On hearing that Rick Wagoner is outta here, Asia-Pacific shares nosedived on Monday, which wiped out most of the gains they had made last week. It’s not that anyone is missing Red Ink Rick. Traders at the Asian exchanges see the departure as a sign that “the US government might allow one of the world’s biggest car makers, General Motors, to go bust,” writes the Financial Times [sub].
As Wagoner’s defenestration hit the wires, the Nikkei in Japan dropped 4.5 percent to record its worst day for two and a half months. Hong Kong’s Hang Seng lost 4.7 percent—its biggest fall in three weeks. Taiwan shares were down 3.4 percent and in South Korea the market dropped 3.2 percent.
A person close to General Motors told the Financial Times said that the resignation of Rick Wagoner at the weekend made it likely the company would file for bankruptcy protection sometime in the next few weeks.
Wow…. I wonder what the Dow is doing to do today. I say back to the high 6000’s by noon!
I’m no economist, but I’m tempted to suggest that losses of less than 5% hardly constitutes a “crash.” It’s certainly a significant loss, but we’ve seen quite a few far more severe market hits worldwide in the last year or so, & to call this a crash seems to be a bit of hyperventilation and spin.
Oh please, there’s about as much chance that was related to Wagoner’s ouster as there was that it was related to MSU reaching the Final Four.
It fell because its a bear market. Until there’s actual evidence of an economic recovery major investors are just going to fade rallies.
Traders at the Asian exchanges see the departure as a sign that “the US government might allow one of the world’s biggest car makers, General Motors, to go bust,” writes the Financial Times
Maybe the drop is due to the fact that the U.S. government has control of GM.
Maybe the drop is due to the fact that the U.S. government has control of GM.
Come back and say that when they’ve insisted upon GM producing cars people will actually buy, or have installed a directorship that isn’t utterly spineless.
A single percentage point decline is hardly a “crash”, and it proves absolutely nothing about the effect of GM on the world’s businesses as a whole.
If we must attach meaning to every random zig and zag in the stock market, last night’s volatility was merely a corrective response to the rally of the past few days, which is a corrective response to the decline of the past two years, which is a corrective response to the rally of the past two hundred years.
TTAC should leave this kind of reporting to CNBC and other financial pornographers.
A single percentage point decline is hardly a “crash”, and it proves absolutely nothing about the effect of GM on the world’s businesses as a whole.
The Nikkei fell 4.5% yesterday, not 1%. It was generally a down day, but the losses really accelerated once the announcement was made. The linkage to the GM news is clear here, although a correction from the earlier rally is likely to be an additional factor.
It fell because its a bear market.
For one, the bear market characterization has become debatable.
For another, markets respond strongly to news. Chapter 11 is not good for stock values, so speculation that GM could file bankruptcy is naturally going to cause this response. Investors don’t like it so much when the value of one of their holdings goes to zero.
SINGAPORE (Dow Jones)–Asian markets tumbled Monday as risk-averse investors dumped equities on reports the Obama administration has forced the departure of General Motors Corp.’s chief executive and suggested a “quick and surgical” bankruptcy for struggling U.S. car makers.
“the US government might allow one of the world’s biggest car makers, General Motors, to go bust”
That should read, “the US government might publicly admit that one of the world’s biggest car makers, General Motors, has gone broke.”
Yah, I agree with don1967, what we really need is a triple-digit percentage decline, then we can call it a crash.
/sarcasm