European stocks fell for a third week as record short-term borrowing costs and shrinking orders to US factories deepened concern that a seizure in credit markets is pushing the global economy closer to a recession.
Bayerische Motoren Werke AG (BMW) slid 8.3 percent and Renault SA fell 14 percent as the carmakers forecast a prolonged sales slump and reports on factory orders and US manufacturing trailed estimates. BHP Billiton Ltd lost 13 percent after the Reuters/Jefferies CRB Index of raw materials posted the steepest drop since at least 1956. The rate banks charge each other for three-month loans surged after five of the region’s lenders including Dexia SA were forced into government-backed bailouts.
“The credit markets are basically shot,” Marino Valensise, who helps oversee about US$44.6 billion as chief investment officer at Baring Asset Management Ltd in London, said in an interview on Bloomberg Television.
Banks “are retaining cash and not lending. This is very dangerous for the corporate world,” Valensise said.
Europe’s Dow Jones STOXX 600 Index dropped 1.7 percent this week to 261.43, bringing its three-week tumble to 6.8 percent. It closed at the lowest since January 2005 on Monday, then recouped some of losses as banks rallied on speculation US lawmakers will pass a US$700 billion financial-market rescue package. US President George W. Bush signed the package on Friday after it was passed by Congress.
Allied Irish Banks PLC and Bank of Ireland PLC jumped more than 18 percent after the Irish parliament approved a 400 billion euro (US$550 billion) plan to protect the deposits and borrowings of six local banks.
The STOXX 600 has tumbled 28 percent this year, leaving the pan-European equity benchmark valued at 11 times its companies’ reported earnings, near the lowest since 2002.
National benchmark indexes retreated in 15 of the 18 western European markets this week. France’s CAC 40 lost 2 percent. The UK’s FTSE 100 dropped 2.1 percent, while Germany’s DAX retreated 4.4 percent.
The pound dropped the most versus the dollar since 1992 this week after speculation increased that the Bank of England will cut interest rates and the government seized Bradford & Bingley PLC, the UK’s biggest lender to landlords.
Auto markets won’t recover until at least the middle of next year, BMW chief executive officer Norbert Reithofer said on Oct. 2 at the Paris Motor Show. The world’s largest luxury-car maker may deepen production cuts if people continue to delay purchases.
Renault boss Carlos Ghosn predicted the slowdown may last two years.
Orders to US factories decreased by 4 percent, more than forecast and following a revised 0.7 percent increase in July that was smaller than previously estimated. The Institute of Supply Management’s factory index declined to 43.5, the lowest level since October 2001. A reading of 50 is the dividing line between expansion and contraction.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique