Looks like a new global economical crisis is on the way. Paul Krugman writes on his NYT column:

“In September 1998, the collapse of Long Term Capital Management, a giant hedge fund, led to a meltdown in the financial markets similar, in some ways, to what’s happening now. During the crisis in ’98, I attended a closed-door briefing given by a senior Federal Reserve official, who laid out the grim state of the markets. “What can we do about it?” asked one participant. “Pray,” replied the Fed official.”

clipped from www.nytimes.com
SINGAPORE, Aug. 10 — Central banks around Asia joined efforts in the United States and Europe to stave off a credit crunch among banks today, as widening fears over losses in the U.S. housing loan market prompted investors to sell assets and commercial banks to reel in credit lines.
Market declines in Europe and New York Thursday sparked a similar rout today in Asia. Stocks in Japan, Hong Kong and Australia dropped by more than 2.5 percent, with South Korea’s benchmark dropping 4.27 percent. As investors sold off assets considered relatively risky, such as Philippine stocks, they bought those considered safer, such as Japanese government bonds. Asian currencies such as the Thai baht also retreated against the U.S. dollar and more liquid and stable currencies such as the Japanese yen.

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