Asian stocks fall after Senate approves bailout

[OhioChick]

Source: REUTERS

2 Oct, 2008, 0816 hrs IST, REUTERS

HONG KONG: Asian stocks and the US dollar reversed earlier gains while safe haven bids such as US Treasuries rose even after the U.S. Senate approved
a $700 billion bailout plan of the financial system.

Japanese and South Korean stocks accelerated their losses after the approval, helping the MSCI index of Asia-Pacific stocks outside Japan dip down 0.7 percent, reversing a modest gain immediately before the U.S. Senate vote.

"They still need to get this through the Congress, so it may be a bit of an anti-climax after all," said Howard Gorges, vice chairman with South China Brokerages.

"We also had some not-so-favorable economic data coming out of the U.S. last night, so people are back to worrying about the economy."

The dollar, which had hovered near a one-year high against a basket of currencies earlier in the day, also cut part of its gains, with a key dollar index up 0.17 per cent.

Short-term U.S. Treasuries turned positive, erasing earlier losses as investors again moved toward safe haven bids.

Read more: http://economictimes.indiatimes.com/Asian_stocks_fall_after_Senate_approves_bailout/articleshow/3551836.cms

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Do they know something that we don't know?

[ixion]

1. "US dollar reversed earlier gains"

watch for the dollar to fall like a stone, now that we've set up Wall St. for life.

[John Q. Citizen]

2. And watch oil jump.

[Wizard777]

5. We have to refigure our calculation on oil prices.

Some members of OPEC have switched from the dollar to the Euro as petrol currency. But as our problems have revealed. The Euro is only slightly more stable than the dollar. Trouble in the American finacial market can reflect in a decline in the value of the Euro.

[tismyself]

3. dollar will flat line

It won't be worth as much as the old Confederate dollars.

[Critters2]

7. What I've been saying all along. Won't be worth the paper it's printed on. nt

[girl gone mad]

14. And don't count on 10% returns in the stock market anymore.

Not that we've seen those since Bush took office.

[Wizard777]

4. That is actually good news. They are banking on our financial demise.

[Adsos Letter]

6. They know that we are getting ready to pay premium prices....

for a bunch of worthless scrap paper...

[Kaleko]

8. Traders buy on the rumors, sell on the news.

Now that it's clear that the bailout is coming, the dollar falls due to fears of hyperinflation.

[Dr.Phool]

9. And you better believe it's coming.

[Kaleko]

10. Other major currencies are at risk too. Everything is interconnected.

This is not just a calamity, it also hammers home the fact that we are a global organism with interwoven vital systems that all have to cooperate together.

Crisis/Opportunity thing, you know.

[clear eye]

11. They think the plan is a disaster for our economy and that

we've lost our minds to spend all our remaining borrowing power on bad paper chosen by a corrupt Bush appointee Wall St. insider w/o even getting equity in those who we rescue.

The dollar had risen when it looked like the House was rejecting the bill, and dipped since it appears it will pass. Lord help us all.

[debriefed]

12. Weren't stocks supposed to skyrocket?

What happened there?

[NeoConsSuck]

13. Because they realize what the bailout really is

it doesn't even help the banking industry as a whole, or help unfreeze the credit markets. It takes 700 billion of taxpayer money, gives it to Paulson, and he re-capitalizes the banks of his choosing.

If they really wanted to unfreeze the credit markets, and keep the economy chugging along, the government should have become 'Lender of last resort' and used the 700 billion to lend to these small companies that are finding it hard to get these short term loans now.

But that idea wouldn't have helped Paulson's friends. They still would have had to carry the toxic waste on their books and not throw it on to the taxpayers.

But investors are not stupid. They realize that even as Paulson fleeces the taxpayer, in the end the plan offers little help to the global economy. Japan's market tanked overnight. US futures are down.

From Bloomberg:

Oct. 2 (Bloomberg) -- U.S. stock futures slumped, reversing earlier gains after the Senate approved a $700 billion bank rescue plan, on concern the package will fail to stem an economic slowdown.

Investors sold the futures and Asian stocks retreated, led by automakers and commodity producers, after U.S. car sales plunged the most in 17 years. The relief measure, which was rejected earlier by the lower house of Congress, authorizes the purchase of troubled assets from financial companies. It passed with a 74-25 vote.

http://www.bloomberg.com/apps/news?pid=20602003&sid=aJOdaWtDFZ74&refer=world_indices