SHARES slumped on Bursa Malaysia yesterday on heavy selling pressure as other markets around the world retreated amid fears of a US recession and global economic slowdown.

The benchmark Kuala Lumpur Composite Index (KLCI) dropped sharply for the third time in as many trading days, dashing hopes that the domestic equity market would be able to decouple from broader markets in the US, Europe and Asia.

“Before the new year, there were thoughts that the market could decouple from the US; it hasn’t turned out to be true,” said Gerald Ambrose from Aberdeen Asset Management.

> This is reported at Business Times Online today. <

So what are we looking for in the near future based on this economic scenario?

Signs that the U.S. is facing a hard landing from a serious housing industry crisis multiplied Wednesday as forecasters at a prominent bank said that the world’s largest economy was in or near a recession.

“Recession has now arrived or will very shortly,” Jan Hatzius, the chief U.S. economist for the investment bank Goldman Sachs, wrote in a report Wednesday. Goldman is forecasting a “mild” recession contraction lasting two to three quarters.

Some people when I asked, just do not want to admit that the U.S. will be in recession. Come on let’s wake up..do you need an alarm! This is the alarm.

Sentiment has grown markedly in the last month that the U.S. economy is in more serious trouble than previously thought. These fears have taken on new significance politically as presidential candidates on the campaign trail hear voters express mounting concern about the health of the economy. All presidential candidates talk about this health of the economy issue.

Intel fuels recession fear

Are we really prepared for the worst? Or are we just playing wait and see game?

Get more infos from World Economic Forum, Davos, the meeting of political and business leaders aims to create the foremost global partnership of business, political, intellectual and other leaders of the world. This year meeting is held on 23-27 January, Davos, Switzerland.

Technorati Tags: , , , , , , , , , ,

Popularity: 17% [?]