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Posted by admin on 2019-01-12 in 上海性息 with No Comments

The human dimension of the current turmoil emerged in Hong Kong where thousands of savers mobbed branches of the Bank of East Asia to withdraw deposits, fearing their money was endangered because of the bank's exposure to Lehman Brothers and AIG.


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IN-DEPTH: Financial meltdown

Police were called in to control crowds after text messages flashed across the city warning the bank was unstable as it held a large number of assets linked to the failed Wall Street bank and the troubled insurance giant.

But the bank and the city's financial authorities moved quickly to rebuff the claims, insisting that BEA was in a solid financial position.

As the US Congress was to begin a second day of debate on the $700-billion bailout of troubled US banks, President George W. Bush predicted that a strong recovery package would come together.

“There's ample debate but I am confident that when it is all said and done, there will be a robust plan — and there needs to be,” Bush said.

Political deadlock

US lawmakers were meanwhile digging in their heels against the bailout, setting the scene for a showdown on Capitol Hill watched anxiously by markets around the globe.

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were facing testimony in the House of Representatives after meeting stiff resistance on Tuesday by Senators balking at a swift passage of the bailout.

Bernanke and Paulson insisted that failure to pass the emergency measure quickly would put the entire US economy at risk but lawmakers were unwilling to let Wall Street off the hook at the huge cost to US taxpayers.

“What they have sent to us — this is not acceptable,” Democratic Senator Christopher Dodd, chairman of the Senate Banking Committee, told reporters after Bernanke and Paulson testified on Tuesday.

Markets jittery

The bickering in Washington sparked fears the package could either be stalled or undermined, leaving global stock markets jittery.

Wall Street's Dow Jones Industrial Average advanced by just 0.14 percent opening trade while share prices in Europe were in decline.

London's FTSE 100 index of leading shares eased 0.37 percent to 5,117.05 points. Frankfurt's DAX 30 slid 0.25 percent to 6,053.19 points and in Paris the CAC 40 dipped 0.36 percent to 4,124.80 points.

Prices had earlier firmed in Asia.

'Prepare for worst case scenario'

“We continue to bounce from boom to gloom,” said Richard Herring, director at Australia's Burrell Stockbroking, amid concerns that the crisis is comparable to the slide towards the 1930s Great Depression.

The head of the International Monetary Fund, Dominique Strauss-Kahn, told Germany's Allgemeine Zeitung that this is “first and foremost an American crisis.

“European banks have also suffered losses … but all in all they are in a better state than American ones. But it might be advisable for the Europeans to prepare for the worst case scenario.”

Markets earlier in the day gained some support from legendary US investor Warren Buffett, who announced a 5.0-billion-dollar investment in humbled Wall Street bank Goldman Sachs.

'Financial hurricane'

The US central bank, the Federal Reserve, meanwhile offered another $30 billion to dollar-starved foreign markets via central bank “swap” deals.

Other leading central banks continued to provide special rolling funds to open up fear-strangled interbank lending.

The head of the World Trade Organization Pascal Lamy stressed that the “current hurricane” hitting financial markets must not discourage efforts for greater international economic openness.

“One of the important lessons of the Great Depression, which we must not forget, is that protectionism and economic isolationism do not work,” he said in Geneva.

Systemic uncertainty also weighed on the US dollar, with the euro rising to 1.4723 dollars from 1.4657 dollars on Tuesday.

FBI probing 'Wall Street fraud'

There is widespread incomprehension and outrage at how a downturn in the subprime — or high-risk — US mortgage market could have developed and spread abroad while some bankers in the field were earning huge bonuses.

US reports said the Federal Bureau of Investigation was looking into allegations of fraud by 26 Wall Street firms, including several of the names at the eye of the storm including Lehman Brothers, Fannie Mae, Freddie Mac and insurer AIG.

FBI spokesman Richard Kolko told ABC television the bureau “currently has 26 pending corporate fraud investigations involving subprime lenders.”

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