The head of the US Federal Reserve backed a stimulus plan for the flagging US economy, buoying stock markets despite gloomy unemployment figures and fears the rebound could be limited.
Asian markets tracked gains on Wall Street, where stocks soared after US Federal Reserve chief Ben Bernanke said US lawmakers should consider a second stimulus plan, warning the world’s largest economy risked a “protracted slowdown.”
His endorsement came after a forecast that the financial crisis could push worldwide unemployment to a record high and as new bank rescue efforts were unveiled in France and Sweden.
“With the economy likely to be weak for several quarters and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate,” he told the US House of Representatives budget committee.
Asked to say if the US economy was in recession, he replied only there was a “very serious slowdown in the economy, which has very serious consequences for the public.”
The fallout for workers was made clear in a report by the International Labor Organization, which warned that the number of unemployed worldwide would increase from 190 million last year to 210 million by late next year — a new record.
China’s weaker-than-expected economic growth figures released on Monday highlighted the extent to which the credit crunch has spread around the world.
But Australia’s central bank chief sounded a note of optimism, saying the danger of a “global catastrophe” stemming from the crisis that began last year with subprime US home loans had decreased thanks to government interventions.
“At moments like this, it is hazardous to make predictions,” Reserve Bank of Australia Governor Glenn Stevens told an audience in Sydney yesterday.
“However, the world is, it seems to me, getting on to a better path. As a result, the likelihood of a global catastrophe has in fact declined over the past couple of weeks,” he said.
Across Asia, stock markets were mainly up yesterday, with the Tokyo Stock Exchange’s benchmark Nikkei index up 3.34 percent at the close.
Sydney was up 3.9 percent, New Zealand shares rose 2.15 percent and Taipei was up 0.22 percent. Hong Kong shares were flat at midday, while Shanghai was up 0.42 percent. Seoul bucked the trend by finishing 0.95 percent lower.
The leading Wall Street index, the Dow Jones Industrial Average, soared 4.65 percent to 9,263.68 just after the closing bell Monday.
In Europe, the London FTSE 100 index of leading shares gained 5.41 percent on Monday, the CAC 40 in Paris jumped 3.56 percent, and the Frankfurt Dax added 1.12 percent.
The current financial crisis led to several spectacular bank failures and prompted governments around the world to put forward more than US$3 trillion to shore up banks, in addition to massive cash infusions into the banking system.
Sweden on Monday presented a plan worth more than US$206 billion to help its financial sector.
Pakistan, teetering on the edge of economic meltdown, was consulting with IMF representatives in Dubai.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
COORDINATION, ASSURANCE: Separately, representatives reintroduced a bill that asks the state department to review guidelines on how the US engages with Taiwan US senators on Tuesday introduced the Taiwan travel and tourism coordination act, which they said would bolster bilateral travel and cooperation. The bill, proposed by US senators Marsha Blackburn and Brian Schatz, seeks to establish “robust security screenings for those traveling to the US from Asia, open new markets for American industry, and strengthen the economic partnership between the US and Taiwan,” they said in a statement. “Travel and tourism play a crucial role in a nation’s economic security,” but Taiwan faces “pressure and coercion from the Chinese Communist Party [CCP]” in this sector, the statement said. As Taiwan is a “vital trading
RSS