Japan's new prime minister Yasuo Fukuda vowed to pursue economic reforms "in order to create a more mature society," and with it are "sweeping" changes in the tax system, including a posssible rise in the country's consumption tax.
With foreign firms itching for a slice of its huge market, China has opened its gate but not wide enough. Overseas companies will only be allowed to own stakes in publicly traded brokerages and still subject to a 20% cap, effectively preventing foreign investors from taking control. Foreign firms are not licensed to set up their own brokerages in China.
Morgan Stanley reveled that it will cut 600 jobs in its global mortgage business, saying that it will reduce the size of its business to a " level appropriate to the existing market."
The US subprime contagion hits the Spanish shore with Valencia's property developer Llanera declaring insolvency after failing to meet payments on €748m of debt. Almost 800,000 homes were built in Spain last year, 300,000 of which remain unsold.
The wave of optimism in recent days could prove fleeting as some economists warn that a large number of adjustable rate mortgages (ARMs) will soon be resetting, which could trigger yet another round of foreclosures, which in turn, could set off another bout of market tremors.
Asian stocks are on the rise this morning. Citigroup offered to buy the rest of Nikko Cordial it doesn't own while Nomura Holdings and Westpac Banking Corp agreed to provide funding and buy Rams Home Loans Group's branch network.
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