Spero News- On Monday, fears of a US recession spilled over into Asian markets sending stocks tumbling. Indexes were hammered across the board in what turned out to be the worst day of trading since 2001.
In India, the Bombay Sensitive Index plunged 1408 points, to 17,605. In China, the Shanghai Composite dropped 266 points (or 5.5%) to 23,818, while in Japan, the Nikkei fell 535 points, to 13,325 points. The bloodletting stretched across the continent and into Europe where shares nosedived by more than 4% by mid-morning “putting them on track for their biggest one-day fall in more than four and a half years.”
The huge sell-off is a sign that global investors do not believe that the Fed’s rate cuts or President Bush’s $150 billion “stimulus package” can revive the flagging economy or breathe new life into the over-extended US consumer. After Monday’s sharp downturn, the prospects for averting a deep and protracted recession are slim to none.
Economics Professor Nouriel Roubini summed it up like this nearly a month ago: “The United States has now effectively entered into a serious and painful recession. The debate is not anymore on whether the economy will experience a soft landing or a hard landing; it is rather on how hard the hard landing recession will be…..
