Businessweek reports:
The unpleasantness started overnight in Shanghai, where the benchmark index tumbled 8.8% Tuesday amid worries about possible government action to cool the market. The benchmark closed at a record high a day earlier. According to a Bloomberg report, the State Council, China's highest ruling body, has approved a special task force to clamp down on illegal share offerings and other banned activities in the market.
Regulators clearly responded to the frothy gains in Chinese exchanges. Beijing must pay attention to "bubbles" in its stock market before they get out of hand, Cheng Siwei, vice chairman of the Nation's People Congress, wrote in a commentary published in the Chinese-language Financial News.
The market's worries were't limited to China. "The perfect storm of geopolitical stress via Iran, Chinese asset reversal, and lingering concerns about the subprime mortgage market" raise concerns about a global growth downturn, according to Action Economics.
To read more:
International Institute of Management (IIM) released a new report warning about the U.S. economic risks. The report:
1. Uncovers the forces behind Feb 27th stock market meltdown and the Chinese reaction to the outlook of U.S. Economy.
2. Forecasts the future behavior of U.S. and global markets.
Med Yones, the author of the white paper, warns against costly policy mistakes and provides a detailed analysis of the economic, social and geopolitical risks facing the United States
The complete text of the report is available at:
http://www.iim-edu.org/u.s.economyrisks/
Posted by: thinktank | March 01, 2007 at 02:10 PM