asian optimism

Today stock markets in Shanghai, Taiwan, and Hong Kong have jumped to their highest levels since October. Reasons for the jump are said to be optimism over the recovery in China and–for Taiwan–the expectation that their markets will soon be open to Chinese investment.

My own casual observations might also fuel optimism on Chinese markets. I spent Saturday afternoon in a new shopping mall near our home in Suzhou. My daughter was there to experience the big indoor playground, but first we explored the mall, got a bite to eat, watched the crowds wander by. The crowds were big. The mall has only been open a few days, and there was a light rain outside, so maybe that explains the crowds, but I was surprised to see people shopping in what is supposed to be a big economic downturn.

But were people spending money? Hard to say. They were buying snacks and paying for the kids to get in the playground, but I don’t remember seeing many shopping bags around.

(Don’t forget to visit condron.us)

bernanke, banks, and housing

He may as well have been responding to my last post. Fed Chairmand Bernanke said yesterday that he does not expect nationalization of banks in the US. That spurred some optimism and demand for stocks, and the Dow Jones rose by 3% even though Bernanke also said the recession is likely to last at least another year.

Another report says that home prices in the US have taken another drop and consumer confidence is lower too. Bernanke was probably taking this into consideration when predicting the extended recession.

Question then–Which would have a more positive effect on the housing market? Banks being held privately? Or under government control?

Held privately, banks are less restricted but also have the option to hoard money. Held publicly, policy makers could push the banks to loan money, but the cost of banking would likely be higher.

Hmmmmmmm….

pessimism

World stockmarkets

• Dow Jones 17 Feb 09 21:04 7552.6 -297.81 ( -3.79% )
• Nasdaq 17 Feb 09 20:59 1472.7 -60.46 ( -3.94% )
• FTSE 100 17 Feb 09 16:35 4034.13 -100.62 ( -2.43% )
• DAX 17 Feb 09 16:35 4216.6 -150.04 ( -3.44% ) 
• CAC 40 17 Feb 09 16:35 2875.23 -86.99 ( -2.94% )
• Nikkei 18 Feb 09 04:44 7520.81 -124.7 ( -1.63% )

And this is coming out at the same time I see this headline–

Obama Signs Huge Stimulus Package

Investors must be especially pessimistic about the effectiveness of the  expensive bill just signed. And Alan Greenspan is reported to believe that the package needs to be bigger.