Japan banks, US carmakers seek funds

Font Size

Print

Feedback

Email

Discuss

Related Articles

Asian giants wary of Fed’s low rate policyForeign banks pip PSBs in assets growthSwiss banks flay data on black moneyBlame game begins on Swiss banks

London, Nov 19: financial meltdown which prompted the failure of three top banks. Central banks have also weighed in with a slew of rate cuts. The Federal Reserve is widely expected to cut rates to 0.5 % in December, what would be the lowest level since the 1950s, as it attempts to revive the U.S. economy.

After the Bank of England minutes, analysts forecast more big reductions to come in the UK too.

“Monetary policy boring? Clearly not any more,” said Marc Ostwald, bond analyst at Monument Securities in London.

“The fact that they considered 200 basis points at this month's meeting will surely trigger a shift in market expectations for December to a 100 basis points cut.”

British Land, the UK's second-largest real estate firm, said its property portfolio had plummeted by 10.8 % in value in its first half.

Marks & Spencer and Debenhams, two of Britain's biggest retailers, will this week hold pre-Christmas sales to stimulate trade after a tough October.

Stocks slid as a plea from US automakers for a bailout met political opposition and prospects of a deep global recession continued to rattle investors -- Japan's Nikkei slipped 0.7 % and European shares fell 1.2 %.

“There's a lot of worry about the possible bailout of the Big Three carmakers in the US, since it doesn't seem to be coming together well at all,” said Katsuhiko Kodama, a senior strategist at Toyo Securities.

The “Big Three” warned the US Senate Banking Committee on Tuesday of dire consequences if no help was forthcoming.

“This is about much more than just Detroit. It's about saving the US economy from a catastrophic collapse,” General Motors Corp CEO Rick Wagoner said in written testimony.

Senate Democrats have proposed offering $25 billion in loans to an industry devastated by a collapse in consumer spending triggered by the US housing crash and now rising unemployment.

Auto makers in Europe and Japan are also under pressure.

The EU is studying support for its carmakers and signaled support for a German offer to help the Opel unit of GM. But others said there could be no special treatment.

Toyota said it would stop production at US and Canadian factories for two extra days next month and Nissan warned of more tough times ahead.

“We have to recognize 2009 will be one of the most challenging years for our industry and the whole economy in the last 50 years,” CEO Carlos Ghosn told the Wall Street Journal.