Asia Joins the Panic! Japan’s 1987 Déjà vu; Indonesia Suspends Trading

This is fear written all over.

One, in the US the Fear Index hit record highs and is superbly on the extremes.

Two global markets are in a meltdown mode.

And Asia hasn’t been spared…

Japan's 1987 experience relived...

New York Times ``Japanese stocks suffered their biggest one-day fall in more than 20 years on Wednesday, plummeting more than 9 percent, as fears of the financial crisis and global recession shook markets throughout the Asia-Pacific region and prompted a trading halt in Indonesia.

``The Nikkei 225 index dropped 9.4 percent to 9,302.32, bringing losses for the past five days to nearly 19 percent. It was the largest percentage point drop since October 1987.

Hong Kong shares the same plight…

Worst is in our neighboring Indonesia whose benchmark fell by 10.4%…Where trading has been suspended.

From Bloomberg ``Indonesia's stock exchange halted share-market trading for the first time in eight years after a 10 percent plunge in the benchmark index.

``Trading will remain suspended until further notice, the exchange said in an e-mailed statement. Trading was last halted in September 2000 when a car bomb damaged the exchange building and killed 15 people. Exchange President Erry Firmansyah couldn't be immediately reached on his mobile phone to comment.”

This from International Herald Tribune…``The decline was driven by huge losses in commodities stocks. The index has fallen more than 20 percent in three days, and is off 47 percent since the start of the year.”

The Phisix wasn’t spared to and commiserated with its neighbors. It closed 4.8% lower.

What do all of these exhibit?

The success expectations from concerted government rescue efforts have been now visibly corroding.

Markets are getting to accept the fact that painful adjustments have to be made. Though, probably we can expect more actions from government probably-an emergency RATE CUT by the US Fed as next.

But any bounce can be construed as a “relief rally” from severely oversold conditions.

Of course markets can always overshoot. When the smug from the disaster area clears, markets will likely be more discernful.