Flee market bloken?

Remember that whole “free market” thing?  Yeah, well, apparently that didn’t work so good, so the Japanese are going to try something else.

Japan Plans Measures to Support Stock Market, Nakagawa Says (thx Bond Girl)

Japan’s Nikkei 225 Stock Average slid 9.6 percent on Oct. 24 to within a percentage point of its lowest since 1982. The government may buy shares held by the nation’s banks, the Nikkei newspaper reported Oct. 25.

It is impossible to overstate how bad an idea this is.  When the Japanese government actually finalizes this proposal, it will almost surely cause a spike in the Nikkei.  If you own any Japanese companies, might I recommend taking that opportunity to sell them?

I wonder whether the U.S. is far behind.

Update

The G-7 is set to make an unusual announcement specifically expressing “concern” about the Yen.  Bloomberg:

“We reaffirm our shared interest in a strong and stable international financial system,” the G-7 said in a statement read by Nakagawa. “We are concerned about the recent excessive volatility in the exchange rate of the yen and its possible adverse implications for economic and financial stability.”

Nikkei and USD/JPY spiked on this news, but seem to be retreating now.

For real fun, check out the PSE (Phillipines index). Trading was halted a few hours ago when it reached -10%; it has now re-opened and is resuming its slide.

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