Japan Nikkei & Australia ASX Plunge Biggest In History
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Australian Stocks Worst Week Since 1987 Crash
In the land down under, Australian Stocks Plunge, Set for Worst Week Since 1987 Crash.
Australian stocks plunged, set for their worst week since the 1987 stock market crash, as a credit freeze deepened, worsening the outlook for the global economy.Australian Dollar Collapses
Australia's S&P/ASX 200 Index slumped 226.30 points, or 5.2 percent, to 4,094.60 at 10:15 a.m., set for a 13 percent decline this week, the biggest rout in the index's history dating back to 1992. The All Ordinaries Index, which dates to 1979, is headed for its biggest weekly drop since the October 1987 market crash.
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In less than a year the Australian dollar has given back all of its gains since 2003. So much for the idea that commodity exports would keep the Australian dollar strong forever.
Japan Nikkei has biggest weekly decline in 50-year history
Bloomberg is reporting Japanese Stocks Tumble in Biggest Weekly Drop.
Japan stocks plunged, capping the Nikkei 225 Average's biggest weekly decline in its more than 50-year history, as the deepening credit crisis stoked concern that company failures will increase.Bitter Chalice
The tumble triggered a suspension in futures trading.
"It's certainly capitulation and panic mode," said John Vail, who helps oversee about $106 billion as head of global strategy at Nikko Asset Management Co. "It's dark in the U.S. much like it was dark in Japan in the late 90s. The U.S. is having a taste of that bitter chalice."
It is far too early to be claiming capitulation. That may come tomorrow (unlikely) or 3,000 points from now. However, "bitter chalice" certainly rings true. For years the US lorded over Japan about unwillingness to write down debts. Now, the US is in the same boat, unwilling to let banks go under, suspending mark to market rules, and taking amazing actions to prop up the banking system.
Nikkei Monthly
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The Nikkei sliced through two levels of strong support like a knife through butter. Last year I was quite certain that Japan would not visit the 2003 low again. It still might not. However, I am no longer so sure about it.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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