Dan Milmo in New York and Mark Tran
guardian.co.uk, Monday November 24 2008 13.20 GMT
Shares around the world rebounded strongly today as traders took heart from the US government's multibillion dollar rescue of Citigroup, the tottering US banking behemoth.
The move gave a big boost to confidence, sending shares sharply higher throughout Europe. The Dow Jones Industrial Average was also expected to move ahead strongly when trading begins later today. Citigroup shares surged more than 30% in pre-market trading, to $5.07.
By 1pm, the FTSE 100 index, which suffered its third worst week ever last week, was trading 176 points higher, a jump of almost 5%.
In an effort to shore up confidence in America's crumbling financial system, the US government has taken a $20bn (£13.4bn) stake in the bank. Its shares surged more than 30% in pre-market trading on Wall Street this afternoon.
The US treasury secretary, Henry Paulson, and the Federal Reserve chairman, Ben Bernanke, worked with officials throughout the weekend on the lifeline for the institution whose collapse would have wreaked havoc on the US economy.
The New York Federal Reserve board president, Timothy Geithner, who is expected to be nominated later today to succeed Paulson as treasury secretary, also was closely involved.
"With these transactions, the US government is taking the actions necessary to strengthen the financial system and protect US taxpayers and the US economy," the authorities said in a statement issued late last night. "We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks."
The $20bn cash injection by the treasury will come from the $700bn US financial bail-out package. The move follows an earlier $25bn infusion in Citigroup for which the government received an ownership stake.
As part of the plan, the treasury and the Federal Deposit Insurance Corporation will guarantee against the "possibility of unusually large losses" on up to $306bn of risky loans and securities backed by commercial and residential mortgages.
Under the loss-sharing arrangement, Citigroup will assume the first $29bn in losses on the risky pool of assets. Beyond that amount, the government would absorb 90% of the remaining losses, with Citigroup absorbing 10%.
The agreement places restrictions on executive compensation, including bonuses, and calls on Citigroup to take steps to help distressed homeowners.
The move is the latest in a string of high-profile government bail-outs. The Fed provided financial backing to JPMorgan Chase's buyout of ailing Bear Stearns in March. Six months later, the government was forced to take over mortgage giants Fannie Mae and Freddie Mac and throw a financial lifeline to the insurance giant American International Group.
Citigroup yesterday ran full-page newspaper adverts in the US to reassure investors and creditors it could survive the latest bout of turmoil in the markets. A slump in Citigroup stock last week saw its shares lose 60% of their value.
Once the world's largest bank, Citigroup's asset base of $2tn is much larger than Lehman Brothers, whose bankruptcy in September led to a deepening of the credit crisis that was threatening to engulf Citigroup.
Citigroup is adamant that the price slump, which has pushed its stock to the lowest point since 1992, is a product of mistaken fears for the strength of its balance sheet. In its adverts, it said financial markets had been tested in "unprecedented ways" this year, but its diversified business model – which ranges from credit cards to transaction services and investment banking – would steer it through the uncertainty. It ended with a clarion call and an unintentional allusion to the exhaustive talks this weekend at Citigroup's Manhattan headquarters: "That's why now, more than ever, you can feel confident that Citi never sleeps."
Mike Mayo, an analyst at Deutsche Bank, believes reserves of $25bn and other resources should cover estimated losses of $50bn on bad loans.
Richard Bove, at Ladenburg Thalmann & Co, said it would take a repeat of the Great Depression to threaten Citigroup's survival.
However, concerns over the US economy are focusing on Citigroup. Sean Egan, at Egan-Jones Ratings, has argued that the bank might need a further $50bn. The fear is that Citigroup will be exposed to more losses if US growth deteriorates severely. Last month, the bank obtained $25bn from the treasury's troubled asset relief programme.
Vikram Pandit, Citigroup's embattled chief executive, has ruled out a break-up, dismissing reports it might sell Smith Barney, its wealth management arm. But it is understood executives have not ruled out a break-up. Market professionals said Citigroup's stock would be hammered again this morning if a deal was not struck with the US government. Joe Saluzzi at Themis Trading said it needed to announce a break-up, management change or restructuring by today. "That would probably continue a rally on Monday morning," he said.
http://www.guardian.co.uk/business/2008/nov/24/citigroup-bailout-banking-sector
Monday, November 24, 2008
Saturday, November 22, 2008
At summit, Bush touts free-trade record
LIMA, Peru (CNN) -- President Bush, in what could be his final overseas trip as president, called on international leaders Saturday to continue his administration's push for free trade despite the global financial crisis.
"One of the enduring lessons of the Great Depression is that global protectionism is a path to global economic ruin," Bush told the annual meeting of the 21-nation Asia-Pacific Economic Cooperation forum in the capital, Lima.
"I recognize I'm leaving office in two months," Bush said as he discussed the Doha trade talks, which were launched in 2001 to help liberalize international trade policies, "but nevertheless, this administration will push hard ... so that Doha can be completed and so we can send a message: We refuse to accept protectionism in the 21st century."
Touting his record on free trade, Bush said, "expanding trade and investment has been one of the highest priorities of my administration.
"When I took office, America had free trade agreements in force with only three nations. Today, we have agreements in force with 14."
Bush said that during his administration, "America's trade with the world has grown from $2.5 [trillion] to $4 trillion, an increase of 60 percent."
Among APEC member nations, he cited Chile and Peru as more than doubling their trade with the United States during his time in office, and trade with China more than tripling.
"Overall, America's trade with APEC nations now accounts for nearly two-thirds of our trade in the world," Bush said.
Bush chided the U.S. Congress, saying it was "extremely disappointing" that lawmakers adjourned without passing new trade agreements between the United States and Colombia, Panama and South Korea.
"I urge all those who support free trade to continue to press the case for the Congress to pass free-trade agreements with Colombia and Panama and South Korea," he said, drawing applause from his audience.
Referring to the global financial crisis, Bush said, "recovering from the financial crisis is going to take time. But we'll recover and, in so doing, begin a new era of prosperity. The nations of APEC have faced tests before. We have risen to meet them together, and we will do so again."
After his speech, Bush met briefly with Russian President Dmitry Medvedev. Russia is a member of APEC. "This will be my last meeting as the sitting president with the leader of Russia," Bush said after the two leaders shook hands.
"We've had our agreements; we've had our disagreements. I've tried to work hard to make it a cordial relationship, though, so that when we need to work together, we can, and when we disagree, we're able to do so in a way that is respectful to our two nations," Bush said.
Medvedev, speaking through an interpreter, responded by saying, "In general, though we do have points of agreement and those points of real differences ... we are prepared for the continuous work, and I view that, in general, our work was successful."
Bush's attendance at the APEC meeting marked his eighth year of meeting with and speaking to economic leaders from a diverse group of countries ranging from Thailand to Mexico, Chile to China.
Bush came to the APEC meeting seeking to build on the results of a historic two-day meeting in Washington this month attended by presidents and prime ministers from 20 countries. At that meeting, world leaders unveiled a set of sweeping plans aimed at tackling the ever-expanding economic crisis, which has roiled financial markets worldwide.
The final 3,600-word announcement from that Group of 20 meeting in Washington endorsed several stimulative measures, including interest rate cuts by central banks around the globe or potential economic stimulus packages.
Leaders who met in Washington also agreed not to raise new trade barriers over the next 12 months and vowed to reach a resolution on the Doha trade talks.
Bush gave the APEC leaders a briefing on the Washington meeting, according to Dan Price, assistant to the president for international economic affairs, and the leaders discussed the issues of the global economic crisis, the Doha trade talks and food aid.
On food issues, Bush noted that the United States has budgeted $5.5 billion in food aid for this year and next, Price said.Price said that all of the other APEC leaders endorsed the measures discussed by the Group of 20 meeting in Washington.
Find this article at:
http://edition.cnn.com/2008/POLITICS/11/22/bush.apec.summit/?iref=mpstoryview
"One of the enduring lessons of the Great Depression is that global protectionism is a path to global economic ruin," Bush told the annual meeting of the 21-nation Asia-Pacific Economic Cooperation forum in the capital, Lima.
"I recognize I'm leaving office in two months," Bush said as he discussed the Doha trade talks, which were launched in 2001 to help liberalize international trade policies, "but nevertheless, this administration will push hard ... so that Doha can be completed and so we can send a message: We refuse to accept protectionism in the 21st century."
Touting his record on free trade, Bush said, "expanding trade and investment has been one of the highest priorities of my administration.
"When I took office, America had free trade agreements in force with only three nations. Today, we have agreements in force with 14."
Bush said that during his administration, "America's trade with the world has grown from $2.5 [trillion] to $4 trillion, an increase of 60 percent."
Among APEC member nations, he cited Chile and Peru as more than doubling their trade with the United States during his time in office, and trade with China more than tripling.
"Overall, America's trade with APEC nations now accounts for nearly two-thirds of our trade in the world," Bush said.
Bush chided the U.S. Congress, saying it was "extremely disappointing" that lawmakers adjourned without passing new trade agreements between the United States and Colombia, Panama and South Korea.
"I urge all those who support free trade to continue to press the case for the Congress to pass free-trade agreements with Colombia and Panama and South Korea," he said, drawing applause from his audience.
Referring to the global financial crisis, Bush said, "recovering from the financial crisis is going to take time. But we'll recover and, in so doing, begin a new era of prosperity. The nations of APEC have faced tests before. We have risen to meet them together, and we will do so again."
After his speech, Bush met briefly with Russian President Dmitry Medvedev. Russia is a member of APEC. "This will be my last meeting as the sitting president with the leader of Russia," Bush said after the two leaders shook hands.
"We've had our agreements; we've had our disagreements. I've tried to work hard to make it a cordial relationship, though, so that when we need to work together, we can, and when we disagree, we're able to do so in a way that is respectful to our two nations," Bush said.
Medvedev, speaking through an interpreter, responded by saying, "In general, though we do have points of agreement and those points of real differences ... we are prepared for the continuous work, and I view that, in general, our work was successful."
Bush's attendance at the APEC meeting marked his eighth year of meeting with and speaking to economic leaders from a diverse group of countries ranging from Thailand to Mexico, Chile to China.
Bush came to the APEC meeting seeking to build on the results of a historic two-day meeting in Washington this month attended by presidents and prime ministers from 20 countries. At that meeting, world leaders unveiled a set of sweeping plans aimed at tackling the ever-expanding economic crisis, which has roiled financial markets worldwide.
The final 3,600-word announcement from that Group of 20 meeting in Washington endorsed several stimulative measures, including interest rate cuts by central banks around the globe or potential economic stimulus packages.
Leaders who met in Washington also agreed not to raise new trade barriers over the next 12 months and vowed to reach a resolution on the Doha trade talks.
Bush gave the APEC leaders a briefing on the Washington meeting, according to Dan Price, assistant to the president for international economic affairs, and the leaders discussed the issues of the global economic crisis, the Doha trade talks and food aid.
On food issues, Bush noted that the United States has budgeted $5.5 billion in food aid for this year and next, Price said.Price said that all of the other APEC leaders endorsed the measures discussed by the Group of 20 meeting in Washington.
Find this article at:
http://edition.cnn.com/2008/POLITICS/11/22/bush.apec.summit/?iref=mpstoryview
Goodbye G7, hello G20
Nov 20th 2008 | WASHINGTON, DC
From The Economist print edition
A bit of good news after a big summit
JUDGED by the hubristic promises that preceded it, the G20 meeting was bound to disappoint. The leaders of the world’s 20 biggest rich and emerging economies, gathered in Washington, DC, on November 15th, did not remake global finance—as some of them had set out to do. Nor, as others had hoped, did they come up with a co-ordinated fiscal boost to counter the deepening global downturn (though they talked of using fiscal measures “to rapid effect”).
And within days even some of their promises looked thin. The five-page communiqué included a solemn pledge that G20 countries would “refrain from raising new barriers” to trade and investment over the next twelve months. Two days later Russia’s government said it would raise tariffs on imported cars. On November 18th India slapped a 5% duty on a number of iron and steel products.
So was it all a waste of time? There are some reasons to think not. For one, this was the first time the leaders of this group of rich and emerging economies—which between them represent almost 90% of global GDP—had gathered for an economic summit. They have already scheduled a follow-up session before April 30th, and the old, rich-only G7 looks increasingly anachronistic.
Fortunately, the G20’s attitude to global finance seems realistic. The communiqué was not a grand manifesto but a pragmatic acknowledgment of the tension between a globalising capital market and national regulation. From the creation of colleges of financial supervisors to oversee the biggest cross-border financial institutions to the development of a single global accounting standard, the G20 leaders set out incremental reforms to the rules of global finance.
They also made clear that the governance of global financial institutions must change. The membership of the Financial Stability Forum, a group of regulators and central bankers charged with the technicalities of financial supervision, is to be broadened. The IMF and World Bank are to be “comprehensively” reformed. It is easy to be cynical. Talk about reforming power within the IMF has gone on for years. But with emerging economies now firmly at the top table of international finance, such an overhaul has become much more likely. Not a new Bretton Woods—but a decisive shift in the old order.
http://www.economist.com/finance/PrinterFriendly.cfm?story_id=12652239
From The Economist print edition
A bit of good news after a big summit
JUDGED by the hubristic promises that preceded it, the G20 meeting was bound to disappoint. The leaders of the world’s 20 biggest rich and emerging economies, gathered in Washington, DC, on November 15th, did not remake global finance—as some of them had set out to do. Nor, as others had hoped, did they come up with a co-ordinated fiscal boost to counter the deepening global downturn (though they talked of using fiscal measures “to rapid effect”).
And within days even some of their promises looked thin. The five-page communiqué included a solemn pledge that G20 countries would “refrain from raising new barriers” to trade and investment over the next twelve months. Two days later Russia’s government said it would raise tariffs on imported cars. On November 18th India slapped a 5% duty on a number of iron and steel products.
So was it all a waste of time? There are some reasons to think not. For one, this was the first time the leaders of this group of rich and emerging economies—which between them represent almost 90% of global GDP—had gathered for an economic summit. They have already scheduled a follow-up session before April 30th, and the old, rich-only G7 looks increasingly anachronistic.
Fortunately, the G20’s attitude to global finance seems realistic. The communiqué was not a grand manifesto but a pragmatic acknowledgment of the tension between a globalising capital market and national regulation. From the creation of colleges of financial supervisors to oversee the biggest cross-border financial institutions to the development of a single global accounting standard, the G20 leaders set out incremental reforms to the rules of global finance.
They also made clear that the governance of global financial institutions must change. The membership of the Financial Stability Forum, a group of regulators and central bankers charged with the technicalities of financial supervision, is to be broadened. The IMF and World Bank are to be “comprehensively” reformed. It is easy to be cynical. Talk about reforming power within the IMF has gone on for years. But with emerging economies now firmly at the top table of international finance, such an overhaul has become much more likely. Not a new Bretton Woods—but a decisive shift in the old order.
http://www.economist.com/finance/PrinterFriendly.cfm?story_id=12652239
G-20 meet underscores gravity of economic crisis
Friday, 11.21.2008, 07:04am (GMT-7)
India Post News Service
WASHINGTON DC: In what appears to have been the biggest and first of its kind global public relations exercise, heads of state of the Group of Twenty met over the weekend in Washington DC at the invitation of President George W Bush to assure economies across the globe that the world is not coming to an end. The overwhelming presence of the international media covering the G20 Summit on Financial Markets and the World Economy held at the National Museum Building in Washington DC, Nov 14-15, underscored the extent and gravity of the economic crisis even as the gathered leaders sought to assure the world of their keenness to find solutions. The G20 countries plus the European Union, together account for almost 90 percent of global GDP.
Little wonder then that the US capital was besieged by the world media as Presidents, Prime Ministers and finance ministers of these nations converged amid serious challenges to the world economy and financial markets, in a cooperative bid to restore global growth and reform world financial systems. With just six weeks of his presidency left, President Bush played the perfect host, facilitating a platform for the gathered leaders rather than taking the lead on the stage. Significantly, the Summit ended with the leaders signing on a declaration, committing to an Open Global Economy, "rejecting protectionism and not turning inward in times of financial uncertainty." And in this regard, the Group of 20 declared that for the next 12 months, they would refrain from imposing any new trade or investment barriers, imposing new export restrictions, and strive to reach an agreement this year on modalities that lead to an ambitious outcome to the Doha Round of World Trade Organization negotiations.
The G20 countries committed to put an initial list of specific measures in an Action Plan that is to be completed by March 31, 2009. Identifying the root causes of the current crisis, the declaration put the responsibility of the crisis squarely on the shoulders of the advanced countries, without necessarily putting the entire blame on the United States, which got away for being the host country - one that is in the process of transitioning to a new administration. The Action Plan is one of the five key objectives achieved by the Summit where the leaders reached a common understanding of the root causes of the global crisis; reviewed actions countries have taken and will take to address the immediate crisis and strengthen growth; agreed on common principles for reforming the financial markets; and asked finance ministers to develop further specific recommendations that will be reviewed by leaders at a subsequent summit; and reaffirmed their commitment to free market principles.
This Summit is the first of a series of meetings to discuss efforts to deal with the present crisis, as well as to address longer-term financial and economic challenges. In terms of participation at this meeting, some had initially proposed that this summit be held among a relatively small group of countries, but President Bush apparently felt it was very important to have a broader mix of countries, both developed and developing, to participate in this discussion. Although the new world order appropriately required the expansion of the members countries, it is not clear if it augurs the end of the G7, the G8, the G8 plus 5 or any other similar grouping.
In addition to the leaders of these countries, the Summit was attended by heads of the World Bank and the International Monetary Fund, as well as the UN Secretary General and the Chairman of the Financial Stability Forum. Root Causes Failure to exercise proper due diligence and seeking of higher yields without adequate appreciation of the risks involved have been found to be the root causes of the current crisis. "Policy makers, regulators and supervisors in some advanced countries did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovations, or take into account the systemic ramifications of domestic regulatory actions," the declaration underscored as a root cause of the current crisis.
The major underlying factors to the current situation were, among others inconsistent and insufficiently coordinated macroeconomic policies, inadequate structural reforms, which led to unsustainable global macroeconomic outcomes, the declaration said. These developments, together, contributed to excesses and ultimately resulted in severe market disruption, it said. The Summit, however, stuck to the belief that market principles, open trade and investment regimes, and effectively regulated financial markets are still the tried and tested factors for economic growth, job creation and poverty reduction. Of the immediate actions to be taken, the Summit leaders declared that in the face of deteriorating economic conditions worldwide emerging market economies and developing countries be supported, avoid negative spillovers and restore growth through a broader policy response based on closer macroeconomic cooperation.
The leaders agreed that immediate steps could be taken by recognizing the importance of monetary policy support and using fiscal measures as appropriate; providing liquidity to help unfreeze credit markets; and ensuring that the International Monetary Fund (IMF), World Bank and other multilateral development banks (MDBs) have sufficient resources to assist development countries affected by the crisis, as well as provide trade and infrastructure financing. The leaders agreed on common principles to guide financial market reform and pledged that they would continue to take the right steps to get through this crisis. Action Plan Approving an Action Plan that sets forth a comprehensive work plan to implement these principles, the leaders asked their respective finance ministers to work to ensure that the Action Plan is fully and vigorously implemented.
The Plan includes immediate actions to:
* address weaknesses in accounting and disclosure standards for off-balance sheet vehicles;
* ensure that credit rating agencies meet the highest standards and avoid conflicts of interest, provide greater disclosure to investors, and differentiate ratings for complex products;
* ensure that firms maintain adequate capital, and set out strengthened capital requirements for banks' structured credit and securitization activities;
* develop enhanced guidance to strengthen banks' risk management practices, and ensure that firms develop processes that look at whether they are accumulating too much risk;
* establish processes whereby national supervisors who oversee globally active financial institutions meet together and share information; and
* expand the Financial Stability Forum to include a broader membership of emerging economies. The leaders further instructed respective finance ministers to make specific recommendations in the following areas: Avoiding regulatory policies that exacerbate the ups and downs of the business cycle; Reviewing and aligning global accounting standards, particularly for complex securities in times of stress; Strengthening transparency of credit derivatives markets and reducing their systemic risks; Reviewing incentives for risk-taking and innovation reflected in compensation practices; and Reviewing the mandates, governance, and resource requirements of the IFIs.
There was consensus that needed reforms will be successful only if they are grounded in a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets, and efficient, effectively regulated financial systems. Reform of Financial Markets Importantly, the group of 20 has adopted the implementation of reforms that will strengthen the markets and regulatory regimes so as to avoid future crises. "Regulation is first and foremost the responsibility of national regulators who constitute the first line of defense against market instability," the declaration said.
However, pointing out the global scope of the financial markets, the group declared that there should be intensified international cooperation among regulators and strengthening of international standards and their consistent implementation to protect against adverse cross-border, regional and global developments affecting international financial stability. Regulators must ensure that their actions support market discipline, avoid potentially adverse impacts on other countries, including regulatory arbitrage, and support competition, dynamism and innovation in the marketplace, the declaration said.
Also, it said that financial institutions must bear their responsibility for the turmoil and should do their part to overcome it including by recognizing losses, improving disclosure and strengthening their governance and risk management practices.
SRIREKHA N. CHAKRAVARTY
India Post News Service
WASHINGTON DC: In what appears to have been the biggest and first of its kind global public relations exercise, heads of state of the Group of Twenty met over the weekend in Washington DC at the invitation of President George W Bush to assure economies across the globe that the world is not coming to an end. The overwhelming presence of the international media covering the G20 Summit on Financial Markets and the World Economy held at the National Museum Building in Washington DC, Nov 14-15, underscored the extent and gravity of the economic crisis even as the gathered leaders sought to assure the world of their keenness to find solutions. The G20 countries plus the European Union, together account for almost 90 percent of global GDP.
Little wonder then that the US capital was besieged by the world media as Presidents, Prime Ministers and finance ministers of these nations converged amid serious challenges to the world economy and financial markets, in a cooperative bid to restore global growth and reform world financial systems. With just six weeks of his presidency left, President Bush played the perfect host, facilitating a platform for the gathered leaders rather than taking the lead on the stage. Significantly, the Summit ended with the leaders signing on a declaration, committing to an Open Global Economy, "rejecting protectionism and not turning inward in times of financial uncertainty." And in this regard, the Group of 20 declared that for the next 12 months, they would refrain from imposing any new trade or investment barriers, imposing new export restrictions, and strive to reach an agreement this year on modalities that lead to an ambitious outcome to the Doha Round of World Trade Organization negotiations.
The G20 countries committed to put an initial list of specific measures in an Action Plan that is to be completed by March 31, 2009. Identifying the root causes of the current crisis, the declaration put the responsibility of the crisis squarely on the shoulders of the advanced countries, without necessarily putting the entire blame on the United States, which got away for being the host country - one that is in the process of transitioning to a new administration. The Action Plan is one of the five key objectives achieved by the Summit where the leaders reached a common understanding of the root causes of the global crisis; reviewed actions countries have taken and will take to address the immediate crisis and strengthen growth; agreed on common principles for reforming the financial markets; and asked finance ministers to develop further specific recommendations that will be reviewed by leaders at a subsequent summit; and reaffirmed their commitment to free market principles.
This Summit is the first of a series of meetings to discuss efforts to deal with the present crisis, as well as to address longer-term financial and economic challenges. In terms of participation at this meeting, some had initially proposed that this summit be held among a relatively small group of countries, but President Bush apparently felt it was very important to have a broader mix of countries, both developed and developing, to participate in this discussion. Although the new world order appropriately required the expansion of the members countries, it is not clear if it augurs the end of the G7, the G8, the G8 plus 5 or any other similar grouping.
In addition to the leaders of these countries, the Summit was attended by heads of the World Bank and the International Monetary Fund, as well as the UN Secretary General and the Chairman of the Financial Stability Forum. Root Causes Failure to exercise proper due diligence and seeking of higher yields without adequate appreciation of the risks involved have been found to be the root causes of the current crisis. "Policy makers, regulators and supervisors in some advanced countries did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovations, or take into account the systemic ramifications of domestic regulatory actions," the declaration underscored as a root cause of the current crisis.
The major underlying factors to the current situation were, among others inconsistent and insufficiently coordinated macroeconomic policies, inadequate structural reforms, which led to unsustainable global macroeconomic outcomes, the declaration said. These developments, together, contributed to excesses and ultimately resulted in severe market disruption, it said. The Summit, however, stuck to the belief that market principles, open trade and investment regimes, and effectively regulated financial markets are still the tried and tested factors for economic growth, job creation and poverty reduction. Of the immediate actions to be taken, the Summit leaders declared that in the face of deteriorating economic conditions worldwide emerging market economies and developing countries be supported, avoid negative spillovers and restore growth through a broader policy response based on closer macroeconomic cooperation.
The leaders agreed that immediate steps could be taken by recognizing the importance of monetary policy support and using fiscal measures as appropriate; providing liquidity to help unfreeze credit markets; and ensuring that the International Monetary Fund (IMF), World Bank and other multilateral development banks (MDBs) have sufficient resources to assist development countries affected by the crisis, as well as provide trade and infrastructure financing. The leaders agreed on common principles to guide financial market reform and pledged that they would continue to take the right steps to get through this crisis. Action Plan Approving an Action Plan that sets forth a comprehensive work plan to implement these principles, the leaders asked their respective finance ministers to work to ensure that the Action Plan is fully and vigorously implemented.
The Plan includes immediate actions to:
* address weaknesses in accounting and disclosure standards for off-balance sheet vehicles;
* ensure that credit rating agencies meet the highest standards and avoid conflicts of interest, provide greater disclosure to investors, and differentiate ratings for complex products;
* ensure that firms maintain adequate capital, and set out strengthened capital requirements for banks' structured credit and securitization activities;
* develop enhanced guidance to strengthen banks' risk management practices, and ensure that firms develop processes that look at whether they are accumulating too much risk;
* establish processes whereby national supervisors who oversee globally active financial institutions meet together and share information; and
* expand the Financial Stability Forum to include a broader membership of emerging economies. The leaders further instructed respective finance ministers to make specific recommendations in the following areas: Avoiding regulatory policies that exacerbate the ups and downs of the business cycle; Reviewing and aligning global accounting standards, particularly for complex securities in times of stress; Strengthening transparency of credit derivatives markets and reducing their systemic risks; Reviewing incentives for risk-taking and innovation reflected in compensation practices; and Reviewing the mandates, governance, and resource requirements of the IFIs.
There was consensus that needed reforms will be successful only if they are grounded in a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets, and efficient, effectively regulated financial systems. Reform of Financial Markets Importantly, the group of 20 has adopted the implementation of reforms that will strengthen the markets and regulatory regimes so as to avoid future crises. "Regulation is first and foremost the responsibility of national regulators who constitute the first line of defense against market instability," the declaration said.
However, pointing out the global scope of the financial markets, the group declared that there should be intensified international cooperation among regulators and strengthening of international standards and their consistent implementation to protect against adverse cross-border, regional and global developments affecting international financial stability. Regulators must ensure that their actions support market discipline, avoid potentially adverse impacts on other countries, including regulatory arbitrage, and support competition, dynamism and innovation in the marketplace, the declaration said.
Also, it said that financial institutions must bear their responsibility for the turmoil and should do their part to overcome it including by recognizing losses, improving disclosure and strengthening their governance and risk management practices.
SRIREKHA N. CHAKRAVARTY
Friday, October 24, 2008
Wall Street halts futures trading amid panic
From The Times
October 25, 2008
Suzy Jagger in New York
Stock markets across the world cracked yesterday, forcing Wall Street to suspend trading on a key futures contract to stem panic-selling while Moscow shut for business altogether.
Sharp losses in New York, London, Europe and the Far East raised the spectre that governments may be forced to impose emergency holidays to avert a meltdown across world stock markets.
Before Wall Street opened yesterday, American regulators suspended all trading of Dow Jones futures contracts, which had plunged. Such contracts allow traders to bet on the future direction of the Dow Jones index. The plunge had triggered an automatic circuit breaker, which halts trading to prevent a market sliding into freefall.
Nouriel Roubini, Professor of Economics at New York University, said that his prediction earlier this week that markets would have to be shut down is already coming true.
He said: “This morning, even before the markets in the US opened, the S&P futures fell by more than their daily limit. What I said yesterday has already started.”
A forced closure of stock markets in America would respresent the first time that Washington would have shut Wall Street since the terrorist attacks of September 2001. It would also have echoes of the 1930s, when President Franklin D. Roosevelt shut American banks during an enforced holiday.
Yesterday, investors became gripped with fear as they realised that recent attempts by central bankers to bail out financial institutions and cut interest rates would not prevent a severe global recession.
In New York, the Dow Jones industrial average plunged 312.30 points, or 3.6 per cent, to 8,378.95. In London, the FTSE 100 fell to its lowest level for five years, sinking 204 points, or 5 per cent, to 3,883. Among the biggest casualties were stocks that previously had been relative safe havens in otherwise crumbling sectors. Shares in HSBC plummeted 14 per cent to their lowest level since 2003 as traders worried about the level of exposure of some financial institutions to emerging economies, which this week have turned to the International Monetary Fund to seek cash loans.
Other banking stocks suffered sharp losses. Shares in Barclays, the bank that has just acquired part of Lehman Brothers, also fell 12 per cent. In New York, Goldman Sachs lost 7.5 per cent and Morgan Stanley slid 8.6 per cent.
Traders in London were spooked by new data showing that the UK economy had slowed far more than expected during the third quarter of the year, stoking fears that Britain is on the brink of a protracted recession.
The pound plunged against the US dollar, falling almost 5 per cent to $1.5522 as investors braced themselves for at least two years’ financial misery.
American investors fled to safe-haven investments, such as Treasury bonds. As demand for Treasuries drove up their price, the yield on the 30-year Government-backed bond fell to its lowest level since 1977.
Traders largely ignored new optimistic data indicating that America’s housing market may be heading for a recovery. They also ignored a slight easing in most benchmark Libor rates, which reflect the cost of borrowing money between banks.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5010556.ece
October 25, 2008
Suzy Jagger in New York
Stock markets across the world cracked yesterday, forcing Wall Street to suspend trading on a key futures contract to stem panic-selling while Moscow shut for business altogether.
Sharp losses in New York, London, Europe and the Far East raised the spectre that governments may be forced to impose emergency holidays to avert a meltdown across world stock markets.
Before Wall Street opened yesterday, American regulators suspended all trading of Dow Jones futures contracts, which had plunged. Such contracts allow traders to bet on the future direction of the Dow Jones index. The plunge had triggered an automatic circuit breaker, which halts trading to prevent a market sliding into freefall.
Nouriel Roubini, Professor of Economics at New York University, said that his prediction earlier this week that markets would have to be shut down is already coming true.
He said: “This morning, even before the markets in the US opened, the S&P futures fell by more than their daily limit. What I said yesterday has already started.”
A forced closure of stock markets in America would respresent the first time that Washington would have shut Wall Street since the terrorist attacks of September 2001. It would also have echoes of the 1930s, when President Franklin D. Roosevelt shut American banks during an enforced holiday.
Yesterday, investors became gripped with fear as they realised that recent attempts by central bankers to bail out financial institutions and cut interest rates would not prevent a severe global recession.
In New York, the Dow Jones industrial average plunged 312.30 points, or 3.6 per cent, to 8,378.95. In London, the FTSE 100 fell to its lowest level for five years, sinking 204 points, or 5 per cent, to 3,883. Among the biggest casualties were stocks that previously had been relative safe havens in otherwise crumbling sectors. Shares in HSBC plummeted 14 per cent to their lowest level since 2003 as traders worried about the level of exposure of some financial institutions to emerging economies, which this week have turned to the International Monetary Fund to seek cash loans.
Other banking stocks suffered sharp losses. Shares in Barclays, the bank that has just acquired part of Lehman Brothers, also fell 12 per cent. In New York, Goldman Sachs lost 7.5 per cent and Morgan Stanley slid 8.6 per cent.
Traders in London were spooked by new data showing that the UK economy had slowed far more than expected during the third quarter of the year, stoking fears that Britain is on the brink of a protracted recession.
The pound plunged against the US dollar, falling almost 5 per cent to $1.5522 as investors braced themselves for at least two years’ financial misery.
American investors fled to safe-haven investments, such as Treasury bonds. As demand for Treasuries drove up their price, the yield on the 30-year Government-backed bond fell to its lowest level since 1977.
Traders largely ignored new optimistic data indicating that America’s housing market may be heading for a recovery. They also ignored a slight easing in most benchmark Libor rates, which reflect the cost of borrowing money between banks.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5010556.ece
Global panic as investors take fright at spreading recession
From The Times
October 25, 2008
Gary Duncan, Economics Editor
Shares plunged around the world yesterday as fears of a global recession swept markets in a day of mayhem that saw wild swings in currencies, commodities, stock and bonds. The risk of a severe worldwide downturn triggered another rout in stock markets from Asia to America amid concerns that governments may now be powerless to halt a global slump.
The scale of risks to the world’s rapidly darkening economic prospects was underlined as China’s leaders joined Western governments for the first time to emphasise the gravity of the situation.
“The global financial crisis has been constantly spreading and worsening, creating a severe shock to global economic growth,” Wen Jiabao, the Chinese premier, told an Asia-EU summit in Beijing.
Hu Jintao, China’s President, said that his talks with European heads of government had resulted in large agreement that emergency measures to stave off global recession and reform financial regulation “must be found internationally”. “I think China will make its contribution to the stabili-sation of the world economy,” he said.
In Washington, the International Monetary Fund increased efforts to stem the spread of financial and economic upheavals across emerging markets. It struck a tentative deal with Iceland to restore confidence in the stricken Nordic economy with a $2 -billion (£1.26 billion) loan that will make Reykjavik the first Western capital to borrow from the IMF since 1976.
As a queue of other crisis-hit nations formed at the fund’s doors, including Ukraine, Serbia, Belarus and Pakistan, the IMF said it had more than $200 billion of funds available to prop up troubled economies.
The IMF is believed to be drawing up plans to allow emerging economies to borrow up to five times the amounts normally permitted, which could give countries such as Brazil access to up to $22.5 billion.
Earlier this month it announced that for the first time since the 1990s Asian crisis it was activating other emergency measures that let economies in distress secure aid more swiftly than usual.
Despite the frenzied efforts, jittery markets delivered a brutal vote of no confidence. Shares on both sides of the Atlantic were sent into another tailspin.
In London, the FTSE 100 index slumped by 9 per cent at one stage before closing down by 204.5 points, or 5 per cent. France’s CAC 40 shed another 4 per cent and Germany’s Dax index dropped by 5 per cent, driving European shares to their worst levels for five-and-a-half years.
Mike Lenhoff, of Brewin Dolphin, the London brokerage, said: “I sense we’ve moved beyond the credit crisis. There is a recognition of the damage inflicted on the global economy, that is the recession, by the credit crisis.” In early afternoon trading in New York, the Dow Jones industrial average tumbled by more than 4 per cent, while the broader-based S&P 500 index of American blue chip companies was down 3 per cent.
Overnight on Thursday the Nikkei 225 in Japan closed down by almost 10 per cent. In Moscow, trading was suspended on the stock market after it lost more than a tenth of its value yesterday and hit lows not seen since late 2004. In Europe, the vicious sell-off in shares was fuelled as a key survey of the 15-nation eurozone’s companies showed its vast services sector shrinking at its fastest pace since the aftermath of the 9/11 attacks on the US.
With eurozone manufacturing also shrinking at the fastest pace in at least a decade, markets swiftly drew the conclusion that the world’s second-largest economic bloc was joining Britain and America in recession. “This is it, we are clearly into recession,” Gilles Moec, a eurozone economist at Bank of America, said.
The worldwide panic among investors was stoked by a wave of warnings from the world’s most powerful corporate players of the toll being inflicted on their sales and profit prospects.
Shares in Sony, the electronics giant, sank to a 13-year low after it halved its expected profits. PSA Peugeot Citroën, the French carmaker, announced plans for massive production cuts, while Italy’s Fiat, Germany’s Daimler and South Korea’s Hyundai announced bleak 2009 forecasts. In the US, Chrysler said it was closing one plant early and slashing 1,825 jobs, and General Motors said that it would make big job cuts.
After Alan Greenspan, the former chairman of the US Federal Reserve, said that the global crisis had “turned out to be much broader than anything I could have imagined”, the freefall in shares spilled over into drastic swings in currency and commodity markets.
In a day of extreme volatility on foreign exchanges, the previously unassailable strength of the euro suffered one of its biggest reversals, falling by 3 per cent against a resurgent dollar, which hit fresh two-year highs. The euro fell to levels as low as $1.2488, dramatically down by almost a quarter from its record highs of $1.6038 reached as recently as mid-July.
“You are seeing the currencies move as they would in any sort of full-fledged panic,” Firas Askari, head currency trader at BMO Capital Markets’ in Toronto, said “It’s a little disconcerting to say the least. Everyone needs to take a deep breath. Personally, I think we have to be close to the end of this awful cycle. It’s usually darkest at the bottom.”
Prices for commodities, from copper to zinc, sugar and coffee, as well as oil, were battered as speculators bet that demand for the products would wilt in a world recession.
October 25, 2008
Gary Duncan, Economics Editor
Shares plunged around the world yesterday as fears of a global recession swept markets in a day of mayhem that saw wild swings in currencies, commodities, stock and bonds. The risk of a severe worldwide downturn triggered another rout in stock markets from Asia to America amid concerns that governments may now be powerless to halt a global slump.
The scale of risks to the world’s rapidly darkening economic prospects was underlined as China’s leaders joined Western governments for the first time to emphasise the gravity of the situation.
“The global financial crisis has been constantly spreading and worsening, creating a severe shock to global economic growth,” Wen Jiabao, the Chinese premier, told an Asia-EU summit in Beijing.
Hu Jintao, China’s President, said that his talks with European heads of government had resulted in large agreement that emergency measures to stave off global recession and reform financial regulation “must be found internationally”. “I think China will make its contribution to the stabili-sation of the world economy,” he said.
In Washington, the International Monetary Fund increased efforts to stem the spread of financial and economic upheavals across emerging markets. It struck a tentative deal with Iceland to restore confidence in the stricken Nordic economy with a $2 -billion (£1.26 billion) loan that will make Reykjavik the first Western capital to borrow from the IMF since 1976.
As a queue of other crisis-hit nations formed at the fund’s doors, including Ukraine, Serbia, Belarus and Pakistan, the IMF said it had more than $200 billion of funds available to prop up troubled economies.
The IMF is believed to be drawing up plans to allow emerging economies to borrow up to five times the amounts normally permitted, which could give countries such as Brazil access to up to $22.5 billion.
Earlier this month it announced that for the first time since the 1990s Asian crisis it was activating other emergency measures that let economies in distress secure aid more swiftly than usual.
Despite the frenzied efforts, jittery markets delivered a brutal vote of no confidence. Shares on both sides of the Atlantic were sent into another tailspin.
In London, the FTSE 100 index slumped by 9 per cent at one stage before closing down by 204.5 points, or 5 per cent. France’s CAC 40 shed another 4 per cent and Germany’s Dax index dropped by 5 per cent, driving European shares to their worst levels for five-and-a-half years.
Mike Lenhoff, of Brewin Dolphin, the London brokerage, said: “I sense we’ve moved beyond the credit crisis. There is a recognition of the damage inflicted on the global economy, that is the recession, by the credit crisis.” In early afternoon trading in New York, the Dow Jones industrial average tumbled by more than 4 per cent, while the broader-based S&P 500 index of American blue chip companies was down 3 per cent.
Overnight on Thursday the Nikkei 225 in Japan closed down by almost 10 per cent. In Moscow, trading was suspended on the stock market after it lost more than a tenth of its value yesterday and hit lows not seen since late 2004. In Europe, the vicious sell-off in shares was fuelled as a key survey of the 15-nation eurozone’s companies showed its vast services sector shrinking at its fastest pace since the aftermath of the 9/11 attacks on the US.
With eurozone manufacturing also shrinking at the fastest pace in at least a decade, markets swiftly drew the conclusion that the world’s second-largest economic bloc was joining Britain and America in recession. “This is it, we are clearly into recession,” Gilles Moec, a eurozone economist at Bank of America, said.
The worldwide panic among investors was stoked by a wave of warnings from the world’s most powerful corporate players of the toll being inflicted on their sales and profit prospects.
Shares in Sony, the electronics giant, sank to a 13-year low after it halved its expected profits. PSA Peugeot Citroën, the French carmaker, announced plans for massive production cuts, while Italy’s Fiat, Germany’s Daimler and South Korea’s Hyundai announced bleak 2009 forecasts. In the US, Chrysler said it was closing one plant early and slashing 1,825 jobs, and General Motors said that it would make big job cuts.
After Alan Greenspan, the former chairman of the US Federal Reserve, said that the global crisis had “turned out to be much broader than anything I could have imagined”, the freefall in shares spilled over into drastic swings in currency and commodity markets.
In a day of extreme volatility on foreign exchanges, the previously unassailable strength of the euro suffered one of its biggest reversals, falling by 3 per cent against a resurgent dollar, which hit fresh two-year highs. The euro fell to levels as low as $1.2488, dramatically down by almost a quarter from its record highs of $1.6038 reached as recently as mid-July.
“You are seeing the currencies move as they would in any sort of full-fledged panic,” Firas Askari, head currency trader at BMO Capital Markets’ in Toronto, said “It’s a little disconcerting to say the least. Everyone needs to take a deep breath. Personally, I think we have to be close to the end of this awful cycle. It’s usually darkest at the bottom.”
Prices for commodities, from copper to zinc, sugar and coffee, as well as oil, were battered as speculators bet that demand for the products would wilt in a world recession.
Thursday, October 23, 2008
Greenspan Concedes to `Flaw' in His Market Ideology
By Scott Lanman and Steve Matthews
Oct. 23 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said a ``once-in-a-century credit tsunami'' has engulfed financial markets and conceded that his free-market ideology shunning regulation was flawed.
``Yes, I found a flaw,'' Greenspan said in response to grilling from the House Committee on Oversight and Government Reform. ``That is precisely the reason I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.''
Greenspan said he was ``partially'' wrong in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected.
``We cannot expect perfection in any area where forecasting is required,'' he said. ``We have to do our best but not expect infallibility or omniscience.''
Part of the problem was that the Fed's ability to forecast the economy's trajectory is an inexact science, he said.
``If we are right 60 percent of the time in forecasting, we are doing exceptionally well; that means we are wrong 40 percent of the time,'' Greenspan said. ``Forecasting never gets to the point where it is 100 percent accurate.''
Self-Policing
The admission that free markets have their faults was a shift for the former Fed chairman who declared in a May 2005 speech that ``private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.''
Today Committee Chairman Henry Waxman, a California Democrat, said Greenspan had ``the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis.''
``You were advised to do so by many others,'' he told Greenspan. ``And now our whole economy is paying the price.''
Waxman and other lawmakers repeatedly interrupted Greenspan as he answered their questions, in contrast to deference to his testimony while he was Fed chairman.
Firms that bundle loans into securities for sale should be required to keep part of those securities, Greenspan said in prepared testimony. Other rules should address fraud and settlement of trades, he said.
Resistant to Regulation
Greenspan opposed increasing financial supervision as Fed chairman from August 1987 to January 2006. Policy makers are now struggling to contain a financial crisis marked by record foreclosures, falling asset prices and almost $660 billion in writedowns and losses tied to U.S. subprime mortgages.
Today, the former Fed chairman asked: ``What went wrong with global economic policies that had worked so effectively for nearly four decades?''
Greenspan reiterated his ``shocked disbelief'' that financial companies failed to execute sufficient ``surveillance'' on their trading counterparties to prevent surging losses. The ``breakdown'' was clearest in the market where securities firms packaged home mortgages into debt sold on to other investors, he said.
``As much as I would prefer it otherwise, in this financial environment I see no choice but to require that all securitizers retain a meaningful part of the securities they issue,'' Greenspan said. That would give the companies an incentive to ensure the assets are properly priced for their risk, advocates say.
Subprime Lending
Greenspan said the Fed didn't know the size of the subprime mortgage market until late 2005.
Securities and Exchange Commission Chairman Christopher Cox and former Treasury Secretary John Snow also appeared at the House committee hearing.
Snow said the economy is headed down a ``bad, bad path'' and he endorsed consideration of more fiscal stimulus. For the longer term, Snow said the global financial system should be reorganized by focusing on increasing transparency of ``excessive'' leverage to prevent institutions from creating too much risk.
The U.S. needs ``one strong national regulator'' to oversee firms and fix what Snow called ``a fragmented approach'' to regulation. ``Steps to restore transparency and responsibility in the marketplace will go a long way towards restoring stability and confidence,'' he said.
Addressing the trio that oversaw the U.S. financial markets as the housing bubble developed, Representative John Yarmuth, a Democrat from Kentucky, characterized them as ``three Bill Buckners,'' referring to the Boston Red Sox first baseman whose fielding error some fans blame for the team's loss in the 1986 World Series.
To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net; Steve Matthews in Atlanta at smatthews@bloomberg.net.
Last Updated: October 23, 2008 14:14 EDT
Oct. 23 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said a ``once-in-a-century credit tsunami'' has engulfed financial markets and conceded that his free-market ideology shunning regulation was flawed.
``Yes, I found a flaw,'' Greenspan said in response to grilling from the House Committee on Oversight and Government Reform. ``That is precisely the reason I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.''
Greenspan said he was ``partially'' wrong in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected.
``We cannot expect perfection in any area where forecasting is required,'' he said. ``We have to do our best but not expect infallibility or omniscience.''
Part of the problem was that the Fed's ability to forecast the economy's trajectory is an inexact science, he said.
``If we are right 60 percent of the time in forecasting, we are doing exceptionally well; that means we are wrong 40 percent of the time,'' Greenspan said. ``Forecasting never gets to the point where it is 100 percent accurate.''
Self-Policing
The admission that free markets have their faults was a shift for the former Fed chairman who declared in a May 2005 speech that ``private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.''
Today Committee Chairman Henry Waxman, a California Democrat, said Greenspan had ``the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis.''
``You were advised to do so by many others,'' he told Greenspan. ``And now our whole economy is paying the price.''
Waxman and other lawmakers repeatedly interrupted Greenspan as he answered their questions, in contrast to deference to his testimony while he was Fed chairman.
Firms that bundle loans into securities for sale should be required to keep part of those securities, Greenspan said in prepared testimony. Other rules should address fraud and settlement of trades, he said.
Resistant to Regulation
Greenspan opposed increasing financial supervision as Fed chairman from August 1987 to January 2006. Policy makers are now struggling to contain a financial crisis marked by record foreclosures, falling asset prices and almost $660 billion in writedowns and losses tied to U.S. subprime mortgages.
Today, the former Fed chairman asked: ``What went wrong with global economic policies that had worked so effectively for nearly four decades?''
Greenspan reiterated his ``shocked disbelief'' that financial companies failed to execute sufficient ``surveillance'' on their trading counterparties to prevent surging losses. The ``breakdown'' was clearest in the market where securities firms packaged home mortgages into debt sold on to other investors, he said.
``As much as I would prefer it otherwise, in this financial environment I see no choice but to require that all securitizers retain a meaningful part of the securities they issue,'' Greenspan said. That would give the companies an incentive to ensure the assets are properly priced for their risk, advocates say.
Subprime Lending
Greenspan said the Fed didn't know the size of the subprime mortgage market until late 2005.
Securities and Exchange Commission Chairman Christopher Cox and former Treasury Secretary John Snow also appeared at the House committee hearing.
Snow said the economy is headed down a ``bad, bad path'' and he endorsed consideration of more fiscal stimulus. For the longer term, Snow said the global financial system should be reorganized by focusing on increasing transparency of ``excessive'' leverage to prevent institutions from creating too much risk.
The U.S. needs ``one strong national regulator'' to oversee firms and fix what Snow called ``a fragmented approach'' to regulation. ``Steps to restore transparency and responsibility in the marketplace will go a long way towards restoring stability and confidence,'' he said.
Addressing the trio that oversaw the U.S. financial markets as the housing bubble developed, Representative John Yarmuth, a Democrat from Kentucky, characterized them as ``three Bill Buckners,'' referring to the Boston Red Sox first baseman whose fielding error some fans blame for the team's loss in the 1986 World Series.
To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net; Steve Matthews in Atlanta at smatthews@bloomberg.net.
Last Updated: October 23, 2008 14:14 EDT
Sunday, October 19, 2008
A financial new world order?
Bush says reforms must improve, not fetter, the free market; Europeans hint at more robust intervention.
By Howard LaFranchi | Staff writer of The Christian Science Monitor
from the October 20, 2008 edition
WASHINGTON - When President Bush hosts a world financial summit in the coming weeks, one of the least multilateral American presidents in decades will set in motion what could result in a full reordering of the global financial system.
The series of summits that Mr. Bush announced over the weekend at Camp David with European leaders at his side suggests a broad understanding among them: that the current crisis requires the kind of global regulatory reforms that have eluded major powers in the past.
Europeans especially are speaking of a "Bretton Woods II" that could do for financial markets what the 1944 summit at a resort in New Hampshire did for monetary policy.
But the call for a summit also underscores the degree to which a once go-it-alone presidency has shifted to embrace not only the necessity of international cooperation, but also a role of global leadership.
"Talk of a Bretton Woods II has been around to different degrees for 30 years. But the fact it is getting started with an outgoing administration and especially one that was at the center of a significant crisis between America and Europe, between America and the rest of the world, suggests the recognition that there is urgency in the air," says Simon Serfaty, an expert in US-Europe relations at the Center for Strategic and International Studies (CSIS) in Washington. "It also adds legitimacy to the coming process."
That process, which is expected to stretch into next year and a new American administration, will get under way with a summit that Bush will host sometime after Nov. 4, the date of US elections, according to a statement issued Saturday by Bush, French President Nicolas Sarkozy, and European Union Commission President José Manuel Barroso.
The initial summit is expected to be a kind of expanded Group of Eight meeting, assembling the leaders of the most industrialized nations and those of major developing economies like China, India, Brazil, and South Korea. It would aim to assess the current global crisis and to come up with a set of principles of reform.
Actual agreements on reforms could come at subsequent summits, but the initial meeting would allow Bush to place his stamp on the process before leaving office, while also facilitating a continuity of American leadership.
Saturday's meeting offered a picture of transatlantic unity, but that hardly means the road ahead will be discord-free. Bush says future reforms and new international regulations must improve but not fetter the free market, while European leaders hint at much more robust state intervention with tighter regulations.
Bush recognized the need for "regulatory institutional changes" but added, "It is essential that we preserve the foundations of democratic capitalism – commitment to free markets, free enterprise, and free trade."
In response, President Sarkozy said, "The president of the United States is right in saying that protectionism and closing one's borders is a catastrophe.... But we cannot continue along the same lines," he added, "because the same problems will trigger the same disasters."
Mr. Barroso was more succinct: "We need a new global financial order."
Those words could send shivers through a White House that is suspicious of the current chorus of world leaders – European, Russian, and others less friendly to the US – who are hailing the current economic crisis as a moment to usher in a multipolar world. Bush indicated he seeks to maintain some degree of American stewardship over the financial reform effort when he politely declined the offer of United Nations Secretary-General Ban Ki Moon to host the expanded G-8 summit at the UN in New York.
Among the issues the White House has indicated it would endorse for a reform agenda are rules for the international flow of investment funds, improved oversight of increasingly global financial institutions, and means of boosting the transparency of international financial transactions and markets.
But European leaders have called for what sound like much deeper reforms. British Prime Minister Gordon Brown, for example, has proposed a reorganization of the International Monetary Fund – a Bretton Woods institution.
Behind the European proposals is a sense that the financial crisis and America's darkening economic prospects make this an opportunity for the European Union to play a bigger international role. Last week at the close of a two-day EU summit on the financial crisis, Sarkozy predicted that an international summit would take place before the end of the year because "Europe wants it, Europe demands it. Europe will get it."
More than a show of unity with a declaration for a series of summits will be needed if the world is truly to come together to address the crisis, some observers note. "Unity of purpose is not found in a meeting or series of meetings. It's found in purpose," says Danielle Pletka, vice president for foreign-policy studies at the American Enterprise Institute in Washington. "Whether that's something the major players in this crisis can come together on remains to be seen."
But Mr. Serfaty points out that the Europeans chose to engage the Bush administration, when just a few years ago the deep divisions over the Iraq war were disrupting such cooperation.
"Rather than seeing any kind of disconnect," he says, "I think we should emphasize the fact the Europeans are doing what [the Americans] want them to do, in that they are coming together and taking a proactive approach to this crisis."
Find this article at:
http://www.csmonitor.com/2008/1020/p01s01-usec.html
By Howard LaFranchi | Staff writer of The Christian Science Monitor
from the October 20, 2008 edition
WASHINGTON - When President Bush hosts a world financial summit in the coming weeks, one of the least multilateral American presidents in decades will set in motion what could result in a full reordering of the global financial system.
The series of summits that Mr. Bush announced over the weekend at Camp David with European leaders at his side suggests a broad understanding among them: that the current crisis requires the kind of global regulatory reforms that have eluded major powers in the past.
Europeans especially are speaking of a "Bretton Woods II" that could do for financial markets what the 1944 summit at a resort in New Hampshire did for monetary policy.
But the call for a summit also underscores the degree to which a once go-it-alone presidency has shifted to embrace not only the necessity of international cooperation, but also a role of global leadership.
"Talk of a Bretton Woods II has been around to different degrees for 30 years. But the fact it is getting started with an outgoing administration and especially one that was at the center of a significant crisis between America and Europe, between America and the rest of the world, suggests the recognition that there is urgency in the air," says Simon Serfaty, an expert in US-Europe relations at the Center for Strategic and International Studies (CSIS) in Washington. "It also adds legitimacy to the coming process."
That process, which is expected to stretch into next year and a new American administration, will get under way with a summit that Bush will host sometime after Nov. 4, the date of US elections, according to a statement issued Saturday by Bush, French President Nicolas Sarkozy, and European Union Commission President José Manuel Barroso.
The initial summit is expected to be a kind of expanded Group of Eight meeting, assembling the leaders of the most industrialized nations and those of major developing economies like China, India, Brazil, and South Korea. It would aim to assess the current global crisis and to come up with a set of principles of reform.
Actual agreements on reforms could come at subsequent summits, but the initial meeting would allow Bush to place his stamp on the process before leaving office, while also facilitating a continuity of American leadership.
Saturday's meeting offered a picture of transatlantic unity, but that hardly means the road ahead will be discord-free. Bush says future reforms and new international regulations must improve but not fetter the free market, while European leaders hint at much more robust state intervention with tighter regulations.
Bush recognized the need for "regulatory institutional changes" but added, "It is essential that we preserve the foundations of democratic capitalism – commitment to free markets, free enterprise, and free trade."
In response, President Sarkozy said, "The president of the United States is right in saying that protectionism and closing one's borders is a catastrophe.... But we cannot continue along the same lines," he added, "because the same problems will trigger the same disasters."
Mr. Barroso was more succinct: "We need a new global financial order."
Those words could send shivers through a White House that is suspicious of the current chorus of world leaders – European, Russian, and others less friendly to the US – who are hailing the current economic crisis as a moment to usher in a multipolar world. Bush indicated he seeks to maintain some degree of American stewardship over the financial reform effort when he politely declined the offer of United Nations Secretary-General Ban Ki Moon to host the expanded G-8 summit at the UN in New York.
Among the issues the White House has indicated it would endorse for a reform agenda are rules for the international flow of investment funds, improved oversight of increasingly global financial institutions, and means of boosting the transparency of international financial transactions and markets.
But European leaders have called for what sound like much deeper reforms. British Prime Minister Gordon Brown, for example, has proposed a reorganization of the International Monetary Fund – a Bretton Woods institution.
Behind the European proposals is a sense that the financial crisis and America's darkening economic prospects make this an opportunity for the European Union to play a bigger international role. Last week at the close of a two-day EU summit on the financial crisis, Sarkozy predicted that an international summit would take place before the end of the year because "Europe wants it, Europe demands it. Europe will get it."
More than a show of unity with a declaration for a series of summits will be needed if the world is truly to come together to address the crisis, some observers note. "Unity of purpose is not found in a meeting or series of meetings. It's found in purpose," says Danielle Pletka, vice president for foreign-policy studies at the American Enterprise Institute in Washington. "Whether that's something the major players in this crisis can come together on remains to be seen."
But Mr. Serfaty points out that the Europeans chose to engage the Bush administration, when just a few years ago the deep divisions over the Iraq war were disrupting such cooperation.
"Rather than seeing any kind of disconnect," he says, "I think we should emphasize the fact the Europeans are doing what [the Americans] want them to do, in that they are coming together and taking a proactive approach to this crisis."
Find this article at:
http://www.csmonitor.com/2008/1020/p01s01-usec.html
Saturday, October 11, 2008
Government to go after stock market violators
The Jakarta Post, Sat, 10/11/2008
Aditya Suharmoko ,
The government is establishing a task force to help protect the slumping stock market from parties wanting to use "unhealthy" methods to benefit from the situation, Finance Minister Sri Mulyani Indrawati has announced.
Sri Mulyani said the Indonesia Stock Exchange (IDX) and the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) suspected some parties of involvement in such behavior -- one of the reasons the suspension of trading on the stock market was extended to Friday.
"If there are parties who want to reap gains while causing losses to others, there will be law enforcement. There will be a task force to deal with this," Sri Mulyani said.
The team will include officials from the Finance Ministry, the State Ministry for State Enterprises, the National Police, the Attorney General's Office and Bank Indonesia.
The police and the AGO investigators will be prepared to investigate any alleged criminal behavior in trading as early as Monday.
The market -- whose main index slumped around 21 percent in the first three days of this week -- may resume operation Monday, IDX president director Erry Firmansyah said.
Attorney General Hendarman Supandji said his office had reached a "preliminary conclusion that there are some parties trying to make use of the current situation in a bad way".
"We will be on the alert 24 hours a day," he said.
"In a time of crisis, there needs to be legal certainty, a stable situation."
Sri Mulyani said the government had decided to extend the suspension after also considering changes in risks following the drop in the U.S. stock market.
"We were not panicking, but we remained alert," she said.
"We always look at the rate of risks that change according to developments in the U.S."
She said the government had not closed the market out of fears the Jakarta Composite Index might drop as global stock markets crumbled.
"If there are (downward) movements, we will not fight it. But we do not want any parties exploiting the situation using bad means."
On rumors of a default by Bakrie Group, Sri Mulyani said Bapepam-LK and the IDX had requested the company provide a detailed and complete explanation about the rumors.
A public expos* is also necessary as "it is the company's responsibility to make a full explanation to shareholders".
In addition to the regional trend, another factor behind the Jakarta market's free fall from Monday to Wednesday was uncontrolled speculation about PT Bakrie & Brothers and its units, which dragged down the group's shares.
The decline in stock prices of Bakrie and its units, in particular PT Bumi Resources, was the main driver behind the index's 10.03 percent fall Monday, with transactions involving the group making up around a third of the total transactions.
The speculations center on concerns Bakrie will not be able to pay its short-term debts, which amount to $1.43 billion. The loans are backed by the shares of affiliated companies, including Bumi, PT Energi Mega Persada and PT Bakrie Sumatera Plantations.
Sri Mulyani also said the government had presented to the House of Representatives regulations in lieu of laws to amend laws on the deposit insurance agency, central bank and financial sector safety net, all designed to ease regulation and stimulate the financial sector.
The amendment will allow an increased limit of guarantee on bank deposits and the injection of liquidity into the banking sector by the central bank.
Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.
Source URL: http://www.thejakartapost.com/news/2008/10/11/government-go-after-stock-market-violators.html
Aditya Suharmoko ,
The government is establishing a task force to help protect the slumping stock market from parties wanting to use "unhealthy" methods to benefit from the situation, Finance Minister Sri Mulyani Indrawati has announced.
Sri Mulyani said the Indonesia Stock Exchange (IDX) and the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) suspected some parties of involvement in such behavior -- one of the reasons the suspension of trading on the stock market was extended to Friday.
"If there are parties who want to reap gains while causing losses to others, there will be law enforcement. There will be a task force to deal with this," Sri Mulyani said.
The team will include officials from the Finance Ministry, the State Ministry for State Enterprises, the National Police, the Attorney General's Office and Bank Indonesia.
The police and the AGO investigators will be prepared to investigate any alleged criminal behavior in trading as early as Monday.
The market -- whose main index slumped around 21 percent in the first three days of this week -- may resume operation Monday, IDX president director Erry Firmansyah said.
Attorney General Hendarman Supandji said his office had reached a "preliminary conclusion that there are some parties trying to make use of the current situation in a bad way".
"We will be on the alert 24 hours a day," he said.
"In a time of crisis, there needs to be legal certainty, a stable situation."
Sri Mulyani said the government had decided to extend the suspension after also considering changes in risks following the drop in the U.S. stock market.
"We were not panicking, but we remained alert," she said.
"We always look at the rate of risks that change according to developments in the U.S."
She said the government had not closed the market out of fears the Jakarta Composite Index might drop as global stock markets crumbled.
"If there are (downward) movements, we will not fight it. But we do not want any parties exploiting the situation using bad means."
On rumors of a default by Bakrie Group, Sri Mulyani said Bapepam-LK and the IDX had requested the company provide a detailed and complete explanation about the rumors.
A public expos* is also necessary as "it is the company's responsibility to make a full explanation to shareholders".
In addition to the regional trend, another factor behind the Jakarta market's free fall from Monday to Wednesday was uncontrolled speculation about PT Bakrie & Brothers and its units, which dragged down the group's shares.
The decline in stock prices of Bakrie and its units, in particular PT Bumi Resources, was the main driver behind the index's 10.03 percent fall Monday, with transactions involving the group making up around a third of the total transactions.
The speculations center on concerns Bakrie will not be able to pay its short-term debts, which amount to $1.43 billion. The loans are backed by the shares of affiliated companies, including Bumi, PT Energi Mega Persada and PT Bakrie Sumatera Plantations.
Sri Mulyani also said the government had presented to the House of Representatives regulations in lieu of laws to amend laws on the deposit insurance agency, central bank and financial sector safety net, all designed to ease regulation and stimulate the financial sector.
The amendment will allow an increased limit of guarantee on bank deposits and the injection of liquidity into the banking sector by the central bank.
Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.
Source URL: http://www.thejakartapost.com/news/2008/10/11/government-go-after-stock-market-violators.html
Friday, October 10, 2008
Tak Akan Menjelma Jadi Krisis
Kompas, Sabtu, 11 Oktober 2008
Jakarta, Kompas - Kejatuhan bursa saham dan nilai tukar rupiah yang terjadi dalam sepekan ini dinilai kecil kemungkinan menjelma menjadi krisis ekonomi berupa ambruknya perbankan dan sektor riil. Untuk meningkatkan kepercayaan pelaku pasar, pemerintah sebaiknya fokus menjaga daya beli masyarakat.
Demikian kesimpulan diskusi panel Kompas yang menghadirkan pengamat ekonomi Faisal Basri, Kepala Ekonom BNI Tony Prasetiantono, pengamat pasar modal dan perbankan Mirza Adityaswara, serta Ketua Umum Himpunan Pengusaha Muda Indonesia Erwin Aksa Mahmud, Jumat (10/10) di Jakarta.
Para panelis menilai tingkat krisis yang dihadapi Indonesia sangat berbeda dengan Amerika Serikat (AS), Eropa, dan negara maju lainnya. Di AS, krisis telah merasuk ke semua sektor, mulai dari pasar modal, perbankan, hingga sektor riil.
Namun, di Indonesia krisis hanya terjadi di pasar modal. Krisis yang terjadi di pasar modal dinilai tidak mudah bertransmisi ke sektor lain mengingat kontribusi pasar modal dalam sistem keuangan Indonesia amat kecil.
Hal senada dikatakan Wakil Presiden Jusuf Kalla di tempat terpisah. Menurut Kalla, sebenarnya ekonomi tidak terlalu terpengaruh dengan ambruknya bursa dunia, seperti Wall Street. ”Perbedaannya, kita banyak menggantungkan pada ekonomi domestik. Seperti di AS, pengaruh bursa itu sampai 1,5 kali dari produk domestik bruto mereka. Kalau kita pengaruhnya hanya 20 persen. Jadi, jangan terlalu dirisaukan,” kata Wapres.
Faisal Basri mengingatkan, penyesuaian yang terjadi di pasar modal dan nilai tukar domestik merupakan hal wajar karena seluruh dunia terkena imbas krisis keuangan AS.
Penurunan ekonomi AS dan Eropa juga tak perlu dikhawatirkan mengingat peran mereka dalam perdagangan dunia makin menyusut. Sebagai gantinya, kini muncul kekuatan ekonomi baru, seperti China, India, dan Rusia.
Tony Prasetiantono menjelaskan, krisis keuangan global yang terjadi saat ini merupakan koreksi atas kesenjangan (gap) yang terjadi antara pertumbuhan sektor riil dan sektor finansial.
Koreksi berupa penurunan harga-harga di sektor finansial dan kenaikan harga-harga di sektor riil, seperti harga komoditas.
Mirza Adityaswara menambahkan, untuk meningkatkan kepercayaan diri para pelaku pasar, pemerintah dan Bank Indonesia (BI) harus lebih fokus menjaga ketahanan sistem perbankan. Sebab, kehancuran sektor inilah yang sebenarnya dapat memicu krisis ekonomi.
Kondisi perbankan juga sangat menentukan pertumbuhan ekonomi. Investasi swasta dan konsumsi rumah tangga, yang selama ini menopang pertumbuhan ekonomi, amat mengandalkan kredit sebagai sumber pembiayaan.
Erwin Aksa Mahmud mengatakan, yang menjadi prioritas saat ini adalah menjaga daya beli masyarakat tidak turun agar ekonomi tetap tumbuh. Caranya, memberikan insentif kepada sektor riil dan menyetop kenaikan suku bunga.
Batal buka BEI
Jumat kemarin, pemerintah membatalkan rencana pembukaan kembali perdagangan di Bursa Efek Indonesia (BEI). Hal ini dilakukan karena otoritas bursa ingin melindungi emiten. Emiten perlu dilindungi dari kemungkinan keterpurukan nilai harga saham akibat sentimen negatif pasar terhadap kondisi keuangan global yang sedang krisis.
”Kami tidak ingin perusahaan Indonesia yang listed (terdaftar di BEI) menghadapi imbas yang tidak perlu, hanya karena masalah sistemik dari krisis keuangan global. Jadi, yang kami cari adalah waktu yang tepat (untuk membuka kembali bursa),” kata Menteri Keuangan sekaligus Pelaksana Jabatan Menteri Koordinator Bidang Perekonomian Sri Mulyani Indrawati.
Penyesatan
Sementara itu, Badan Pengawas Pasar Modal dan Lembaga Keuangan (Bapepam-LK) mengakui adanya penyesatan informasi atas perdagangan sejumlah saham di BEI. Penyesatan informasi tersebut telah mengakibatkan harga saham sejumlah emiten jatuh di posisi yang cukup rendah.
”Memang ada pihak-pihak yang kami curigai sengaja memberikan informasi yang salah supaya harga saham jatuh, lantas nanti ada yang mau ambil. Saya tak mau bilang siapa karena tidak etis,” kata Ahmad Fuad Rahmany, Ketua Bapepam-LK, sambil menambahkan, pihak yang menyesatkan informasi di pasar modal itu ada yang berasal dari kalangan investor dan ada dari perusahaan sekuritas atau broker.
Menurut dia, Bapepam-LK akan memeriksa investor dan broker yang diduga telah melanggar peraturan pasar modal itu setelah situasi mereda.(FAJ/REI/HAR/OIN)
faj;rei;har;oin
Dapatkan artikel ini di URL:
http://entertainment.kompas.com/read/xml/2008/10/11/02163377/tak.akan.menjelma.jadi.krisis
Jakarta, Kompas - Kejatuhan bursa saham dan nilai tukar rupiah yang terjadi dalam sepekan ini dinilai kecil kemungkinan menjelma menjadi krisis ekonomi berupa ambruknya perbankan dan sektor riil. Untuk meningkatkan kepercayaan pelaku pasar, pemerintah sebaiknya fokus menjaga daya beli masyarakat.
Demikian kesimpulan diskusi panel Kompas yang menghadirkan pengamat ekonomi Faisal Basri, Kepala Ekonom BNI Tony Prasetiantono, pengamat pasar modal dan perbankan Mirza Adityaswara, serta Ketua Umum Himpunan Pengusaha Muda Indonesia Erwin Aksa Mahmud, Jumat (10/10) di Jakarta.
Para panelis menilai tingkat krisis yang dihadapi Indonesia sangat berbeda dengan Amerika Serikat (AS), Eropa, dan negara maju lainnya. Di AS, krisis telah merasuk ke semua sektor, mulai dari pasar modal, perbankan, hingga sektor riil.
Namun, di Indonesia krisis hanya terjadi di pasar modal. Krisis yang terjadi di pasar modal dinilai tidak mudah bertransmisi ke sektor lain mengingat kontribusi pasar modal dalam sistem keuangan Indonesia amat kecil.
Hal senada dikatakan Wakil Presiden Jusuf Kalla di tempat terpisah. Menurut Kalla, sebenarnya ekonomi tidak terlalu terpengaruh dengan ambruknya bursa dunia, seperti Wall Street. ”Perbedaannya, kita banyak menggantungkan pada ekonomi domestik. Seperti di AS, pengaruh bursa itu sampai 1,5 kali dari produk domestik bruto mereka. Kalau kita pengaruhnya hanya 20 persen. Jadi, jangan terlalu dirisaukan,” kata Wapres.
Faisal Basri mengingatkan, penyesuaian yang terjadi di pasar modal dan nilai tukar domestik merupakan hal wajar karena seluruh dunia terkena imbas krisis keuangan AS.
Penurunan ekonomi AS dan Eropa juga tak perlu dikhawatirkan mengingat peran mereka dalam perdagangan dunia makin menyusut. Sebagai gantinya, kini muncul kekuatan ekonomi baru, seperti China, India, dan Rusia.
Tony Prasetiantono menjelaskan, krisis keuangan global yang terjadi saat ini merupakan koreksi atas kesenjangan (gap) yang terjadi antara pertumbuhan sektor riil dan sektor finansial.
Koreksi berupa penurunan harga-harga di sektor finansial dan kenaikan harga-harga di sektor riil, seperti harga komoditas.
Mirza Adityaswara menambahkan, untuk meningkatkan kepercayaan diri para pelaku pasar, pemerintah dan Bank Indonesia (BI) harus lebih fokus menjaga ketahanan sistem perbankan. Sebab, kehancuran sektor inilah yang sebenarnya dapat memicu krisis ekonomi.
Kondisi perbankan juga sangat menentukan pertumbuhan ekonomi. Investasi swasta dan konsumsi rumah tangga, yang selama ini menopang pertumbuhan ekonomi, amat mengandalkan kredit sebagai sumber pembiayaan.
Erwin Aksa Mahmud mengatakan, yang menjadi prioritas saat ini adalah menjaga daya beli masyarakat tidak turun agar ekonomi tetap tumbuh. Caranya, memberikan insentif kepada sektor riil dan menyetop kenaikan suku bunga.
Batal buka BEI
Jumat kemarin, pemerintah membatalkan rencana pembukaan kembali perdagangan di Bursa Efek Indonesia (BEI). Hal ini dilakukan karena otoritas bursa ingin melindungi emiten. Emiten perlu dilindungi dari kemungkinan keterpurukan nilai harga saham akibat sentimen negatif pasar terhadap kondisi keuangan global yang sedang krisis.
”Kami tidak ingin perusahaan Indonesia yang listed (terdaftar di BEI) menghadapi imbas yang tidak perlu, hanya karena masalah sistemik dari krisis keuangan global. Jadi, yang kami cari adalah waktu yang tepat (untuk membuka kembali bursa),” kata Menteri Keuangan sekaligus Pelaksana Jabatan Menteri Koordinator Bidang Perekonomian Sri Mulyani Indrawati.
Penyesatan
Sementara itu, Badan Pengawas Pasar Modal dan Lembaga Keuangan (Bapepam-LK) mengakui adanya penyesatan informasi atas perdagangan sejumlah saham di BEI. Penyesatan informasi tersebut telah mengakibatkan harga saham sejumlah emiten jatuh di posisi yang cukup rendah.
”Memang ada pihak-pihak yang kami curigai sengaja memberikan informasi yang salah supaya harga saham jatuh, lantas nanti ada yang mau ambil. Saya tak mau bilang siapa karena tidak etis,” kata Ahmad Fuad Rahmany, Ketua Bapepam-LK, sambil menambahkan, pihak yang menyesatkan informasi di pasar modal itu ada yang berasal dari kalangan investor dan ada dari perusahaan sekuritas atau broker.
Menurut dia, Bapepam-LK akan memeriksa investor dan broker yang diduga telah melanggar peraturan pasar modal itu setelah situasi mereda.(FAJ/REI/HAR/OIN)
faj;rei;har;oin
Dapatkan artikel ini di URL:
http://entertainment.kompas.com/read/xml/2008/10/11/02163377/tak.akan.menjelma.jadi.krisis
Sebab-musabab krisis di Amerika
Krisis Industri Keuangan Negara Adidaya
TEMPO Interaktif, Jum'at, 10 Oktober 2008 | 14:41 WIB
Cyrillus Harinowo
PADA Mei 2004, saya menyelenggarakan Seminar ”Dollar Versus Euro” di Hotel Shangri-La. Euro belum sekuat saat ini, tapi saya percaya mata uang Eropa itu akan menjadi jangkar dalam peta keuangan dunia. Sayangnya, kesimpulan seminar tersebut agak jauh dari dugaan saya, yaitu dolar Amerika masih akan tetap kuat, sementara euro belum memiliki kekuatan yang dapat dibandingkan dengan dolar. Ketidakpuasan saya itu akhirnya saya tuangkan dalam tulisan ”Membaca Tanda-tanda Zaman” di majalah Tempo beberapa minggu kemudian.
Tulisan tersebut merupakan hasil pengamatan saya atas perkembangan perekonomian makro selama pemerintahan Bush. Defisit anggaran mulai menggelembung, juga defisit neraca pembayaran. Utang pemerintah Amerika naik tajam. Saya memprediksi perekonomian Amerika akan mengalami crash dan euro menguat. Hati saya terpecah. Di satu sisi, saya ingin melihat prediksi saya terbukti. Di sisi lain, saya tahu persis bahwa crash perekonomian sebuah negara adidaya akan membawa konsekuensi yang luas pada perekonomian dunia.
Pada 2005 ternyata saya tak melihat prediksi itu menjadi kenyataan. Perekonomian Amerika ”baik-baik saja”. Demikian juga tahun berikutnya. Namun euro menguat secara bertahap. Pada 2007, prediksi mulai menjadi kenyataan, meskipun penyebabnya berbeda. Dari pemetaan itu, krisis yang terjadi dalam industri keuangan Amerika akhirnya menemui ujungnya: beban utang pemerintah Amerika naik tajam.
Berawal dari ketamakan
Krisis berawal dari problem yang timbul pada kredit perumahan. Kredit perumahan yang awalnya berjalan baik karena ditujukan kepada nasabah prima akhirnya meluas kepada nasabah-nasabah yang tidak layak. Nasabah yang pernah dilanda kredit macet memperoleh kembali kredit baru. Selain itu, banyak kredit yang diberikan dengan uang muka yang sangat rendah, yaitu lima persen, atau bahkan tanpa uang muka sama sekali. Banyak pula kredit yang hanya mempersyaratkan pembayaran bunga (interest only) dan tidak mewajibkan nasabah membayar cicilan pokok sama sekali.
Mengapa perbankan Amerika sampai amat teledor? Jawabannya adalah karena harga-harga properti naik tajam bertahun-tahun tanpa henti. Dengan harga rumah yang naik terus, nilai jaminan (harga rumah) juga meningkat, sedangkan jumlah pinjaman pokoknya tetap.
Karena itu, dalam perhitungan bank, walaupun tanpa uang muka, jika harga naik 20 persen per tahun, nilai jaminan akan menjadi 120 persen dari harga awal. Sehingga nilai pinjaman dibandingkan dengan jaminan turun menjadi 83 persen. Seolah-olah pada akhir tahun pertama si nasabah sudah membayar uang muka 17 persen. Inilah yang disebut loan to value ratio. Situasi itulah yang membuat bank berani memberikan kredit pemilikan rumah tanpa uang muka. Bermacam-macam kredit itulah yang disebut sebagai subprime.
Apakah kenaikan harga rumah 20 persen itu betul-betul terjadi? Seorang teman Indonesia yang tinggal di Washington, DC, membeli rumah pada 1998 dengan harga US$ 210 ribu dan lima tahun kemudian menjualnya seharga US$ 410 ribu. Dengan situasi itu, seolah-olah ia tinggal lima tahun tanpa membayar, bahkan dibayar. Di banyak kota, kenaikan harganya sering lebih ”gila”. Itulah sebabnya banyak orang memberanikan diri mengajukan pinjaman pembelian rumah kedua untuk disewakan—uang sewanya dipakai untuk membayar cicilan.
Fenomena seperti ini bisa terjadi karena harga rumah naik terus. Hanya, kenaikan harga secara sistemik seperti itu cuma terjadi jika orang yang membeli rumah makin banyak. Juga jika bank terus memasok perekonomian dengan kredit pemilikan rumah yang makin besar. Tapi, karena nasabah bank tidak semuanya nasabah prima, bahkan banyak yang ”kambuhan” kredit macet, penyakit lama itu mulai muncul. Pembayaran cicilan pun mulai seret.
Karena keadaan itu, bank mulai hati-hati menyalurkan kredit. Dampaknya, kehati-hatian bank tersebut menyebabkan harga rumah berhenti naik, bahkan mulai turun. Penurunan harga itu menyebabkan nasabah kredit pemilikan rumah mulai berpikir apakah akan meneruskan cicilan atau ngacir saja. Akhirnya, kredit macet pun membesar. Jadilah problem kemacetan kredit subprime menggelinding seperti bola salju.
Maraknya derivatif subprime
Di Amerika Serikat, industri keuangan sudah demikian ”maju”-nya. Kredit-kredit perumahan itu akhirnya oleh bank yang bersangkutan dikumpulkan dan kemudian disekuritisasi. Ini adalah suatu proses mentransformasikan kredit pemilikan rumah menjadi surat berharga (sekuritas). Istilah yang sering dipergunakan untuk surat berharga yang dijamin oleh kredit pemilikan rumah tersebut adalah mortgage back securities (MBS) dengan varian yang bernama collateralized debt obligation (CDO).
Nasabah tetap membayar cicilan kepada bank asalnya, tapi bank itu kemudian meneruskan pembayarannya kepada pihak yang membeli surat berharga tersebut. Jika pembayaran cicilan lancar, pembayaran dari bank kepada pemegang surat utang juga lancar. Namun, karena pembayaran dari nasabah sebagian mulai batuk-batuk, pembayaran kepada pemilik MBS dan CDO tersebut juga tersendat. Siapa pemegang dua jenis surat utang itu?
Proses sekuritisasi kedua varian surat utang tersebut banyak dibantu oleh lembaga keuangan yang awalnya didirikan pemerintah Amerika untuk tujuan itu, yaitu Fannie Mae dan Freddie Mac. Karena tugas tersebut, kedua lembaga itu juga memberikan jaminan. Juga karena perannya, mereka akhirnya memiliki ”stock” MBS dan CDO yang belum laku atau mereka memang ingin memilikinya.
Dengan peran seperti itu, begitu terjadi kisruh pembayaran cicilan MBS dan CDO, pasar memperkirakan kedua lembaga yang sahamnya sudah dicatatkan di New York Stock Exchange itu pasti rugi besar. Investor pun rame-rame melepas saham kedua perusahaan itu, yang berujung pada anjloknya harga saham. Dalam keadaan yang sudah amat kepepet, pemerintah Amerika menolong kedua lembaga itu.
Lembaga lain yang memiliki MBS dan CDO amat banyak, antara lain bank besar seperti Citigroup atau UBS. Karena nilai kedua jenis surat utang tersebut jatuh, bank-bank itu harus mulai melakukan ”penghapusan” (write down), yang akhirnya membuat mereka rugi dan modalnya tergerus. Investor pun melepas saham bank-bank itu, sehingga harga saham mereka pun ikut ambles.
CDS, derivatif yang sangat beracun
Beberapa bank investasi juga memiliki MBS dan CDO itu, sehingga mereka pun merugi. Tapi ternyata yang menjadi masalah lebih besar adalah ditemukannya instrumen keuangan baru (derivatif) yang bernama credit default swap (CDS).
Instrumen ini pada awalnya punya tujuan baik, yaitu memberikan ”asuransi” bagi pemiliknya jika kredit (bisa obligasi atau surat berharga lain, termasuk MBS dan CDO) yang mereka miliki terkena masalah. Yang tidak baik adalah pelaksanaannya kemudian. Lagi-lagi masalah ini timbul karena dimulai dari ketamakan.
Sebuah perusahaan yang memiliki obligasi ingin melindungi dirinya dari kemungkinan obligor gagal bayar dengan membeli asuransi yang disebut CDS itu. Dengan begitu, mereka memiliki kepastian mengenai nilai obligasi itu meskipun harus membayar premi. Perusahaan yang mengeluarkan asuransi itu di pihak lain juga harus menyisihkan dananya sebagai ”kolateral”. Jika obligasi itu akhirnya gagal bayar, perusahaan tersebut memiliki uang untuk membayar kerugian kepada pihak yang membeli asuransi tadi.
Dalam perjalanannya, perusahaan yang mengeluarkan CDS ternyata banyak yang tidak menyisihkan kolateral. Yang lebih parah, CDS yang sama diperjualbelikan. Dengan cara ini, mereka menerima premi yang besar, sehingga akhirnya dapat menghasilkan ”laba” yang kian besar. Dengan laba yang naik tajam ini, bonus juga sangat besar. Kalau obligasinya tetap lancar, transaksi seperti ini tentu amat menggiurkan. Tapi, karena MBS dan CDO mulai bermasalah, pihak asuransi pun mulai banyak diklaim. Di sinilah kerugian yang sangat besar terjadi.
Jumlah kerugian kolosal itu akhirnya memaksa pemerintah Amerika mengambil langkah darurat. Sebagian lembaga keuangan dibantu, seperti Bear Stearns, Merrill Lynch, dan AIG. Goldman Sachs dan Morgan Stanley juga dibantu dengan diizinkan ”bermutasi” menjadi bank komersial. Yang dibiarkan jatuh adalah Lehman Brothers. Bantuan itu akhirnya dibuat menjadi terstruktur dengan jumlah yang diusulkan US$ 700 miliar.
Beban utang yang menimbulkan keraguan
Upaya penyelamatan US$ 700 miliar mestinya bisa menenangkan pasar. Tapi ternyata jumlah itu menimbulkan keraguan baru, yaitu dari sisi kesehatan keuangan pemerintah Amerika. Inilah inti yang saya bicarakan di awal artikel ini dalam ”Membaca Tanda-tanda Zaman”.
Jumlah utang pemerintah kini mencapai US$ 9,7 triliun dan tiap hari bertambah US$ 1,8 miliar. Dengan upaya penyelamatan itu, batas atas utang pemerintah ditetapkan US$ 11,3 triliun. Jika ini tercapai, rasio utang Amerika terhadap produk domestik bruto akan mencapai 80 persen dan akan naik terus. Pada masa pemerintahan yang akan datang, siapa pun presidennya, bukan tidak mungkin rasionya meningkat menjadi 100 persen.
Karena itu, pemerintah dituntut lebih keras bekerja, mengencangkan ikat pinggang, sehingga meledaknya beban utang itu tidak lepas kendali. Topik itu sampai kini belum menjadi agenda pemerintah Bush. Ini berbeda dibandingkan dengan pemerintah Clinton, yang sukses menekan defisit dan bahkan mencetak surplus anggaran dalam tiga tahun terakhir pemerintahannya. Amerika memiliki tanggung jawab yang amat besar untuk mencegah krisis itu menghancurkan perekonomian dunia.
Cyrillus Harinowo, Rektor ABFII Perbanas
TEMPO Interaktif, Jum'at, 10 Oktober 2008 | 14:41 WIB
Cyrillus Harinowo
PADA Mei 2004, saya menyelenggarakan Seminar ”Dollar Versus Euro” di Hotel Shangri-La. Euro belum sekuat saat ini, tapi saya percaya mata uang Eropa itu akan menjadi jangkar dalam peta keuangan dunia. Sayangnya, kesimpulan seminar tersebut agak jauh dari dugaan saya, yaitu dolar Amerika masih akan tetap kuat, sementara euro belum memiliki kekuatan yang dapat dibandingkan dengan dolar. Ketidakpuasan saya itu akhirnya saya tuangkan dalam tulisan ”Membaca Tanda-tanda Zaman” di majalah Tempo beberapa minggu kemudian.
Tulisan tersebut merupakan hasil pengamatan saya atas perkembangan perekonomian makro selama pemerintahan Bush. Defisit anggaran mulai menggelembung, juga defisit neraca pembayaran. Utang pemerintah Amerika naik tajam. Saya memprediksi perekonomian Amerika akan mengalami crash dan euro menguat. Hati saya terpecah. Di satu sisi, saya ingin melihat prediksi saya terbukti. Di sisi lain, saya tahu persis bahwa crash perekonomian sebuah negara adidaya akan membawa konsekuensi yang luas pada perekonomian dunia.
Pada 2005 ternyata saya tak melihat prediksi itu menjadi kenyataan. Perekonomian Amerika ”baik-baik saja”. Demikian juga tahun berikutnya. Namun euro menguat secara bertahap. Pada 2007, prediksi mulai menjadi kenyataan, meskipun penyebabnya berbeda. Dari pemetaan itu, krisis yang terjadi dalam industri keuangan Amerika akhirnya menemui ujungnya: beban utang pemerintah Amerika naik tajam.
Berawal dari ketamakan
Krisis berawal dari problem yang timbul pada kredit perumahan. Kredit perumahan yang awalnya berjalan baik karena ditujukan kepada nasabah prima akhirnya meluas kepada nasabah-nasabah yang tidak layak. Nasabah yang pernah dilanda kredit macet memperoleh kembali kredit baru. Selain itu, banyak kredit yang diberikan dengan uang muka yang sangat rendah, yaitu lima persen, atau bahkan tanpa uang muka sama sekali. Banyak pula kredit yang hanya mempersyaratkan pembayaran bunga (interest only) dan tidak mewajibkan nasabah membayar cicilan pokok sama sekali.
Mengapa perbankan Amerika sampai amat teledor? Jawabannya adalah karena harga-harga properti naik tajam bertahun-tahun tanpa henti. Dengan harga rumah yang naik terus, nilai jaminan (harga rumah) juga meningkat, sedangkan jumlah pinjaman pokoknya tetap.
Karena itu, dalam perhitungan bank, walaupun tanpa uang muka, jika harga naik 20 persen per tahun, nilai jaminan akan menjadi 120 persen dari harga awal. Sehingga nilai pinjaman dibandingkan dengan jaminan turun menjadi 83 persen. Seolah-olah pada akhir tahun pertama si nasabah sudah membayar uang muka 17 persen. Inilah yang disebut loan to value ratio. Situasi itulah yang membuat bank berani memberikan kredit pemilikan rumah tanpa uang muka. Bermacam-macam kredit itulah yang disebut sebagai subprime.
Apakah kenaikan harga rumah 20 persen itu betul-betul terjadi? Seorang teman Indonesia yang tinggal di Washington, DC, membeli rumah pada 1998 dengan harga US$ 210 ribu dan lima tahun kemudian menjualnya seharga US$ 410 ribu. Dengan situasi itu, seolah-olah ia tinggal lima tahun tanpa membayar, bahkan dibayar. Di banyak kota, kenaikan harganya sering lebih ”gila”. Itulah sebabnya banyak orang memberanikan diri mengajukan pinjaman pembelian rumah kedua untuk disewakan—uang sewanya dipakai untuk membayar cicilan.
Fenomena seperti ini bisa terjadi karena harga rumah naik terus. Hanya, kenaikan harga secara sistemik seperti itu cuma terjadi jika orang yang membeli rumah makin banyak. Juga jika bank terus memasok perekonomian dengan kredit pemilikan rumah yang makin besar. Tapi, karena nasabah bank tidak semuanya nasabah prima, bahkan banyak yang ”kambuhan” kredit macet, penyakit lama itu mulai muncul. Pembayaran cicilan pun mulai seret.
Karena keadaan itu, bank mulai hati-hati menyalurkan kredit. Dampaknya, kehati-hatian bank tersebut menyebabkan harga rumah berhenti naik, bahkan mulai turun. Penurunan harga itu menyebabkan nasabah kredit pemilikan rumah mulai berpikir apakah akan meneruskan cicilan atau ngacir saja. Akhirnya, kredit macet pun membesar. Jadilah problem kemacetan kredit subprime menggelinding seperti bola salju.
Maraknya derivatif subprime
Di Amerika Serikat, industri keuangan sudah demikian ”maju”-nya. Kredit-kredit perumahan itu akhirnya oleh bank yang bersangkutan dikumpulkan dan kemudian disekuritisasi. Ini adalah suatu proses mentransformasikan kredit pemilikan rumah menjadi surat berharga (sekuritas). Istilah yang sering dipergunakan untuk surat berharga yang dijamin oleh kredit pemilikan rumah tersebut adalah mortgage back securities (MBS) dengan varian yang bernama collateralized debt obligation (CDO).
Nasabah tetap membayar cicilan kepada bank asalnya, tapi bank itu kemudian meneruskan pembayarannya kepada pihak yang membeli surat berharga tersebut. Jika pembayaran cicilan lancar, pembayaran dari bank kepada pemegang surat utang juga lancar. Namun, karena pembayaran dari nasabah sebagian mulai batuk-batuk, pembayaran kepada pemilik MBS dan CDO tersebut juga tersendat. Siapa pemegang dua jenis surat utang itu?
Proses sekuritisasi kedua varian surat utang tersebut banyak dibantu oleh lembaga keuangan yang awalnya didirikan pemerintah Amerika untuk tujuan itu, yaitu Fannie Mae dan Freddie Mac. Karena tugas tersebut, kedua lembaga itu juga memberikan jaminan. Juga karena perannya, mereka akhirnya memiliki ”stock” MBS dan CDO yang belum laku atau mereka memang ingin memilikinya.
Dengan peran seperti itu, begitu terjadi kisruh pembayaran cicilan MBS dan CDO, pasar memperkirakan kedua lembaga yang sahamnya sudah dicatatkan di New York Stock Exchange itu pasti rugi besar. Investor pun rame-rame melepas saham kedua perusahaan itu, yang berujung pada anjloknya harga saham. Dalam keadaan yang sudah amat kepepet, pemerintah Amerika menolong kedua lembaga itu.
Lembaga lain yang memiliki MBS dan CDO amat banyak, antara lain bank besar seperti Citigroup atau UBS. Karena nilai kedua jenis surat utang tersebut jatuh, bank-bank itu harus mulai melakukan ”penghapusan” (write down), yang akhirnya membuat mereka rugi dan modalnya tergerus. Investor pun melepas saham bank-bank itu, sehingga harga saham mereka pun ikut ambles.
CDS, derivatif yang sangat beracun
Beberapa bank investasi juga memiliki MBS dan CDO itu, sehingga mereka pun merugi. Tapi ternyata yang menjadi masalah lebih besar adalah ditemukannya instrumen keuangan baru (derivatif) yang bernama credit default swap (CDS).
Instrumen ini pada awalnya punya tujuan baik, yaitu memberikan ”asuransi” bagi pemiliknya jika kredit (bisa obligasi atau surat berharga lain, termasuk MBS dan CDO) yang mereka miliki terkena masalah. Yang tidak baik adalah pelaksanaannya kemudian. Lagi-lagi masalah ini timbul karena dimulai dari ketamakan.
Sebuah perusahaan yang memiliki obligasi ingin melindungi dirinya dari kemungkinan obligor gagal bayar dengan membeli asuransi yang disebut CDS itu. Dengan begitu, mereka memiliki kepastian mengenai nilai obligasi itu meskipun harus membayar premi. Perusahaan yang mengeluarkan asuransi itu di pihak lain juga harus menyisihkan dananya sebagai ”kolateral”. Jika obligasi itu akhirnya gagal bayar, perusahaan tersebut memiliki uang untuk membayar kerugian kepada pihak yang membeli asuransi tadi.
Dalam perjalanannya, perusahaan yang mengeluarkan CDS ternyata banyak yang tidak menyisihkan kolateral. Yang lebih parah, CDS yang sama diperjualbelikan. Dengan cara ini, mereka menerima premi yang besar, sehingga akhirnya dapat menghasilkan ”laba” yang kian besar. Dengan laba yang naik tajam ini, bonus juga sangat besar. Kalau obligasinya tetap lancar, transaksi seperti ini tentu amat menggiurkan. Tapi, karena MBS dan CDO mulai bermasalah, pihak asuransi pun mulai banyak diklaim. Di sinilah kerugian yang sangat besar terjadi.
Jumlah kerugian kolosal itu akhirnya memaksa pemerintah Amerika mengambil langkah darurat. Sebagian lembaga keuangan dibantu, seperti Bear Stearns, Merrill Lynch, dan AIG. Goldman Sachs dan Morgan Stanley juga dibantu dengan diizinkan ”bermutasi” menjadi bank komersial. Yang dibiarkan jatuh adalah Lehman Brothers. Bantuan itu akhirnya dibuat menjadi terstruktur dengan jumlah yang diusulkan US$ 700 miliar.
Beban utang yang menimbulkan keraguan
Upaya penyelamatan US$ 700 miliar mestinya bisa menenangkan pasar. Tapi ternyata jumlah itu menimbulkan keraguan baru, yaitu dari sisi kesehatan keuangan pemerintah Amerika. Inilah inti yang saya bicarakan di awal artikel ini dalam ”Membaca Tanda-tanda Zaman”.
Jumlah utang pemerintah kini mencapai US$ 9,7 triliun dan tiap hari bertambah US$ 1,8 miliar. Dengan upaya penyelamatan itu, batas atas utang pemerintah ditetapkan US$ 11,3 triliun. Jika ini tercapai, rasio utang Amerika terhadap produk domestik bruto akan mencapai 80 persen dan akan naik terus. Pada masa pemerintahan yang akan datang, siapa pun presidennya, bukan tidak mungkin rasionya meningkat menjadi 100 persen.
Karena itu, pemerintah dituntut lebih keras bekerja, mengencangkan ikat pinggang, sehingga meledaknya beban utang itu tidak lepas kendali. Topik itu sampai kini belum menjadi agenda pemerintah Bush. Ini berbeda dibandingkan dengan pemerintah Clinton, yang sukses menekan defisit dan bahkan mencetak surplus anggaran dalam tiga tahun terakhir pemerintahannya. Amerika memiliki tanggung jawab yang amat besar untuk mencegah krisis itu menghancurkan perekonomian dunia.
Cyrillus Harinowo, Rektor ABFII Perbanas
Afternoon Turns Dark as Stocks Plunge
New York Times, October 10, 2008
By VIKAS BAJAJ
Until 3 p.m. on Thursday, it seemed as if the stock market might escape another dark day.
Then the selling hit — and hit and hit again, mimicking trading on Tuesday and Wednesday. What had been a moderately down day ended in a rout, with the Dow Jones industrial average closing down 679 points, or 7.3 percent, leaving it below 9,000 for the first time in five years.
In the busiest day in New York Stock Exchange history, panicky investors dumped stocks en masse. Almost no corner of the market was spared, with 1,754 stocks falling and just 87 rising on the Big Board.
Despite unprecedented steps by policy makers around the world to defuse the financial crisis, fear is spreading that a deep global recession is at hand. The credit markets, the heart of the financial system, remained in near paralysis.
“There is a downward spiral of fear,” said Richard Sparks, senior equities analyst at Schaeffer’s Investment Research.
The plunge came in a stomach-churning 90 minutes. The Dow was down just 140 points at 2:30 p.m., and 200 points at 3. But then, wave after wave of selling began to roll through the market. By 3:20, the index was down 380 points. Ten minutes later, it was down 390 points. By 3:45, it was down 660. After staging a brief rally, it fell again.
In the last six trading days — starting last Thursday — the Dow has plummeted 2,251.8 points, or 20.8 percent, a decline big enough, on its own, to mark the start of a bear market. It also is similar to the drop in the Dow on Black Monday, Oct. 19, 1987, when it fell 22.6 percent.
Big oil companies like Exxon Mobil and Chevron pulled the Dow lower, falling by roughly 12 percent each.
General Motors, the embattled automaker, fell $2.15, to $4.76. As a group, financial shares were hit the hardest, falling nearly 12 percent.
At current prices, analysts say, the market is suggesting that investors fear the kind of severe and long recession the country has not had since at least the early 1970s.
Reflecting concerns about the economy, crude oil prices fell 2.7 percent, to $86.59 a barrel. OPEC, the oil-producing cartel, on Thursday called an emergency meeting for Nov. 18 to consider cutting an output in an attempt to arrest the 41 percent drop in oil prices in the last three months.
Asian markets also reacted strongly to the turmoil. In Japan, the Nikkei 225 index was down 10 percent on Friday morning, after having plunged 9 percent on Wednesday. The Hang Seng index in Hong Kong fell 7 percent and the market in Singapore was down 6.8 percent.
What has prompted the late-day sell-offs recently is a subject of intense debate and conjecture, even among market professionals, who also have been unnerved by the free fall of the week.
Some attribute it to mutual funds’ waiting until midafternoon to execute sell orders from a growing number of investors who are cutting their exposure or bailing out of the market altogether. Others say that hedge funds, which have leveraged returns in recent years by using borrowed money, are having to sell holdings to raise collateral against their borrowings.
Still others say computerized trading, which has grown significantly in recent years, often kicks in later in the day, when certain thresholds are breached.
But whatever the reasons for the late-day plunges, what is driving the market down is a lack of confidence by investors, who are skeptical that the many measures taken by the government to rescue the financial system will work. Moreover, they worry that the government’s trotting out a new initiative every day or two is a sign that maybe the situation is worse than many thought.
Some who have held on until now are starting to sell. Since the start of the year, investors have removed more than $81 billion from stock mutual funds, with nearly 40 percent of that coming in the last six weeks, according to AMG Data Services.
Trevor Callan, a financial planner in La Jolla, Calif., said he has been bombarded by calls since Wednesday from nearly every one of his clients.
“The bottom line here is we’re witnessing complete panic,” Mr. Callan said. “There are certainly periods of time where rationality is thrown out the window, and this is one of them.”
The staggering decline in stocks has some investors questioning when the markets will stabilize. In fact, some pros believe that stocks bottom when many average investors pull out on a day of heavy selling — also known as capitulation.
Michael Cerenzie, a film producer, said he had been selling out of his million-dollar position in banking stocks and was looking to invest in companies specializing in natural gas and energy.
“This isn’t going to come back,” he said of the recent stock market losses. “This is going to be a long one. We are not going to see returns like we did in the past.”
Individuals are not the only ones bailing out. Market professionals are also selling, often even when they do not want to.
Many hedge funds have been forced to sell stocks and bonds this week because their lenders, big banks like Goldman Sachs and Morgan Stanley, demanded that they put up more capital against their positions and pay down margin loans.
Those demands are determined by a variety of factors like rising volatility and falling prices — all of which have been true in the last few days. In addition, because the banks are paying more to borrow money themselves, they are charging hedge funds more for loans, several bankers said.
Hedge funds, which cater to pension plans, endowments and wealthy individuals, have also had to sell to meet redemption requests from their clients.
With hedge funds selling and banks, including several in Iceland, in trouble, the market is experiencing “really big liquidations,” said Kingman Penniman, president of KDP Advisors, a bond research firm.
Those sales have driven down prices to such an extent that bank loans, which are considered much safer than bonds, are trading at levels implying that nearly a third of them will go into default. As of the end of September, defaults have climbed to just 3.3 percent.
“We are flushing out the system,” Mr. Penniman said. Referring to bankers and investors, he said, “They have decided that there is little they can do. We wanted to de-lever the whole financial system, and the hope was that it would be done in a orderly fashion. And they have given up all hope of that.”
Jane Caron, chief economic strategist at Dwight Asset Management, a bond trading firm, said professional investors were increasingly reluctant to buy because the computer models they used in the past had failed them. Like many everyday investors, the professionals fear that even though prices have fallen significantly, they could sustain further losses.
“Nobody is willing to transact,” Ms. Caron said, “and behind that, there are a lot of concerns about solvency.”
What happened on Thursday partly reflects the unintended consequences of regulators’ attempts to bolster stock prices several weeks ago, when the Securities and Exchange Commission temporarily banned short-selling in nearly 1,000 stocks.
That restriction was lifted at midnight on Wednesday. Short-selling is a practice in which investors sell shares they do not own in the hopes of buying them back later at a lower price. Many money managers use it to hedge their investments against future losses.
Analysts said those investors were probably forced to sell shares short on Thursday to protect themselves.
Those explanations not withstanding, many money managers said they had not seen stocks beaten up quite this much in a long time. The Standard & Poor’s 500-stock index is now down nearly 42 percent from its peak a year to the day from Thursday.
That decline makes this the third-worst bear market since World War II and the sixth-worst since 1929, according to Standard & Poor’s Equity Research. It would also qualify as one of the speediest declines in stock prices in history. The S.& P. 500 closed down 7.6 percent, to 909.92. The Dow closed at 8,579.19. Nearly 8.3 million stocks were traded on the New York exchange.
John Dorfman, manager of the Dorfman Value Fund, a mutual fund based in Boston, said he thought a bottom was near. While the economy is most likely in a recession, he said, he does not expect a depression. “A crisis always feels bottomless, and it usually isn’t,” he said.
Robert M. Solow, who won the Nobel Prize in 1987 for his work on economic growth, said that “potential for instability was always there,” but he was caught by surprise at the magnitude of the problems in the economy and financial system.
“I’m as puzzled as anyone else,” he said. “I don’t have any particular wisdom to sell.”
The benchmark 10-year Treasury bill fell 1 9/32, to 101 23/32, and the yield, which moves in the opposite direction from the price, was at 3.79 percent, up from 3.64 percent late Wednesday.
Following are the results of Thursday’s Treasury auction of the 7-year note, 10-year note and 97-day cash management bills:
Reporting was contributed by Laura M. Holson, Louise Story, Graham Bowley and Diana B. Henriques.
Copyright 2008 The New York Times Company
By VIKAS BAJAJ
Until 3 p.m. on Thursday, it seemed as if the stock market might escape another dark day.
Then the selling hit — and hit and hit again, mimicking trading on Tuesday and Wednesday. What had been a moderately down day ended in a rout, with the Dow Jones industrial average closing down 679 points, or 7.3 percent, leaving it below 9,000 for the first time in five years.
In the busiest day in New York Stock Exchange history, panicky investors dumped stocks en masse. Almost no corner of the market was spared, with 1,754 stocks falling and just 87 rising on the Big Board.
Despite unprecedented steps by policy makers around the world to defuse the financial crisis, fear is spreading that a deep global recession is at hand. The credit markets, the heart of the financial system, remained in near paralysis.
“There is a downward spiral of fear,” said Richard Sparks, senior equities analyst at Schaeffer’s Investment Research.
The plunge came in a stomach-churning 90 minutes. The Dow was down just 140 points at 2:30 p.m., and 200 points at 3. But then, wave after wave of selling began to roll through the market. By 3:20, the index was down 380 points. Ten minutes later, it was down 390 points. By 3:45, it was down 660. After staging a brief rally, it fell again.
In the last six trading days — starting last Thursday — the Dow has plummeted 2,251.8 points, or 20.8 percent, a decline big enough, on its own, to mark the start of a bear market. It also is similar to the drop in the Dow on Black Monday, Oct. 19, 1987, when it fell 22.6 percent.
Big oil companies like Exxon Mobil and Chevron pulled the Dow lower, falling by roughly 12 percent each.
General Motors, the embattled automaker, fell $2.15, to $4.76. As a group, financial shares were hit the hardest, falling nearly 12 percent.
At current prices, analysts say, the market is suggesting that investors fear the kind of severe and long recession the country has not had since at least the early 1970s.
Reflecting concerns about the economy, crude oil prices fell 2.7 percent, to $86.59 a barrel. OPEC, the oil-producing cartel, on Thursday called an emergency meeting for Nov. 18 to consider cutting an output in an attempt to arrest the 41 percent drop in oil prices in the last three months.
Asian markets also reacted strongly to the turmoil. In Japan, the Nikkei 225 index was down 10 percent on Friday morning, after having plunged 9 percent on Wednesday. The Hang Seng index in Hong Kong fell 7 percent and the market in Singapore was down 6.8 percent.
What has prompted the late-day sell-offs recently is a subject of intense debate and conjecture, even among market professionals, who also have been unnerved by the free fall of the week.
Some attribute it to mutual funds’ waiting until midafternoon to execute sell orders from a growing number of investors who are cutting their exposure or bailing out of the market altogether. Others say that hedge funds, which have leveraged returns in recent years by using borrowed money, are having to sell holdings to raise collateral against their borrowings.
Still others say computerized trading, which has grown significantly in recent years, often kicks in later in the day, when certain thresholds are breached.
But whatever the reasons for the late-day plunges, what is driving the market down is a lack of confidence by investors, who are skeptical that the many measures taken by the government to rescue the financial system will work. Moreover, they worry that the government’s trotting out a new initiative every day or two is a sign that maybe the situation is worse than many thought.
Some who have held on until now are starting to sell. Since the start of the year, investors have removed more than $81 billion from stock mutual funds, with nearly 40 percent of that coming in the last six weeks, according to AMG Data Services.
Trevor Callan, a financial planner in La Jolla, Calif., said he has been bombarded by calls since Wednesday from nearly every one of his clients.
“The bottom line here is we’re witnessing complete panic,” Mr. Callan said. “There are certainly periods of time where rationality is thrown out the window, and this is one of them.”
The staggering decline in stocks has some investors questioning when the markets will stabilize. In fact, some pros believe that stocks bottom when many average investors pull out on a day of heavy selling — also known as capitulation.
Michael Cerenzie, a film producer, said he had been selling out of his million-dollar position in banking stocks and was looking to invest in companies specializing in natural gas and energy.
“This isn’t going to come back,” he said of the recent stock market losses. “This is going to be a long one. We are not going to see returns like we did in the past.”
Individuals are not the only ones bailing out. Market professionals are also selling, often even when they do not want to.
Many hedge funds have been forced to sell stocks and bonds this week because their lenders, big banks like Goldman Sachs and Morgan Stanley, demanded that they put up more capital against their positions and pay down margin loans.
Those demands are determined by a variety of factors like rising volatility and falling prices — all of which have been true in the last few days. In addition, because the banks are paying more to borrow money themselves, they are charging hedge funds more for loans, several bankers said.
Hedge funds, which cater to pension plans, endowments and wealthy individuals, have also had to sell to meet redemption requests from their clients.
With hedge funds selling and banks, including several in Iceland, in trouble, the market is experiencing “really big liquidations,” said Kingman Penniman, president of KDP Advisors, a bond research firm.
Those sales have driven down prices to such an extent that bank loans, which are considered much safer than bonds, are trading at levels implying that nearly a third of them will go into default. As of the end of September, defaults have climbed to just 3.3 percent.
“We are flushing out the system,” Mr. Penniman said. Referring to bankers and investors, he said, “They have decided that there is little they can do. We wanted to de-lever the whole financial system, and the hope was that it would be done in a orderly fashion. And they have given up all hope of that.”
Jane Caron, chief economic strategist at Dwight Asset Management, a bond trading firm, said professional investors were increasingly reluctant to buy because the computer models they used in the past had failed them. Like many everyday investors, the professionals fear that even though prices have fallen significantly, they could sustain further losses.
“Nobody is willing to transact,” Ms. Caron said, “and behind that, there are a lot of concerns about solvency.”
What happened on Thursday partly reflects the unintended consequences of regulators’ attempts to bolster stock prices several weeks ago, when the Securities and Exchange Commission temporarily banned short-selling in nearly 1,000 stocks.
That restriction was lifted at midnight on Wednesday. Short-selling is a practice in which investors sell shares they do not own in the hopes of buying them back later at a lower price. Many money managers use it to hedge their investments against future losses.
Analysts said those investors were probably forced to sell shares short on Thursday to protect themselves.
Those explanations not withstanding, many money managers said they had not seen stocks beaten up quite this much in a long time. The Standard & Poor’s 500-stock index is now down nearly 42 percent from its peak a year to the day from Thursday.
That decline makes this the third-worst bear market since World War II and the sixth-worst since 1929, according to Standard & Poor’s Equity Research. It would also qualify as one of the speediest declines in stock prices in history. The S.& P. 500 closed down 7.6 percent, to 909.92. The Dow closed at 8,579.19. Nearly 8.3 million stocks were traded on the New York exchange.
John Dorfman, manager of the Dorfman Value Fund, a mutual fund based in Boston, said he thought a bottom was near. While the economy is most likely in a recession, he said, he does not expect a depression. “A crisis always feels bottomless, and it usually isn’t,” he said.
Robert M. Solow, who won the Nobel Prize in 1987 for his work on economic growth, said that “potential for instability was always there,” but he was caught by surprise at the magnitude of the problems in the economy and financial system.
“I’m as puzzled as anyone else,” he said. “I don’t have any particular wisdom to sell.”
The benchmark 10-year Treasury bill fell 1 9/32, to 101 23/32, and the yield, which moves in the opposite direction from the price, was at 3.79 percent, up from 3.64 percent late Wednesday.
Following are the results of Thursday’s Treasury auction of the 7-year note, 10-year note and 97-day cash management bills:
Reporting was contributed by Laura M. Holson, Louise Story, Graham Bowley and Diana B. Henriques.
Copyright 2008 The New York Times Company
BEJ Rontok
Investor Panik, Perdagangan Dihentikan
Kompas, Kamis, 9 Oktober 2008
Jakarta, Kompas - Otoritas Bursa Efek Indonesia akhirnya menghentikan sementara perdagangan (suspensi) seluruh saham dan derivatif, Rabu (8/10) pukul 11.06 WIB. Suspensi dilakukan karena penurunan indeks harga saham gabungan sudah berada di luar batas kewajaran.
Pada perdagangan saham sesi pertama kemarin, IHSG anjlok 168,05 poin atau turun 10,38 persen menjadi 1.451,66 poin. Penurunan IHSG sedalam itu dinilai tidak masuk akal karena total nilai transaksi perdagangan saham dan derivatif (turunan saham) sampai menjelang suspensi dilakukan relatif kecil, hanya Rp 952,16 miliar.
”Kalau nilai perdagangan Rp 3 triliun-Rp 4 triliun, penurunan 10 persen mungkin masih bisa diterima akal karena saat ini seluruh bursa global juga terkoreksi. Namun, dengan nilai transaksi di bawah Rp 1 triliun, penurunan itu sangat irasional. Ada sesuatu yang tidak tepat,” kata Direktur Utama BEI Erry Firmansyah.
Menurut Erry, BEI harus segera melakukan suspensi pada saat perdagangan saham tengah berlangsung untuk menghindari IHSG jatuh lebih dalam lagi. BEI melihat bahwa aksi jual saham secara membabi buta yang dilakukan investor masih akan terus berlanjut jika perdagangan tetap dibuka.
”Hari ini (kemarin) pasar sangat panik. Kami sedang mencermati faktor-faktor lain yang menyebabkan pasar kita turun di luar pengaruh sentimen negatif terhadap pelemahan bursa regional dan global,” kata Erry.
Menanggapi penghentian sementara perdagangan, Wakil Presiden Muhammad Jusuf Kalla mengatakan, hal tersebut merupakan sesuatu yang lumrah dan tak bisa dihindari.
Sementara itu, semalam Presiden Susilo Bambang Yudhoyono memimpin rapat terbatas (ratas) yang membahas langkah pemerintah menyusul dihentikannya perdagangan saham di BEI. Dalam ratas itu hadir Wapres Jusuf Kalla, Deputi Gubernur Senior Miranda S Goeltom, Menteri Keuangan ad interim yang dijabat Menneg BUMN Sofyan Djalil, Menteri Sekretaris Negara Hatta Rajasa, dan Ketua Umum Kadin MS Hidayat. Hingga pukul 23.30 ratas masih berlangsung.
Akumulasi 22,17 persen
Anjloknya perdagangan saham membuat akumulasi penurunan IHSG selama tiga hari terakhir mencapai 22,17 persen. Senin lalu, IHSG anjlok 10,03 persen dan Selasa turun lagi 1,76 persen.
Jika dibandingkan dengan level IHSG pada 2 Januari 2008 yang berada di level 2.731,51, posisi IHSG kemarin telah merosot 46,85 persen. Atau jika dengan posisi tertinggi IHSG pada 9 Januari 2008 pada level 2.830,26 telah turun 48,70 persen.
Beberapa saat setelah suspensi, BEI menggelar konferensi pers mendadak. Seusai konferensi pers, BEI juga melakukan pertemuan tertutup dengan petinggi semua perusahaan sekuritas di Indonesia. BEI belum dapat memastikan sampai kapan perdagangan akan dihentikan.
Pengamat pasar modal, Adler Manurung, menilai koreksi mendalam terhadap IHSG kemarin tak hanya dipengaruhi sentimen negatif investor terhadap pelemahan indeks bursa global menyusul krisis finansial di AS. Koreksi itu juga sangat dipengaruhi transaksi naked short selling yang dilakukan spekulan.
Transaksi naked short selling adalah aksi menjual saham oleh investor yang sama sekali tidak memiliki saham dan jaminan berupa dana di perusahaan sekuritas. Investor melakukan transaksi itu dengan harapan harga saham akan turun untuk kemudian dibeli kembali pada hari yang sama.
Sekalipun dilarang oleh Badan Pengawas Pasar Modal dan Lembaga Keuangan, Adler memastikan transaksi itu marak terjadi di pasar modal Indonesia karena pelakunya tidak pernah diungkap dan ditindak.
Adapun sejumlah investor menilai kejatuhan bursa kemarin juga sangat dipengaruhi oleh penjualan saham secara paksa (forced sell) terkait dengan transaksi margin para investor. Dalam hal ini, perusahaan sekuritas menjual saham investor yang punya pinjaman pada harga berapa pun.
Komaruddin Muchtar, seorang investor, bercerita, ”Tadi sore saya dihubungi broker dan bilang saham-saham saya akan dijual paksa berapa pun harganya. Ini jelas akan membuat indeks makin terpuruk,” kata Komaruddin.
Pengamat pasar modal, Yanuar Rizky, memperkirakan, jual paksa ini masih akan terus terjadi saat perdagangan saham akan dibuka kembali. Menurut dia, jual paksa menjadi marak terjadi karena selama ini perusahaan sekuritas berlomba-lomba memberikan pinjaman dana kepada investor untuk membeli saham tanpa jaminan memadai.
”Saat saham jatuh seperti sekarang, broker tidak mau ambil risiko. Saham-saham investor pun diobral. Ini adalah akibat dari pasar kita yang sangat liar, tidak pernah diawasi,” katanya.
Pengamat pasar modal, Felix Sindhunata, mengatakan, BEI dan Bapepam-LK harus segera menjelaskan kepada publik apa yang terjadi. Menurut dia, anjloknya IHSG lebih dari 20 persen selama tiga hari menunjukkan ada sesuatu yang salah dalam struktur dan mekanisme investasi di BEI. (har/osd/REI)
har;osd;rei
Dapatkan artikel ini di URL:
http://entertainment.kompas.com/read/xml/2008/10/09/03003528/investor.panik.perdagangan.dihentikan
Kompas, Kamis, 9 Oktober 2008
Jakarta, Kompas - Otoritas Bursa Efek Indonesia akhirnya menghentikan sementara perdagangan (suspensi) seluruh saham dan derivatif, Rabu (8/10) pukul 11.06 WIB. Suspensi dilakukan karena penurunan indeks harga saham gabungan sudah berada di luar batas kewajaran.
Pada perdagangan saham sesi pertama kemarin, IHSG anjlok 168,05 poin atau turun 10,38 persen menjadi 1.451,66 poin. Penurunan IHSG sedalam itu dinilai tidak masuk akal karena total nilai transaksi perdagangan saham dan derivatif (turunan saham) sampai menjelang suspensi dilakukan relatif kecil, hanya Rp 952,16 miliar.
”Kalau nilai perdagangan Rp 3 triliun-Rp 4 triliun, penurunan 10 persen mungkin masih bisa diterima akal karena saat ini seluruh bursa global juga terkoreksi. Namun, dengan nilai transaksi di bawah Rp 1 triliun, penurunan itu sangat irasional. Ada sesuatu yang tidak tepat,” kata Direktur Utama BEI Erry Firmansyah.
Menurut Erry, BEI harus segera melakukan suspensi pada saat perdagangan saham tengah berlangsung untuk menghindari IHSG jatuh lebih dalam lagi. BEI melihat bahwa aksi jual saham secara membabi buta yang dilakukan investor masih akan terus berlanjut jika perdagangan tetap dibuka.
”Hari ini (kemarin) pasar sangat panik. Kami sedang mencermati faktor-faktor lain yang menyebabkan pasar kita turun di luar pengaruh sentimen negatif terhadap pelemahan bursa regional dan global,” kata Erry.
Menanggapi penghentian sementara perdagangan, Wakil Presiden Muhammad Jusuf Kalla mengatakan, hal tersebut merupakan sesuatu yang lumrah dan tak bisa dihindari.
Sementara itu, semalam Presiden Susilo Bambang Yudhoyono memimpin rapat terbatas (ratas) yang membahas langkah pemerintah menyusul dihentikannya perdagangan saham di BEI. Dalam ratas itu hadir Wapres Jusuf Kalla, Deputi Gubernur Senior Miranda S Goeltom, Menteri Keuangan ad interim yang dijabat Menneg BUMN Sofyan Djalil, Menteri Sekretaris Negara Hatta Rajasa, dan Ketua Umum Kadin MS Hidayat. Hingga pukul 23.30 ratas masih berlangsung.
Akumulasi 22,17 persen
Anjloknya perdagangan saham membuat akumulasi penurunan IHSG selama tiga hari terakhir mencapai 22,17 persen. Senin lalu, IHSG anjlok 10,03 persen dan Selasa turun lagi 1,76 persen.
Jika dibandingkan dengan level IHSG pada 2 Januari 2008 yang berada di level 2.731,51, posisi IHSG kemarin telah merosot 46,85 persen. Atau jika dengan posisi tertinggi IHSG pada 9 Januari 2008 pada level 2.830,26 telah turun 48,70 persen.
Beberapa saat setelah suspensi, BEI menggelar konferensi pers mendadak. Seusai konferensi pers, BEI juga melakukan pertemuan tertutup dengan petinggi semua perusahaan sekuritas di Indonesia. BEI belum dapat memastikan sampai kapan perdagangan akan dihentikan.
Pengamat pasar modal, Adler Manurung, menilai koreksi mendalam terhadap IHSG kemarin tak hanya dipengaruhi sentimen negatif investor terhadap pelemahan indeks bursa global menyusul krisis finansial di AS. Koreksi itu juga sangat dipengaruhi transaksi naked short selling yang dilakukan spekulan.
Transaksi naked short selling adalah aksi menjual saham oleh investor yang sama sekali tidak memiliki saham dan jaminan berupa dana di perusahaan sekuritas. Investor melakukan transaksi itu dengan harapan harga saham akan turun untuk kemudian dibeli kembali pada hari yang sama.
Sekalipun dilarang oleh Badan Pengawas Pasar Modal dan Lembaga Keuangan, Adler memastikan transaksi itu marak terjadi di pasar modal Indonesia karena pelakunya tidak pernah diungkap dan ditindak.
Adapun sejumlah investor menilai kejatuhan bursa kemarin juga sangat dipengaruhi oleh penjualan saham secara paksa (forced sell) terkait dengan transaksi margin para investor. Dalam hal ini, perusahaan sekuritas menjual saham investor yang punya pinjaman pada harga berapa pun.
Komaruddin Muchtar, seorang investor, bercerita, ”Tadi sore saya dihubungi broker dan bilang saham-saham saya akan dijual paksa berapa pun harganya. Ini jelas akan membuat indeks makin terpuruk,” kata Komaruddin.
Pengamat pasar modal, Yanuar Rizky, memperkirakan, jual paksa ini masih akan terus terjadi saat perdagangan saham akan dibuka kembali. Menurut dia, jual paksa menjadi marak terjadi karena selama ini perusahaan sekuritas berlomba-lomba memberikan pinjaman dana kepada investor untuk membeli saham tanpa jaminan memadai.
”Saat saham jatuh seperti sekarang, broker tidak mau ambil risiko. Saham-saham investor pun diobral. Ini adalah akibat dari pasar kita yang sangat liar, tidak pernah diawasi,” katanya.
Pengamat pasar modal, Felix Sindhunata, mengatakan, BEI dan Bapepam-LK harus segera menjelaskan kepada publik apa yang terjadi. Menurut dia, anjloknya IHSG lebih dari 20 persen selama tiga hari menunjukkan ada sesuatu yang salah dalam struktur dan mekanisme investasi di BEI. (har/osd/REI)
har;osd;rei
Dapatkan artikel ini di URL:
http://entertainment.kompas.com/read/xml/2008/10/09/03003528/investor.panik.perdagangan.dihentikan
Saturday, October 4, 2008
Wall Street Mungkin Menolak Talangan US$ 700 Miliar
Tempo Interaktif
Minggu, 05 Oktober 2008 | 10:36 WIB
TEMPO Interaktif, Jakarta: Kekhawatiran meningkat bahwa bank-bank dan institusi keuangan Wall Street akan menolak berpartisipasi dalam paket talangan US$ 700 miliar pemerintah AS. Hal ini akan membuat pasar global dan perekonomian dunia dalam kondisi berbahaya beberapa bulan mendatang.
"Ada perasaan yang berkembang bahwa bank-bank mungkin memutuskan bahwa hal itu terlalu berat," kata Thomas Caldwell, Kepala dan CEO Caldwell Financial, manajer dana US$ 1 miliar lebih.
Dua minggu sebelumnya semua mata di pasar memfokuskan pada Kongres AS dan upayanya untuk meloloskan peket talangan yang diajukan Menteri Keuangan Henry Paulson. Paket itu memungkinkan pemerintah AS untuk membeli aset-aset terkait hipotek milik bank-bank Amerika, yang secara teori membebaskan pasar kredit dan mendorong perdagangan global berputar kembali.
Ahad lalu, setelah undang-undang ditolak DPR, lebih dari US$ 1 triliun tersapu nilainya dari pasar AS saat pasar dilanda kepanikan. Undang-undang itu akhirnya lolos Jumat sore, setelah memasukkan pembebasan pajak US$ 149 miliar dan aturan tegas untuk bank-bank yang berpartisipasi.
Namun analis Wall Street meyakini penambahan begitu banyak aturan dalam undang-undang itu akan menghalangi partisipan potensial.
Salah satu elemen yang paling tidak menarik adalah penahanan penerimaan eksekutif di bank-bank yang berpartisipasi dalam paket talangan. Hal ini meliputi pembatasan upah terkait saham dan pelarangan penerimaan-penerimaan nonkontrak lainnya bagi eksekutif.
"Saya pikir aturan gado-gado ini cukup untuk membuat para eksekutif menolak berpartisipasi," ujar Caldwell.
Sumber yang dekat dengan Goldman Sachs dan Merrill Lynch mengindikasikan bank-bank itu mungkin tidak berpartisipasi dalam program talangan saat berkembang pandangan di Wall Street bahwa pasar akan bangkit dari dasar.
Para analis juga percaya bahwa keberadaan pemerintah sebagai sumber pembiayaan terakhir akan cukup untuk membuat pasar kredit berputar lagi, dan sejumlah bank tidak perlu ambil bagian terhadap aturan untuk sukses.
Wall Street mengakhiri minggu terburuknya dalam tujuh tahun hari Jumat. Indeks rata-rata industri Dow Jones ditutup melemah 157 poin pada 10.325,38.
Minggu, 05 Oktober 2008 | 10:36 WIB
TEMPO Interaktif, Jakarta: Kekhawatiran meningkat bahwa bank-bank dan institusi keuangan Wall Street akan menolak berpartisipasi dalam paket talangan US$ 700 miliar pemerintah AS. Hal ini akan membuat pasar global dan perekonomian dunia dalam kondisi berbahaya beberapa bulan mendatang.
"Ada perasaan yang berkembang bahwa bank-bank mungkin memutuskan bahwa hal itu terlalu berat," kata Thomas Caldwell, Kepala dan CEO Caldwell Financial, manajer dana US$ 1 miliar lebih.
Dua minggu sebelumnya semua mata di pasar memfokuskan pada Kongres AS dan upayanya untuk meloloskan peket talangan yang diajukan Menteri Keuangan Henry Paulson. Paket itu memungkinkan pemerintah AS untuk membeli aset-aset terkait hipotek milik bank-bank Amerika, yang secara teori membebaskan pasar kredit dan mendorong perdagangan global berputar kembali.
Ahad lalu, setelah undang-undang ditolak DPR, lebih dari US$ 1 triliun tersapu nilainya dari pasar AS saat pasar dilanda kepanikan. Undang-undang itu akhirnya lolos Jumat sore, setelah memasukkan pembebasan pajak US$ 149 miliar dan aturan tegas untuk bank-bank yang berpartisipasi.
Namun analis Wall Street meyakini penambahan begitu banyak aturan dalam undang-undang itu akan menghalangi partisipan potensial.
Salah satu elemen yang paling tidak menarik adalah penahanan penerimaan eksekutif di bank-bank yang berpartisipasi dalam paket talangan. Hal ini meliputi pembatasan upah terkait saham dan pelarangan penerimaan-penerimaan nonkontrak lainnya bagi eksekutif.
"Saya pikir aturan gado-gado ini cukup untuk membuat para eksekutif menolak berpartisipasi," ujar Caldwell.
Sumber yang dekat dengan Goldman Sachs dan Merrill Lynch mengindikasikan bank-bank itu mungkin tidak berpartisipasi dalam program talangan saat berkembang pandangan di Wall Street bahwa pasar akan bangkit dari dasar.
Para analis juga percaya bahwa keberadaan pemerintah sebagai sumber pembiayaan terakhir akan cukup untuk membuat pasar kredit berputar lagi, dan sejumlah bank tidak perlu ambil bagian terhadap aturan untuk sukses.
Wall Street mengakhiri minggu terburuknya dalam tujuh tahun hari Jumat. Indeks rata-rata industri Dow Jones ditutup melemah 157 poin pada 10.325,38.
Thursday, October 2, 2008
Senate approves bailout after revisions, 74-25
Tax breaks are added to the Wall Street package, but House passage is far from certain.
By Maura Reynolds, Richard Simon and Nicole Gaouette
Los Angeles Times Staff Writers
LA Times, October 1, 2008
WASHINGTON — The Senate voted reluctantly but solidly in favor of a modified $700-billion Wall Street rescue plan Wednesday, but it remained uncertain whether the legislation -- even with a carefully designed package of tax breaks -- would withstand the fierce crosswinds of liberal and conservative resistance in the House later this week.
The measure passed the Senate 74 to 25, with a majority of Democrats and Republicans voting in favor -- among them presidential nominees Sen. Barack Obama and Sen. John McCain. The centerpiece of the legislation gives the government the authority to buy up billions of dollars of the "toxic" assets, primarily mortgage-backed securities, that have poisoned financial markets and threaten to contaminate the rest of the economy.
"This rescue package . . . is not for the titans of Wall Street. It's not for those whose greed got us here, who chose greed over prudence," said Senate Majority Leader Harry Reid (D-Nev.). "It's for families across Nevada and across America who are fighting to keep their jobs, save their homes and make one paycheck last until another one."
The Senate action came two days after House members, facing reelection in a few weeks and confronted by calls and letters from angry constituents, rejected an earlier version of the plan and sent the stock market into a tailspin. The House will take up the new bill Friday morning.
House Minority Leader John A. Boehner (R-Ohio) said the package approved by the Senate had a "much better chance" of passing the House than the measure that was defeated Monday by a vote of 228 to 205. But he said he was "not taking anything for granted."
"I do think that the big [stock market] drop on Monday really had a chilling effect on a lot of our members and a lot of their constituents," Boehner said on Fox News.
The market reaction, compounded by opinion polls suggesting that the public was more confused by the plan than opposed to it, led the Senate to add provisions in hope of attracting enough votes to pass both chambers this week.
Some additions were meant to appeal to a broad range of Americans, such as a hike in the limit for federally insured bank deposits to $250,000 from the current $100,000 and the move to shield 24 million households from paying the alternative minimum tax.
Others were aimed at narrower interests to win the votes of specific lawmakers, such as a tax break to encourage Hollywood studios to do more filming in the United States.
The tax provisions added more than $100 billion to the cost of the plan. From the original three-page proposal by the Treasury Department, the bill has swelled to 451 pages.
Rep. Steny H. Hoyer of Maryland, the second-ranking Democrat in the House, said he expected many GOP lawmakers to find the tax and deposit insurance provisions appealing. "Clearly we have said all along that passing this bill sooner is better than passing this bill later," Hoyer said.
The presence of both presidential candidates added pressure on senators to go along with the man from their party who might occupy the White House in a matter of months.
"To Democrats and Republicans who've opposed this plan, I say, step up to the plate. Let's do what's right for the country," Obama said in a speech on the Senate floor.
McCain walked into the Senate chamber nine minutes after Obama had arrived and swept by the Illinois Democrat. A few minutes later, Obama crossed to the other side of the floor and the two shook hands and exchanged a brief greeting. The Arizona senator did not address the chamber.
Obama's running mate, Sen. Joe Biden of Delaware, voted "aye," as did California's senators, Democrats Barbara Boxer and Dianne Feinstein.
Treasury Secretary Henry M. Paulson and President Bush lauded the Senate's action and urged House members to follow suit.
Rep. Steve King (R-Iowa) said the new version of the bill contained a biodiesel tax credit he had championed, but he still planned to vote against the measure again. However, other lawmakers may be swayed, he said.
"I think that they probably put enough sweeteners in it that they will be able to get the votes," King said in an interview.
Rep. Lloyd Doggett (D-Texas) was similarly unpersuaded. "The Senate measure has changed my position from 'No' to 'Heck no,' " he said. "With the Senate amendment, the bailout has gone from bad to worse, $105 billion more in public debt worse."
Some of the changes appeared aimed at enticing specific lawmakers to change their votes from no to yes.
For instance, the bill now includes a provision to boost insurance coverage of mental illness, a priority of Rep. Jim Ramstad (R-Minn.), who voted against the bailout bill Monday. It also includes a tax benefit for bicycle commuting sought by Rep. Earl Blumenauer (D-Ore.), also a no vote on Monday. And there's an extension of the renewable energy tax credit, a priority of Rep. Gabrielle Giffords (D-Ariz.), who wants to make Arizona the "Silicon Valley of solar energy."
The tax breaks and accounting rule changes for Hollywood were apparently aimed at two Southern California Democrats -- Rep. Adam B. Schiff of Burbank and Rep. Brad Sherman of Sherman Oaks -- who voted against the plan. Sherman, who led the defection of a group of Democratic skeptics, insisted that he would not be enticed to vote for the rescue plan.
"The one thing that's been proven is the absolute fear mongering that's being used to drive us is false," Sherman complained. "I've seen members turn to each other and say, 'If we don't pass this bill, we're going to have martial law in the United States.' "
Polls conducted in recent days show that although two-thirds of Americans are angry about the rescue plan, they tend to think the bill is "the right thing to do." A poll conducted by the Pew Research Center showed 38% to 45% of the public favoring the plan.
On the Senate floor, it was clear that lawmakers, even those from the president's party, were still of two minds.
"If we don't get the credit markets working again, we will face a dramatic downturn of proportions which we have not seen in my lifetime in the United States of America and in our economy," said Sen. Judd Gregg (R-N.H.), his party's lead negotiator. "And it is something that we should not risk. We should not roll those dice."
But others dug in their heels.
"Many around here are finding comfort in the notion that 'something is better than nothing.' I believe that is a false choice," said Sen. Richard Shelby of Alabama, the top Republican on the Banking Committee. "The choice we faced was between pursuing an informed response or panic. . . . Unfortunately, we chose panic."
http://www.latimes.com/business/investing/la-fi-bailout2-2008oct02,0,1307485.story
maura.reynolds@latimes.com
richard.simon@latimes.com
nicole.gaouette@latimes.com
By Maura Reynolds, Richard Simon and Nicole Gaouette
Los Angeles Times Staff Writers
LA Times, October 1, 2008
WASHINGTON — The Senate voted reluctantly but solidly in favor of a modified $700-billion Wall Street rescue plan Wednesday, but it remained uncertain whether the legislation -- even with a carefully designed package of tax breaks -- would withstand the fierce crosswinds of liberal and conservative resistance in the House later this week.
The measure passed the Senate 74 to 25, with a majority of Democrats and Republicans voting in favor -- among them presidential nominees Sen. Barack Obama and Sen. John McCain. The centerpiece of the legislation gives the government the authority to buy up billions of dollars of the "toxic" assets, primarily mortgage-backed securities, that have poisoned financial markets and threaten to contaminate the rest of the economy.
"This rescue package . . . is not for the titans of Wall Street. It's not for those whose greed got us here, who chose greed over prudence," said Senate Majority Leader Harry Reid (D-Nev.). "It's for families across Nevada and across America who are fighting to keep their jobs, save their homes and make one paycheck last until another one."
The Senate action came two days after House members, facing reelection in a few weeks and confronted by calls and letters from angry constituents, rejected an earlier version of the plan and sent the stock market into a tailspin. The House will take up the new bill Friday morning.
House Minority Leader John A. Boehner (R-Ohio) said the package approved by the Senate had a "much better chance" of passing the House than the measure that was defeated Monday by a vote of 228 to 205. But he said he was "not taking anything for granted."
"I do think that the big [stock market] drop on Monday really had a chilling effect on a lot of our members and a lot of their constituents," Boehner said on Fox News.
The market reaction, compounded by opinion polls suggesting that the public was more confused by the plan than opposed to it, led the Senate to add provisions in hope of attracting enough votes to pass both chambers this week.
Some additions were meant to appeal to a broad range of Americans, such as a hike in the limit for federally insured bank deposits to $250,000 from the current $100,000 and the move to shield 24 million households from paying the alternative minimum tax.
Others were aimed at narrower interests to win the votes of specific lawmakers, such as a tax break to encourage Hollywood studios to do more filming in the United States.
The tax provisions added more than $100 billion to the cost of the plan. From the original three-page proposal by the Treasury Department, the bill has swelled to 451 pages.
Rep. Steny H. Hoyer of Maryland, the second-ranking Democrat in the House, said he expected many GOP lawmakers to find the tax and deposit insurance provisions appealing. "Clearly we have said all along that passing this bill sooner is better than passing this bill later," Hoyer said.
The presence of both presidential candidates added pressure on senators to go along with the man from their party who might occupy the White House in a matter of months.
"To Democrats and Republicans who've opposed this plan, I say, step up to the plate. Let's do what's right for the country," Obama said in a speech on the Senate floor.
McCain walked into the Senate chamber nine minutes after Obama had arrived and swept by the Illinois Democrat. A few minutes later, Obama crossed to the other side of the floor and the two shook hands and exchanged a brief greeting. The Arizona senator did not address the chamber.
Obama's running mate, Sen. Joe Biden of Delaware, voted "aye," as did California's senators, Democrats Barbara Boxer and Dianne Feinstein.
Treasury Secretary Henry M. Paulson and President Bush lauded the Senate's action and urged House members to follow suit.
Rep. Steve King (R-Iowa) said the new version of the bill contained a biodiesel tax credit he had championed, but he still planned to vote against the measure again. However, other lawmakers may be swayed, he said.
"I think that they probably put enough sweeteners in it that they will be able to get the votes," King said in an interview.
Rep. Lloyd Doggett (D-Texas) was similarly unpersuaded. "The Senate measure has changed my position from 'No' to 'Heck no,' " he said. "With the Senate amendment, the bailout has gone from bad to worse, $105 billion more in public debt worse."
Some of the changes appeared aimed at enticing specific lawmakers to change their votes from no to yes.
For instance, the bill now includes a provision to boost insurance coverage of mental illness, a priority of Rep. Jim Ramstad (R-Minn.), who voted against the bailout bill Monday. It also includes a tax benefit for bicycle commuting sought by Rep. Earl Blumenauer (D-Ore.), also a no vote on Monday. And there's an extension of the renewable energy tax credit, a priority of Rep. Gabrielle Giffords (D-Ariz.), who wants to make Arizona the "Silicon Valley of solar energy."
The tax breaks and accounting rule changes for Hollywood were apparently aimed at two Southern California Democrats -- Rep. Adam B. Schiff of Burbank and Rep. Brad Sherman of Sherman Oaks -- who voted against the plan. Sherman, who led the defection of a group of Democratic skeptics, insisted that he would not be enticed to vote for the rescue plan.
"The one thing that's been proven is the absolute fear mongering that's being used to drive us is false," Sherman complained. "I've seen members turn to each other and say, 'If we don't pass this bill, we're going to have martial law in the United States.' "
Polls conducted in recent days show that although two-thirds of Americans are angry about the rescue plan, they tend to think the bill is "the right thing to do." A poll conducted by the Pew Research Center showed 38% to 45% of the public favoring the plan.
On the Senate floor, it was clear that lawmakers, even those from the president's party, were still of two minds.
"If we don't get the credit markets working again, we will face a dramatic downturn of proportions which we have not seen in my lifetime in the United States of America and in our economy," said Sen. Judd Gregg (R-N.H.), his party's lead negotiator. "And it is something that we should not risk. We should not roll those dice."
But others dug in their heels.
"Many around here are finding comfort in the notion that 'something is better than nothing.' I believe that is a false choice," said Sen. Richard Shelby of Alabama, the top Republican on the Banking Committee. "The choice we faced was between pursuing an informed response or panic. . . . Unfortunately, we chose panic."
http://www.latimes.com/business/investing/la-fi-bailout2-2008oct02,0,1307485.story
maura.reynolds@latimes.com
richard.simon@latimes.com
nicole.gaouette@latimes.com
Saturday, September 27, 2008
Menemukan Akar Instabilitas Finansial
Kompas, Minggu 28 September 2008 | 03:00 WIB
A PRASETYANTOKO
Buku ini menarik karena ketika ditulis pada 1986 nyaris tidak diperhatikan orang. Di-”kemas ulang” dalam terbitan baru tahun 2008, justru pemikirannya kemudian dianggap sangat relevan dengan situasi akhir-akhir ini, saat pasar finansial mengalami gejolak drastis.
Henry Kaufman, tokoh pasar modal kontemporer, memberi kata pembuka yang menegaskan relevansi pemikiran Minsky di hari ini. Demikian pula dua pengikut pemikirannya, Dimitri B Papadimitiou dan L Randall Wray, memberikan kontekstualisasi yang sangat tajam terhadap pemikiran Minsky.
Apa esensi pemikiran di dalam buku ini? Berbeda dengan pemikir di zamannya, Minsky mengajukan argumen pokok, instabilitas finansial sebenarnya berasal dari dalam dirinya sendiri (endogen) dan bukan dari luar (eksogen). Secara lebih eksplisit dia jelaskan, kekacauan ekonomi atau finansial bukanlah karena perang, kenaikan harga minyak, huru-hara sosial politik atau bencana alam. Tetapi karena sifat alamiahnya yang spekulatif.
Pandangan tentang sifat endogen instabilitas ini tidak biasa pada zamannya. Aliran yang lebih dominan pada waktu ini (hingga saat ini) justru menganggap uang dan sirkulasinya bersifat netral, maka harus dikelola secara ”bebas” sehingga menghasilkan sistem alokasi yang efisien.
Bagi pemikir monetarist ini, intervensi pada sirkulasi kapital menjadi sesuatu yang ditabukan. Sebaliknya, menurut Minsky, karena pada dasarnya sektor finansial memiliki sifat alamiah yang tidak stabil, maka perlu ”dikelola” melalui berbagai campur tangan. Dengan kata lain, intervensi merupakan keharusan.
Relevansi
Mengapa pemikiran Minsky relevan? Pasar finansial Amerika Serikat (AS) akhir-akhir ini diwarnai serangkaian gejolak mendebarkan. Menyusul pernyataan kebangkrutan lembaga keuangan terbesar keempat AS, Lehman Brothers, pasar Wall Street terguncang. Dampaknya seperti tsunami yang melibas perusahaan-perusahaan finansial besar lainnya.
Harga saham perusahaan keuangan Morgan Stanley and Goldman Sachs tiba-tiba merosot sebesar masing-masing 11 dan 16 persen. Dan, US Federal Reserve terpaksa harus menyelamatkan American International Group (AIG) dengan menggelontorkan uang sebesar 85 miliar dollar AS.
Korban serta biaya dari krisis subprime mortgage sudah terlalu banyak. Dimulai dengan penyelamatan Bear Stearns Co.Inc, kemudian disusul dengan Fannie Mae dan Freddie Mac, dan akhirnya raksasa Lehman Brothers, Merrill Lynch, dan AIG.
Kebangkrutan perusahaan-perusahaan tersebut membawa dampak yang sistematis. Pasar credit derivatives dan structured finances terkena dampak langsung. Selebihnya, pasar keuangan pada umumnya mengalami guncangan, seperti dana pensiun, reksa dana, dan pasar obligasi. Ujung persoalan akhirnya sampai juga pada ekonomi riil dan daya beli konsumen. Diperkirakan, pusat gempa di pasar finansial AS ini akan menyebar ke lebih dari 100 negara di seluruh dunia. Sebuah gelombang masif yang mahadahsyat.
Terhadap gejolak tersebut, muncul pertanyaan serius, apa sebenarnya akar dari persoalan tersebut? Dan, bukankah dunia telah mengalami persoalan serupa berkali-kali, mengapa selalu berulang? Dulu pada tahun 1929, pasar modal AS diguncang oleh kepanikan yang berujung pada depresi besar (great depression) dunia. Masa-masa sulit tersebut telah mendera hampir semua negara di dunia. Pada tahun 1998, menyusul krisis yang terjadi di Rusia, sebuah perusahaan sekuritas besar, LTCM (Long-Term Capital Management), tumbang. Dan kini, dampak krisis subprime-mortgage merajalela.
Terkait dengan kekacauan pasar finansial AS tersebut, berbagai langkah penyelamatan dilakukan. Selain AIG, pemerintah juga menginjeksi Bear Stearns Co.Inc, Fannie Mae dan Freddie Mac. Mengapa mereka diselamatkan?
AIG disebut-sebut sebagai perusahaan asuransi terbesar di AS, sementara Fannie Mae dan Freddie Mac merupakan perusahaan yang bergerak di bidang pembiayaan perumahan paling besar. Jika perusahaan-perusahaan besar ini tidak diselamatkan, kekacauan akan semakin parah. Dengan kata lain, mereka terlalu besar untuk gagal (too big to fail).
Terkait dengan usaha penyelamatan tersebut, ada sebuah pertanyaan esensial yang mengusik. Bukankah pada akhirnya otoritas harus turun tangan juga menyelamatkan bisnis besar tersebut? Mengapa menunggu sampai terjadi kegagalan di pasar?
Inikah buntut dari pandangan bahwa negara hanya diperbolehkan masuk ketika pasar sudah gagal menyelesaikan persoalannya sendiri (market failure). Inikah model negara sebagai ”pemadam kebakaran”? Bukankah langkah-langkah penyelamatan ini tak lain sebuah intervensi? Dan, jika begitu, mengapa intervensi tidak dirancang untuk diimplementasikan pada sistem ekonomi sehingga kekacauan tidak perlu terjadi?
Pertanyaan-pertanyaan ini menjadi perhatian Minsky sudah sejak lama. Namun, pemikirannya dianggap menghambat perkembangan dinamika pasar finansial. Kini, ketika terbukti premis-premis yang disampaikan Minsky benar, bukunya dilakukan repackaging atau relevan untuk dikemas dan diterbitkan kembali.
Post-Keynesian
Buku Stabilizing an Unstable Economy mencoba menjelaskan mengapa ekonomi selalu mengandung gejolak dan instabilitas. Jawabannya, karena instabilitas disebabkan oleh perilaku finansial unit-unit ekonomi yang berada dalam ruang lingkup ekonomi tersebut.
Pemikirannya sangat dipengaruhi oleh Keynes tentang nilai investasi, ketidakpastian atas masa depan, perilaku spekulasi dan sifat binatang (animal spirit). Keynes pernah mengatakan ”dalam sebuah sistem ekonomi yang tidak stabil, sifat spekulasi mendominasi perusahaan-perusahaan”.
Bagi Minsky, instabilitas bersifat alamiah (natural) pada sebuah sistem perekonomian. Maka dari itu, ekonomi memang akan bergerak secara fluktuatif, kadang naik (boom), kadang surut (bust). Dan, sifat pasang surut ini digerakkan oleh kondisi keuangan unit-unit ekonomi (perusahaan, bank, lembaga sekuritas, dan sebagainya).
Ada 3 tipe utama, perilaku para agen ekonomi. Pertama, Hedge, ketika perusahaan bisa melunasi seluruh kewajibannya dari hasil operasional usahanya. Kedua, Speculative, terjadi kalau untuk melunasi kewajibannya perusahaan harus utang dulu, mengingat hasil operasinya tidak cukup untuk menutup utang. Ketiga, Ponzi, yaitu manakala untuk menutup kewajibannya perusahaan harus menjual seluruh asetnya terlebih dahulu (likuidasi).
Sistem finansial modern memungkinkan para pelaku ekonomi bersikap spekulatif dan karena itu dengan sangat mudah berubah menjadi ponzi. Apa yang terjadi pada Lehman dan perusahaan finansial lainnya persis sama dengan apa yang dikemukakan oleh Minsky. Seandainya mereka berhati-hati (hedge), maka tidak akan terjadi kekacauan seperti ini. Akan tetapi, karena hampir semua perusahaan bersifat spekulatif, maka dengan mudah bisa berubah menjadi ponzi. Dan, pada titik ini, pemerintah harus turun tangan menyelamatkan mereka.
Jadi, tidak berlebihan jika dikatakan kalau mereka untung hasilnya ”diprivatisasi” (dimiliki privat), tetapi jika rugi, bebannya dibagikan kepada pihak lain (sosialisasi). Hal yang sama sebenarnya terjadi pada kasus Bantuan Likuiditas Bank Indonesia (BLBI).
Krisis justru disebabkan oleh ulah para pelaku usaha yang tidak berhati-hati melakukan kebijakan keuangan. Tetapi ketika kondisi keuangan mereka jebol, APBN-lah yang harus menanggungnya. Lebih parah lagi, bantuan itu pun dikorupsi. Jadi, kurang apa lagi untuk menyeret para pelaku pembobolan BLBI ke meja hijau? Kasus ini mendesak dibuka kembali.
Mungkin inilah saatnya untuk memikirkan ulang format kebijakan ekonomi, baik pada level mikro (perusahaan), nasional, maupun global. Mungkinkah sistem yang mengandalkan fundamentalisme pasar seperti terjadi selama ini tidak akan bertahan lagi? Inikah saatnya kembali menata arsitektur baru sistem finansial global, di mana pola intervensi negara menjadi salah satu tulang punggungnya?
Banyak pengamat mulai mengatakan, rentetan krisis belakangan ini telah membawa kita kembali para era-Keynesianism. Dan, Minsky adalah seorang post-keynesianist sejati. Pemikirannya memang patut dikemas kembali karena justru begitu relevan akhir-akhir ini.
A Prasetyantoko Menyelesaikan Program Doktor Ilmu Ekonomi di ENS-Lyon bekerja sama dengan ESCP-EAP, European School of Management; Pengajar di Unika Atma Jaya, Jakarta
A PRASETYANTOKO
Dapatkan artikel ini di URL:
http://entertainment.kompas.com/read/xml/2008/09/28/01125694/menemukan.akar.instabilitas.finansial
A PRASETYANTOKO
Buku ini menarik karena ketika ditulis pada 1986 nyaris tidak diperhatikan orang. Di-”kemas ulang” dalam terbitan baru tahun 2008, justru pemikirannya kemudian dianggap sangat relevan dengan situasi akhir-akhir ini, saat pasar finansial mengalami gejolak drastis.
Henry Kaufman, tokoh pasar modal kontemporer, memberi kata pembuka yang menegaskan relevansi pemikiran Minsky di hari ini. Demikian pula dua pengikut pemikirannya, Dimitri B Papadimitiou dan L Randall Wray, memberikan kontekstualisasi yang sangat tajam terhadap pemikiran Minsky.
Apa esensi pemikiran di dalam buku ini? Berbeda dengan pemikir di zamannya, Minsky mengajukan argumen pokok, instabilitas finansial sebenarnya berasal dari dalam dirinya sendiri (endogen) dan bukan dari luar (eksogen). Secara lebih eksplisit dia jelaskan, kekacauan ekonomi atau finansial bukanlah karena perang, kenaikan harga minyak, huru-hara sosial politik atau bencana alam. Tetapi karena sifat alamiahnya yang spekulatif.
Pandangan tentang sifat endogen instabilitas ini tidak biasa pada zamannya. Aliran yang lebih dominan pada waktu ini (hingga saat ini) justru menganggap uang dan sirkulasinya bersifat netral, maka harus dikelola secara ”bebas” sehingga menghasilkan sistem alokasi yang efisien.
Bagi pemikir monetarist ini, intervensi pada sirkulasi kapital menjadi sesuatu yang ditabukan. Sebaliknya, menurut Minsky, karena pada dasarnya sektor finansial memiliki sifat alamiah yang tidak stabil, maka perlu ”dikelola” melalui berbagai campur tangan. Dengan kata lain, intervensi merupakan keharusan.
Relevansi
Mengapa pemikiran Minsky relevan? Pasar finansial Amerika Serikat (AS) akhir-akhir ini diwarnai serangkaian gejolak mendebarkan. Menyusul pernyataan kebangkrutan lembaga keuangan terbesar keempat AS, Lehman Brothers, pasar Wall Street terguncang. Dampaknya seperti tsunami yang melibas perusahaan-perusahaan finansial besar lainnya.
Harga saham perusahaan keuangan Morgan Stanley and Goldman Sachs tiba-tiba merosot sebesar masing-masing 11 dan 16 persen. Dan, US Federal Reserve terpaksa harus menyelamatkan American International Group (AIG) dengan menggelontorkan uang sebesar 85 miliar dollar AS.
Korban serta biaya dari krisis subprime mortgage sudah terlalu banyak. Dimulai dengan penyelamatan Bear Stearns Co.Inc, kemudian disusul dengan Fannie Mae dan Freddie Mac, dan akhirnya raksasa Lehman Brothers, Merrill Lynch, dan AIG.
Kebangkrutan perusahaan-perusahaan tersebut membawa dampak yang sistematis. Pasar credit derivatives dan structured finances terkena dampak langsung. Selebihnya, pasar keuangan pada umumnya mengalami guncangan, seperti dana pensiun, reksa dana, dan pasar obligasi. Ujung persoalan akhirnya sampai juga pada ekonomi riil dan daya beli konsumen. Diperkirakan, pusat gempa di pasar finansial AS ini akan menyebar ke lebih dari 100 negara di seluruh dunia. Sebuah gelombang masif yang mahadahsyat.
Terhadap gejolak tersebut, muncul pertanyaan serius, apa sebenarnya akar dari persoalan tersebut? Dan, bukankah dunia telah mengalami persoalan serupa berkali-kali, mengapa selalu berulang? Dulu pada tahun 1929, pasar modal AS diguncang oleh kepanikan yang berujung pada depresi besar (great depression) dunia. Masa-masa sulit tersebut telah mendera hampir semua negara di dunia. Pada tahun 1998, menyusul krisis yang terjadi di Rusia, sebuah perusahaan sekuritas besar, LTCM (Long-Term Capital Management), tumbang. Dan kini, dampak krisis subprime-mortgage merajalela.
Terkait dengan kekacauan pasar finansial AS tersebut, berbagai langkah penyelamatan dilakukan. Selain AIG, pemerintah juga menginjeksi Bear Stearns Co.Inc, Fannie Mae dan Freddie Mac. Mengapa mereka diselamatkan?
AIG disebut-sebut sebagai perusahaan asuransi terbesar di AS, sementara Fannie Mae dan Freddie Mac merupakan perusahaan yang bergerak di bidang pembiayaan perumahan paling besar. Jika perusahaan-perusahaan besar ini tidak diselamatkan, kekacauan akan semakin parah. Dengan kata lain, mereka terlalu besar untuk gagal (too big to fail).
Terkait dengan usaha penyelamatan tersebut, ada sebuah pertanyaan esensial yang mengusik. Bukankah pada akhirnya otoritas harus turun tangan juga menyelamatkan bisnis besar tersebut? Mengapa menunggu sampai terjadi kegagalan di pasar?
Inikah buntut dari pandangan bahwa negara hanya diperbolehkan masuk ketika pasar sudah gagal menyelesaikan persoalannya sendiri (market failure). Inikah model negara sebagai ”pemadam kebakaran”? Bukankah langkah-langkah penyelamatan ini tak lain sebuah intervensi? Dan, jika begitu, mengapa intervensi tidak dirancang untuk diimplementasikan pada sistem ekonomi sehingga kekacauan tidak perlu terjadi?
Pertanyaan-pertanyaan ini menjadi perhatian Minsky sudah sejak lama. Namun, pemikirannya dianggap menghambat perkembangan dinamika pasar finansial. Kini, ketika terbukti premis-premis yang disampaikan Minsky benar, bukunya dilakukan repackaging atau relevan untuk dikemas dan diterbitkan kembali.
Post-Keynesian
Buku Stabilizing an Unstable Economy mencoba menjelaskan mengapa ekonomi selalu mengandung gejolak dan instabilitas. Jawabannya, karena instabilitas disebabkan oleh perilaku finansial unit-unit ekonomi yang berada dalam ruang lingkup ekonomi tersebut.
Pemikirannya sangat dipengaruhi oleh Keynes tentang nilai investasi, ketidakpastian atas masa depan, perilaku spekulasi dan sifat binatang (animal spirit). Keynes pernah mengatakan ”dalam sebuah sistem ekonomi yang tidak stabil, sifat spekulasi mendominasi perusahaan-perusahaan”.
Bagi Minsky, instabilitas bersifat alamiah (natural) pada sebuah sistem perekonomian. Maka dari itu, ekonomi memang akan bergerak secara fluktuatif, kadang naik (boom), kadang surut (bust). Dan, sifat pasang surut ini digerakkan oleh kondisi keuangan unit-unit ekonomi (perusahaan, bank, lembaga sekuritas, dan sebagainya).
Ada 3 tipe utama, perilaku para agen ekonomi. Pertama, Hedge, ketika perusahaan bisa melunasi seluruh kewajibannya dari hasil operasional usahanya. Kedua, Speculative, terjadi kalau untuk melunasi kewajibannya perusahaan harus utang dulu, mengingat hasil operasinya tidak cukup untuk menutup utang. Ketiga, Ponzi, yaitu manakala untuk menutup kewajibannya perusahaan harus menjual seluruh asetnya terlebih dahulu (likuidasi).
Sistem finansial modern memungkinkan para pelaku ekonomi bersikap spekulatif dan karena itu dengan sangat mudah berubah menjadi ponzi. Apa yang terjadi pada Lehman dan perusahaan finansial lainnya persis sama dengan apa yang dikemukakan oleh Minsky. Seandainya mereka berhati-hati (hedge), maka tidak akan terjadi kekacauan seperti ini. Akan tetapi, karena hampir semua perusahaan bersifat spekulatif, maka dengan mudah bisa berubah menjadi ponzi. Dan, pada titik ini, pemerintah harus turun tangan menyelamatkan mereka.
Jadi, tidak berlebihan jika dikatakan kalau mereka untung hasilnya ”diprivatisasi” (dimiliki privat), tetapi jika rugi, bebannya dibagikan kepada pihak lain (sosialisasi). Hal yang sama sebenarnya terjadi pada kasus Bantuan Likuiditas Bank Indonesia (BLBI).
Krisis justru disebabkan oleh ulah para pelaku usaha yang tidak berhati-hati melakukan kebijakan keuangan. Tetapi ketika kondisi keuangan mereka jebol, APBN-lah yang harus menanggungnya. Lebih parah lagi, bantuan itu pun dikorupsi. Jadi, kurang apa lagi untuk menyeret para pelaku pembobolan BLBI ke meja hijau? Kasus ini mendesak dibuka kembali.
Mungkin inilah saatnya untuk memikirkan ulang format kebijakan ekonomi, baik pada level mikro (perusahaan), nasional, maupun global. Mungkinkah sistem yang mengandalkan fundamentalisme pasar seperti terjadi selama ini tidak akan bertahan lagi? Inikah saatnya kembali menata arsitektur baru sistem finansial global, di mana pola intervensi negara menjadi salah satu tulang punggungnya?
Banyak pengamat mulai mengatakan, rentetan krisis belakangan ini telah membawa kita kembali para era-Keynesianism. Dan, Minsky adalah seorang post-keynesianist sejati. Pemikirannya memang patut dikemas kembali karena justru begitu relevan akhir-akhir ini.
A Prasetyantoko Menyelesaikan Program Doktor Ilmu Ekonomi di ENS-Lyon bekerja sama dengan ESCP-EAP, European School of Management; Pengajar di Unika Atma Jaya, Jakarta
A PRASETYANTOKO
Dapatkan artikel ini di URL:
http://entertainment.kompas.com/read/xml/2008/09/28/01125694/menemukan.akar.instabilitas.finansial
Saturday, September 20, 2008
KAPITALISME: AMERIKA DAN CINA
I.Wibowo
Mulai tanggal 15 September 2008 hingga seminggu kemudian seluruh dunia gemetar menyaksikan runtuhnya Lehman Brohters, disusul Merill Lynch, diikuti oleh AIG, dan dikhawatirkan Goldman Sachs serta Morgan Stanley akan segera mengiktui. Orang di seluruh dunia menjadi cemas. Indeks pasar saham di seluruh dunia berguguran. Ada kekhawatiran dunia akan tenggelam lagi dalam krisis seperti “Depresi Besar” pada tahun 1929!
Pemerintah Amerika mula-mula bersikap sesuai dengan textbook, yaitu tidak ambil tindakan. Maka Lehman Brothers Co. yang sudah berumur 198 tahun itu bertekuk lutut, sementara Merill Lynch dilego kepada Bank of America. Pemerintah Amerika percaya bahwa dengan ini pasar akan mengadakan self-correction. Ternyata keadaannya makin memburuk. Giliran AIG, perusahaan asuransi terbesar, menyatakan akan menyerah kalah. Pada titik inilah Pemerintah Amerika turun tangan, dan menyelamatkan AIG dengan menyuntikkan dana sebesar US$ 79 milyar. Pemerintah berpendapat bahwa tindakan menyelamatkan AIG adalah demi kepentingan rakyat Amerika yang menggantungkan pensiun mereka, tetapi juga demi menghentikan kepanikan di seluruh mengingat begitu besarnya usaha AIG. Tapi persis seminggu kemudian President Bush mengumumkan bahwa Pemerintah Federal akan mengambil inisiatif, dengan memakai uang pembayar pajak, untuk menyelamatkan bank-bank yang terancam gulung terikat. Besar bantuan itu US$ 700 milyar, malah bisa mencapai US$ 1 trilyun.
Dengan ini berakhirlah “pasar bebas” di Amerika. Pasar bebas ternyata harus diintervensi oleh negara agar bisa berfungsi secara normal lagi. Hal ini tentu saja segera mengingatkan peristiwa Depresi Besar ketika Presiden Roosevelt juga mengambil langkah untuk mengambil tindakan untuk menyelamatkan ekonomi yang sudah ambruk. Maka tidak heran bahwa orang mulai berbisik-bisik bahwa John Maynard Keynes telah bangkit dari kubur, begitu pula Keynesianisme. Padahal pada bulan Oktober yang akan datang akan diresmikan Milton Friedman Institute di Universitas Chicago, tempat untuk menebarkan dan membiakkan gagasan pasar bebas!
Cina juga
Pada saat yang bersamaan juga terjadi “market failure” di Cina. Pada tanggal 9 September 2008 tersiar berita bahwa susu buatan Pabrik Susu “Sanlu” tercemar dengan zat yang amat beracun dan berbahaya. Selang bebarapa hari diketahi bahwa susu yang telah dikonsumsi oleh bayi-bayi di seluruh Cina itu benar-benar telah menimbulkan malapetaka. Sekurang-kurangnya tiga bayi sudah tewas, dan sekian puluh yang mengalami gagal ginjal, dan sekian ribu yang mengalami aneka sakit sehubungan dengan pencernaan. Setelah diperiksa lebih lanjut, ternyata bukan hanya satu perusahaan saja yang menghasilkan susu yang tercemar. Ada sekurang-kurangnya 22 perusahaan lain yang melakukan tindakan tak bermoral itu.
Pemerintah Cina juga mula-mula bertindak dengan memecat kepala perusahaan, lalu juga bupati tempat produksi susu itu. Ketika ternyata kasusnya telah merembet lebih luas, Pemerintah Cina mengambil serangkaian tindakan untuk memeriksa semua pabrik susu di Cina. Tetapi terlambat sebab susu dengan aneka merk yang tercemar telah dikonsumsi oleh bayi-bayi di Cina, bahkan mungkin oleh bayi-bayi di Hong Kong, mungkin oleh bayi-bayi di luar negeri. Sampai kini Pemerintah Cina masih mencari cara yang tepat untuk mengatasi “krisis susu” ini, sebab tanpa tindakan yang meyakinkan dikhawatirkan bukan hanya usaha susu buatan Cina yang akan runtuh, tetapi juga seluruh usaha makanan jadi. Kalau ini terjadi, memang ekspor makanan jadi Cina juga terpengaruh, mungkin sekali tidak akan laku di seluruh dunia.
Self-regulating market?
Dalam dua kasus ini – krisis finansial dan krisis susu – nampak jelas bahwa pasar tidak bisa mengatur dirinya sendiri (self-regulating). Pasar keuangan di Amerika Serikat sebenarnya sudah pernah dikerangkeng oleh Presiden Roosevelt segera sesudah terjadinya Depresi Besar, tetapi oleh Presiden Clinton dilepaskan lagi. Dalam jaman globalisasi seperti saat ini liberalisasi pasar keuangan memang sangat diinginkan oleh para pengusaha dan spekulan, tetapi orang tahu bahwa situasi ini penuh risiko. Pasar tidak bisa mengatur diri sendiri, apalagi mengendalikan diri sendiri. Siapa yang bisa (dan berani) mengatur para spekulan dan fund managers?
Di Cina, situasi pasar bebas juga menghasilkan kekacauan. Para pelaku pasar (pengusaha) dengan tenang mencampurkan bahan kimia yang terlarang dalam susu untuk mengeruk keuntungan besar. Hal ini bahkan dilakukan oleh perusahaan yang ber-joint venture dengan perusahaan multinasional dari Selandia Baru. Sama dengan di Amerika, keuntungan jangka pendek menuntun pengusaha-pengusaha itu untuk mengeruk keuntungan, tidak peduli pada bahaya kematian yang ditimbulkan. Pasar di Cina, sama dengan di Amerika, tidak mampu mengatur, apalagi mengendalikan kualitas susu. Perusahaan akan bertindak setelah terjadi kecelakaan bahkan malapetaka besar. Pada saat itu negara mengadakan intervensi, tapi sudah terlambat. Korban sudah terlanjur berjatuhan.
Negara datang lagi
Kapitalisme di Amerika dan di Cina mengandalkan pasar bebas dan peran pengusaha swasta. Tidak ada tempat bagi negara. Kalau toh ada peran negara, ia tidak boleh masuk, apalagi mengintervensi. Para ekonom neo-liberal tetap mempertahankan ajaran ini seolah-olah sebuah dogma. Kalau terjadi sesuatu yang salah atau kacau, mereka langsung mengatakan bahwa itu karena kesalahan oknum. John McCain ada di garis pemikiran ini ketika dia mengatakan seandainya dia presiden dia akan memecat Chirstopher Fox, penanggung jawab pasar saham. Ini pula yang dilakukan di Cina, dengan memecati para pejabat yang dikatakan “bertanggung-jawab.” Mereka lupa bahwa orang ini adalah bagian dari sebuah sistem besar yang sering disebut “mekanisme pasar” itu.
Pasar bebas kini telah terkubur hidup-hidup, bahkan di tempat yang disebut-sebut sebagai “sarang kapitalisme.” Ketika pasar sekarat, tanpa malu-malu, mereka minta tolong kepada negara. Negara pun datang lagi seraya mengayunkan langkah besarnya. Betapapun Presiden Bush mencoba beretorika, yang dilakukan adalah tindakan penyelamatan oleh negara. Hu Jintao dengan ucapan yang implisit, juga melabrak bawahan-bawahannya supaya mereka tidak berpangku tangan.
Mulai tanggal 15 September 2008 hingga seminggu kemudian seluruh dunia gemetar menyaksikan runtuhnya Lehman Brohters, disusul Merill Lynch, diikuti oleh AIG, dan dikhawatirkan Goldman Sachs serta Morgan Stanley akan segera mengiktui. Orang di seluruh dunia menjadi cemas. Indeks pasar saham di seluruh dunia berguguran. Ada kekhawatiran dunia akan tenggelam lagi dalam krisis seperti “Depresi Besar” pada tahun 1929!
Pemerintah Amerika mula-mula bersikap sesuai dengan textbook, yaitu tidak ambil tindakan. Maka Lehman Brothers Co. yang sudah berumur 198 tahun itu bertekuk lutut, sementara Merill Lynch dilego kepada Bank of America. Pemerintah Amerika percaya bahwa dengan ini pasar akan mengadakan self-correction. Ternyata keadaannya makin memburuk. Giliran AIG, perusahaan asuransi terbesar, menyatakan akan menyerah kalah. Pada titik inilah Pemerintah Amerika turun tangan, dan menyelamatkan AIG dengan menyuntikkan dana sebesar US$ 79 milyar. Pemerintah berpendapat bahwa tindakan menyelamatkan AIG adalah demi kepentingan rakyat Amerika yang menggantungkan pensiun mereka, tetapi juga demi menghentikan kepanikan di seluruh mengingat begitu besarnya usaha AIG. Tapi persis seminggu kemudian President Bush mengumumkan bahwa Pemerintah Federal akan mengambil inisiatif, dengan memakai uang pembayar pajak, untuk menyelamatkan bank-bank yang terancam gulung terikat. Besar bantuan itu US$ 700 milyar, malah bisa mencapai US$ 1 trilyun.
Dengan ini berakhirlah “pasar bebas” di Amerika. Pasar bebas ternyata harus diintervensi oleh negara agar bisa berfungsi secara normal lagi. Hal ini tentu saja segera mengingatkan peristiwa Depresi Besar ketika Presiden Roosevelt juga mengambil langkah untuk mengambil tindakan untuk menyelamatkan ekonomi yang sudah ambruk. Maka tidak heran bahwa orang mulai berbisik-bisik bahwa John Maynard Keynes telah bangkit dari kubur, begitu pula Keynesianisme. Padahal pada bulan Oktober yang akan datang akan diresmikan Milton Friedman Institute di Universitas Chicago, tempat untuk menebarkan dan membiakkan gagasan pasar bebas!
Cina juga
Pada saat yang bersamaan juga terjadi “market failure” di Cina. Pada tanggal 9 September 2008 tersiar berita bahwa susu buatan Pabrik Susu “Sanlu” tercemar dengan zat yang amat beracun dan berbahaya. Selang bebarapa hari diketahi bahwa susu yang telah dikonsumsi oleh bayi-bayi di seluruh Cina itu benar-benar telah menimbulkan malapetaka. Sekurang-kurangnya tiga bayi sudah tewas, dan sekian puluh yang mengalami gagal ginjal, dan sekian ribu yang mengalami aneka sakit sehubungan dengan pencernaan. Setelah diperiksa lebih lanjut, ternyata bukan hanya satu perusahaan saja yang menghasilkan susu yang tercemar. Ada sekurang-kurangnya 22 perusahaan lain yang melakukan tindakan tak bermoral itu.
Pemerintah Cina juga mula-mula bertindak dengan memecat kepala perusahaan, lalu juga bupati tempat produksi susu itu. Ketika ternyata kasusnya telah merembet lebih luas, Pemerintah Cina mengambil serangkaian tindakan untuk memeriksa semua pabrik susu di Cina. Tetapi terlambat sebab susu dengan aneka merk yang tercemar telah dikonsumsi oleh bayi-bayi di Cina, bahkan mungkin oleh bayi-bayi di Hong Kong, mungkin oleh bayi-bayi di luar negeri. Sampai kini Pemerintah Cina masih mencari cara yang tepat untuk mengatasi “krisis susu” ini, sebab tanpa tindakan yang meyakinkan dikhawatirkan bukan hanya usaha susu buatan Cina yang akan runtuh, tetapi juga seluruh usaha makanan jadi. Kalau ini terjadi, memang ekspor makanan jadi Cina juga terpengaruh, mungkin sekali tidak akan laku di seluruh dunia.
Self-regulating market?
Dalam dua kasus ini – krisis finansial dan krisis susu – nampak jelas bahwa pasar tidak bisa mengatur dirinya sendiri (self-regulating). Pasar keuangan di Amerika Serikat sebenarnya sudah pernah dikerangkeng oleh Presiden Roosevelt segera sesudah terjadinya Depresi Besar, tetapi oleh Presiden Clinton dilepaskan lagi. Dalam jaman globalisasi seperti saat ini liberalisasi pasar keuangan memang sangat diinginkan oleh para pengusaha dan spekulan, tetapi orang tahu bahwa situasi ini penuh risiko. Pasar tidak bisa mengatur diri sendiri, apalagi mengendalikan diri sendiri. Siapa yang bisa (dan berani) mengatur para spekulan dan fund managers?
Di Cina, situasi pasar bebas juga menghasilkan kekacauan. Para pelaku pasar (pengusaha) dengan tenang mencampurkan bahan kimia yang terlarang dalam susu untuk mengeruk keuntungan besar. Hal ini bahkan dilakukan oleh perusahaan yang ber-joint venture dengan perusahaan multinasional dari Selandia Baru. Sama dengan di Amerika, keuntungan jangka pendek menuntun pengusaha-pengusaha itu untuk mengeruk keuntungan, tidak peduli pada bahaya kematian yang ditimbulkan. Pasar di Cina, sama dengan di Amerika, tidak mampu mengatur, apalagi mengendalikan kualitas susu. Perusahaan akan bertindak setelah terjadi kecelakaan bahkan malapetaka besar. Pada saat itu negara mengadakan intervensi, tapi sudah terlambat. Korban sudah terlanjur berjatuhan.
Negara datang lagi
Kapitalisme di Amerika dan di Cina mengandalkan pasar bebas dan peran pengusaha swasta. Tidak ada tempat bagi negara. Kalau toh ada peran negara, ia tidak boleh masuk, apalagi mengintervensi. Para ekonom neo-liberal tetap mempertahankan ajaran ini seolah-olah sebuah dogma. Kalau terjadi sesuatu yang salah atau kacau, mereka langsung mengatakan bahwa itu karena kesalahan oknum. John McCain ada di garis pemikiran ini ketika dia mengatakan seandainya dia presiden dia akan memecat Chirstopher Fox, penanggung jawab pasar saham. Ini pula yang dilakukan di Cina, dengan memecati para pejabat yang dikatakan “bertanggung-jawab.” Mereka lupa bahwa orang ini adalah bagian dari sebuah sistem besar yang sering disebut “mekanisme pasar” itu.
Pasar bebas kini telah terkubur hidup-hidup, bahkan di tempat yang disebut-sebut sebagai “sarang kapitalisme.” Ketika pasar sekarat, tanpa malu-malu, mereka minta tolong kepada negara. Negara pun datang lagi seraya mengayunkan langkah besarnya. Betapapun Presiden Bush mencoba beretorika, yang dilakukan adalah tindakan penyelamatan oleh negara. Hu Jintao dengan ucapan yang implisit, juga melabrak bawahan-bawahannya supaya mereka tidak berpangku tangan.
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