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.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft