Morgan Stanley became the next great Wall Street name in peril on Thursday with reports it was in talks to be bought by US Wachovia Corporation or a Chinese bank, as HBOS bank was bailed out in London.
With the flames of financial crisis outrunning renewed central bank intervention and the nationalization of US insurance titan American International Group (AIG), US media reports meanwhile said Morgan Stanley was looking for help.
The New York Times reported that Morgan Stanley, one of the last two independent US-based investment banks, was in talks to merge with Wachovia Corporation. Separately, CNBC business network said that the bank was in talks to be bought by the Chinese bank CITIC (中國國際信託投資).
Fears mounted that the US Federal Reserve’s US$85 billion loan to rescue AIG might not be sufficient to reverse a rout on financial markets.
The White House said on Wednesday that recent US economic news painted a “very mixed picture” but added that the US had “the strength” to overcome the financial crisis.
The latest US drama was unfolding against a background of plummeting global stocks and yields, or interest rates, on US Treasury bonds as investors rushed for the safety of government debt instruments.
Aaron Smith at Economy.com called the action “an unprecedented flight to quality,” adding: “Investor concern is also growing about the Fed’s ability to support markets in the future as the central bank’s own balance sheet is reduced.”
Asian stocks plunged further yesterday, tracking declines on Wall Street as investors feared more companies could succumb to the financial crisis.
Hong Kong’s Hang Seng Index, which sank more than 7 percent at one point, was down 2.5 percent at 17,185.64 in late afternoon trading. Tokyo’s Nikkei 225 index slid 2.2 percent to 11,489.30, a three-year low.
“It’s a complete collapse of confidence,” said Francis Lun (藺常念), general manager of Fulbright Securities Ltd (富昌證券) in Hong Kong. “The financial crisis in the US is hitting everyone; everyone is running for cover. If the largest insurance company can fail, than no one is safe.”
Russia’s main stock exchanges were mostly closed yesterday, a day after regulators suspended trading amid a plummet in share prices. The MICEX resumed limited trading; it wasn’t immediately clear when the RTS would reopen.
In other markets, Australia’s S&P/ASX200 index fell 2.4 percent, South Korea’s Kospi lost 2.3 percent, India’s Sensex lost around 4 percent and China’s Shanghai benchmark dropped 2.2 percent.
The losses tracked US markets, where the Dow Jones industrial average fell about 450 points on Wednesday, or 4.06 percent, to 10,609.66.
As equities markets staggered, investors fled to gold, seen as a safe haven in times of trouble. Gold for December delivery rose as much as US$90.40, or 11.6 percent, to US$870.90 an ounce in after-hours trading on the New York Mercantile Exchange after jumping US$70 to settle at US$850.50 in the regular session.
Oil rose above US$97 in Asian trade yesterday, extending its big gains overnight. The dollar was slightly higher at ¥105.13 and the euro rose to US$1.4328.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
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