U. S. Financial Market Lack of Regulation Poisons Foreign Markets

As this Washington Post story indicates (http://www.washingtonpost.com/wp-dyn/content/article/2008/01/22/AR2008012200518_pf.html), the mismanagement and failure to regulate the U. S. financial markets is now causing the export of financial malaise worldwide. Not only has the regime of the Chimperator financial fuc*** over the American public and economy, but he has also exported the mess overseas as well. His "anything goes" mindset which allowed his buddies to make huge profits is now reaping the whirlwind. He truly has to rate as the worst president in U. S. history on numerous fronts. Here are some highlights:

The Federal Reserve today slashed the short-term interest rate it controls by three-quarters of a percentage point, a surprise move meant to keep plummeting stock markets around the world from threatening the underpinnings of the international economy.

A day after stock markets in all major world economies plunged, the U.S. market followed, but suffered much less damage than markets in other large countries. After initially falling nearly 450 points this morning, the Dow Jones industrial average was down 157 points at 10:45 a.m., or about 1.3 percent. In comparison, over the course of yesterday and today, the Japanese stock market fell 9.3 percent. Analysts attributed the relatively minimal decline in the U.S. markets to the Fed's rate cut.

"There is a growing sense of panic among central bankers about the course of the economy and both the widening and deepening of the credit crisis," said David Shulman, senior economist with the UCLA Anderson Forecast. Speaking about 15 minutes after U.S. markets opened, he said: "If the Fed hadn't acted, it would be a lot uglier. But the day is still very young and we're going to have quite a bit of volatility."

Today's declines in Asia were even more severe than those yesterday, and several markets hit multiyear lows. Indian shares plunged so quickly -- nearly 11 percent -- that its stock markets halted trading soon after opening. In South Korea, volatile futures prices prompted the main Kospi market to briefly suspend program selling orders at midday. The Australian market suffered its worst one-day fall ever, while Japan's Nikkei fell 5.65 percent to its lowest point since 2005. It is down nearly 18 percent this year. In Hong Kong, the Hang Seng index was down 8.65 percent today, after dropping 5.49 percent yesterday. It's off 19 percent this year and is 30 percent lower than a peak in late October.

The markets fell as fears spread that massive losses on loans made to U.S. home buyers would cascade through the world financial system. Some of the firms that play important, but usually invisible, roles in the global financial architecture are turning out to be exposed to the downturn in the housing market in such a way that their ability to function is threatened. The companies that insure bond investors against defaults are having to make massive payouts. One, ACA Financial, owes $60 billion that it cannot afford to pay and has been taken over by the Maryland insurance regulator. Its credit rating has been lowered.