fell amid concern U.S. mortgage lender Countrywide Financial Corp. would go bankrupt.

Japan's Nikkei 225 Stock Average retreated 3.3 percent to 12,782.80. It declined 6 percent the past five days, the biggest loss since the week ended Aug. 17. Australia's S&P/ASX 200 Index tumbled 3.2 percent, the most in a month.

Foreclosures

Australia's Allco Finance Group Ltd. plunged as banks seized shares as collateral for unpaid loans. Tokyu Land Corp. and Hong Kong's Sun Hung Kai Properties Ltd. fell on broker downgrades. Pioneer Corp. dropped in Tokyo after the Nikkei newspaper said the company will report a loss.

In the U.S., the Standard & Poor's 500 Index fell 2.2 percent to the lowest since September 2006 after mortgage foreclosures jumped to 0.83 percent of all home loans in the fourth quarter, from 0.54 percent a year earlier.

The measure of financial shares on MSCI's Asian index lost 3.6 percent today, taking its weekly decline to 7.9 percent. The gauge has slumped 18 percent this year, the biggest drop of the regional benchmark's 10 industry groups, as global losses and writedowns on U.S. subprime mortgages swelled to more than $180 billion.

National Australia, the country's biggest bank, dropped 5.4 percent to A$26.93, its lowest close since September 2004. The shares also retreated after Citigroup Inc. cut its rating to ``sell'' from ``buy.''

Higher Risk

Sumitomo Mitsui, Japan's second-largest publicly traded bank, lost 6.3 percent to 684,000 yen, the lowest level since May 2005. Mitsubishi UFJ Financial Group Inc., the country's No. 1 bank, lost 4.2 percent to 862 yen. HSBC Holdings Plc, Europe's biggest bank by market value, fell 2.5 percent to HK$118.50 in Hong Kong.

The cost to protect corporate bonds in Australia and Japan from default rose the most since the gauges were first compiled in 2004, as rising funding costs for banks stoked concerns financial firms may collapse. Credit-default swaps on National Australia Bank and Westpac Banking Corp. were among the worst performing U.S. dollar contracts today, Bloomberg data shows.

Allco, an Australian asset manager that breached loan obligations, plunged 17 percent to 52.5 Australian cents after banks seized 14 percent of shares in the company as collateral for unpaid debt owed by management.

`Pessimistic'

National Australia Bank took possession of 34.5 million shares while Bank of Scotland International Ltd., a unit of HBOS Plc, seized 18.3 million, Sydney-based Allco said in a statement.

Sony, the world's second-biggest maker of electronics, fell 5.1 percent to 4,610 yen, while Nintendo, the maker of the Wii game console, slumped 5 percent to 53,000 yen. The companies both generate more than a quarter of their sales from the Americas.

``In terms of the real U.S. economy, I'm on the pessimistic side,'' said Masahiko Ejiri who helps manage $26 billion at Mizuho Asset Management Co. ``I've been focusing on domestic demand Asian stocks'' rather than exporters.

BHP dropped 2.3 percent to A$38.88, halting a three-day, 3.1 percent advance. Rio Tinto, the third-biggest miner, fell 3.5 percent to A$131.20. Nippon Mining Holdings Inc., Japan's largest copper producer, slipped 3.5 percent to 601 yen.

Plasma Televisions

Copper prices dropped 2 percent in New York yesterday on speculation a slowing U.S. economy will erode demand. Platinum slumped 3.3 percent, the biggest decline in 15 months.

Tokyu Land plunged 10 percent to 609 yen, while Sekisui House Ltd., Japan's largest homebuilder, fell 4.8 percent to 917 yen. Credit Suisse downgraded shares of the two property developers to ``neutral'' from ``outperform.''

Sun Hung Kai, Hong Kong's biggest developer by market value, slumped 5.4 percent to HK$125.60. Citigroup cut its rating to ``sell'' from ``hold'' amid concern the company may complete fewer apartments this year than estimated by the bank.

Pioneer, Japan's No. 3 maker of plasma televisions, fell 5 percent to 1,151 yen. The Tokyo-based company will probably report a net loss for the year through March 31, after taking a charge to exit the plasma TV business, the Nikkei said.

Kyowa Hakko Kogyo Co., a Japanese drugmaker, surged 9.7 percent to 1,141 yen, the second-biggest advance on MSCI's regional index. Amgen Inc., the world's largest biotechnology company, agreed to pay as much as $520 million Kyowa Hakko for rights to an experimental drug.

To contact the reporter for this story: Chen Shiyin in Singapore at [email protected]; Emma O'Brien in Sydney at [email protected].

Last Updated: March 7, 2008 01:46 EST

[Naam]

If stocks are any indicator it certainly look like they are in trouble as well

What am I missing?

you are missing the fact that stocks are NOT necessarily always indicators whether economies are strong or weak. look at stock markets worldwide when the tech-bubble burst in 2000 and just before G.W. started his crusade into Iraq and take a look at the markets now.

[ray23]

Thanks Naam

[wasabi]

I've been buying silver this week. It was very volatile. I think indicative of moving to new highs next week.

[bingobongo]

sell japanese and US stocks and buy yen, the wheels will fall off China's wagon once the olympics are over and the US is in full blown recession, things are going to be fun......i feel sorry for the overleveraged fools....not

[ray23]

Maybe an answer would be China buying up some of the home loans, far fetched I know, but buying the dollar doesn't seem to be working all that great. Would that change things in the states and increase the value of the dollar, in the ones they current hold that are losing value?

"U.S. Dollar Depreciation `Negative' for China Economy (Update3)

By Josephine Lau and Wang Ying

March 8 (Bloomberg) -- The U.S. dollar's depreciation is ``negative'' for the Chinese economy, according to China's top currency regulator.

China will manage its foreign-exchange reserves ``according to set guidelines,'' Hu Xiaolian told reporters today in Beijing, where she is attending the annual meeting of the National People's Congress. ``To the extent that dollar depreciation is negative for the global economy, the Chinese economy will definitely be affected.''

A record trade surplus has flooded the Chinese economy with cash and drove the world's largest foreign currency reserves to $1.5 trillion by the end of 2007. Premier Wen Jiabao on March 5 warned of an increasing number of global uncertainties this year facing the economy, such as the dollar's decline and the U.S. subprime mortgage crisis.

``It's the frying pan or the fire for China,'' said Stephen Green, senior economist at Standard Chartered Bank Plc in Shanghai. ``If they stop buying U.S. dollars or diversify, this will only do further damage to their existing holdings.''

China, the second-largest foreign holder of U.S. Treasuries, said the declining dollar is a bigger concern for the Chinese economy than the yuan's gains, Chinese commerce minister Chen Deming said in December.

The dollar's depreciation makes major commodities such as gold and oil more expensive, and reduces the wealth of countries and companies that hold dollar assets, Chen said at the time.

China's economy, the world's fourth-largest, may grow 10 percent this year, according to the International Monetary Fund, down from 11.4 percent in 2007.

To contact the reporter for this story: Josephine Lau in Beijing at [email protected] Ying in Beijing at [email protected];

Last Updated: March 8, 2008 05:00 EST "

[IMA_FARANG]

<br />

If stocks are any indicator it certainly look like they are in trouble as well<br /><br />What am I missing?

<br />you are missing the fact that stocks are NOT necessarily always indicators whether economies are strong or weak. look at stock markets worldwide when the tech-bubble burst in 2000 and just before G.W. started his crusade into Iraq and take a look at the markets now.<br />

<br /><br /><br />

No stock markets are not any indication of the real status of a country's economy. In fact they are controlled by a small elitest minority of wealthy people and institutions.

Moreover, I think it is becoming very clear that the U.S. is on it's way to a best a deep slowdown, if not a full blown recession.

As the U.S. is a user of many of the exports from all around the world, including Asia, any decline in purchasing of those exports will be felt around the world.

For that reason, I think we are coming to a world-wide recession.

Of course that will affect Asia and Thailand. We will just have to see how deep and how long it will be.

Buy all the Silver and Gold you want.....can you eat an ounce of Silver or Gold? In a real deep worldwide recession (it may not come to that yet) who will have the money to buy your Gold or Silver?

This week some financial institutions in the U.S. are admitting that they don't have the resources to continue with their paying for the loans they made to the so-called "subprime market". And these institutions have connections all over the world. All it will take is for a couple of world-wide financial institutions to have to default, and the whole financial international house of cards can collapse.

So yes. if it is bad enough it will affect Asia. it just depends how bad it is, and how long it lasts.