The head of the US Federal Reserve backed a stimulus plan for the flagging US economy, buoying stock markets despite gloomy unemployment figures and fears the rebound could be limited.
Asian markets tracked gains on Wall Street, where stocks soared after US Federal Reserve chief Ben Bernanke said US lawmakers should consider a second stimulus plan, warning the world’s largest economy risked a “protracted slowdown.”
His endorsement came after a forecast that the financial crisis could push worldwide unemployment to a record high and as new bank rescue efforts were unveiled in France and Sweden.
“With the economy likely to be weak for several quarters and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate,” he told the US House of Representatives budget committee.
Asked to say if the US economy was in recession, he replied only there was a “very serious slowdown in the economy, which has very serious consequences for the public.”
The fallout for workers was made clear in a report by the International Labor Organization, which warned that the number of unemployed worldwide would increase from 190 million last year to 210 million by late next year — a new record.
China’s weaker-than-expected economic growth figures released on Monday highlighted the extent to which the credit crunch has spread around the world.
But Australia’s central bank chief sounded a note of optimism, saying the danger of a “global catastrophe” stemming from the crisis that began last year with subprime US home loans had decreased thanks to government interventions.
“At moments like this, it is hazardous to make predictions,” Reserve Bank of Australia Governor Glenn Stevens told an audience in Sydney yesterday.
“However, the world is, it seems to me, getting on to a better path. As a result, the likelihood of a global catastrophe has in fact declined over the past couple of weeks,” he said.
Across Asia, stock markets were mainly up yesterday, with the Tokyo Stock Exchange’s benchmark Nikkei index up 3.34 percent at the close.
Sydney was up 3.9 percent, New Zealand shares rose 2.15 percent and Taipei was up 0.22 percent. Hong Kong shares were flat at midday, while Shanghai was up 0.42 percent. Seoul bucked the trend by finishing 0.95 percent lower.
The leading Wall Street index, the Dow Jones Industrial Average, soared 4.65 percent to 9,263.68 just after the closing bell Monday.
In Europe, the London FTSE 100 index of leading shares gained 5.41 percent on Monday, the CAC 40 in Paris jumped 3.56 percent, and the Frankfurt Dax added 1.12 percent.
The current financial crisis led to several spectacular bank failures and prompted governments around the world to put forward more than US$3 trillion to shore up banks, in addition to massive cash infusions into the banking system.
Sweden on Monday presented a plan worth more than US$206 billion to help its financial sector.
Pakistan, teetering on the edge of economic meltdown, was consulting with IMF representatives in Dubai.
A Chinese aircraft carrier group entered Japan’s economic waters over the weekend, before exiting to conduct drills involving fighter jets, the Japanese Ministry of Defense said yesterday. The Liaoning aircraft carrier, two missile destroyers and one fast combat supply ship sailed about 300km southwest of Japan’s easternmost island of Minamitori on Saturday, a ministry statement said. It was the first time a Chinese aircraft carrier had entered that part of Japan’s exclusive economic zone (EEZ), a ministry spokesman said. “We think the Chinese military is trying to improve its operational capability and ability to conduct operations in distant areas,” the spokesman said. China’s growing
Nine retired generals from Taiwan, Japan and the US have been invited to participate in a tabletop exercise hosted by the Taipei School of Economics and Political Science Foundation tomorrow and Wednesday that simulates a potential Chinese invasion of Taiwan in 2030, the foundation said yesterday. The five retired Taiwanese generals would include retired admiral Lee Hsi-min (李喜明), joined by retired US Navy admiral Michael Mullen and former chief of staff of the Japan Self-Defense Forces general Shigeru Iwasaki, it said. The simulation aims to offer strategic insights into regional security and peace in the Taiwan Strait, it added. Foundation chair Huang Huang-hsiung
PUBLIC WARNING: The two students had been tricked into going to Hong Kong for a ‘high-paying’ job, which sent them to a scam center in Cambodia Police warned the public not to trust job advertisements touting high pay abroad following the return of two college students over the weekend who had been trafficked and forced to work at a cyberscam center in Cambodia. The two victims, surnamed Lee (李), 18, and Lin (林), 19, were interviewed by police after landing in Taiwan on Saturday. Taichung’s Chingshui Police Precinct said in a statement yesterday that the two students are good friends, and Lin had suspended her studies after seeing the ad promising good pay to work in Hong Kong. Lee’s grandfather on Thursday reported to police that Lee had sent
BUILDUP: US General Dan Caine said Chinese military maneuvers are not routine exercises, but instead are ‘rehearsals for a forced unification’ with Taiwan China poses an increasingly aggressive threat to the US and deterring Beijing is the Pentagon’s top regional priority amid its rapid military buildup and invasion drills near Taiwan, US Secretary of Defense Pete Hegseth said on Tuesday. “Our pacing threat is communist China,” Hegseth told the US House of Representatives Appropriations Subcommittee on Defense during an oversight hearing with US General Dan Caine, chairman of the Joint Chiefs of Staff. “Beijing is preparing for war in the Indo-Pacific as part of its broader strategy to dominate that region and then the world,” Hegseth said, adding that if it succeeds, it could derail
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