Wow! Amazing things happening these last few days in the financial world, with markets going nuts all over. We ordinary joes have learned a lot about how our betters run the world -- we can't switch away from a fossil fuel economy because it will be too expensive, there's no money for education, our infrastructure is falling down, health care for every American is impossibly expensive and will result in a huge government bureaucracy: but hundreds of billions will be available immediately for saving financial firms -- run now by the government -- ruined by their own criminal greed. You look at the mess on Wall Street, and you can't really blame me for being skeptical when the Establishment says its China policy is on the right track.
Here in Taiwan, after the National Stabilization Fund management committee Wednesday said that the government would not activate the National Stabilization Fund, the government overruled itself and announced that in fact it would make the $500 billion fund available to shore up the stock market.
The government decided to activate the state-owned National Stabilization Fund (國安基金) yesterday, an overnight change made ahead of the stock market opening, but it refused to reveal details of how the fund would act.
“The economic fundamentals of this country are still stable, but in view of the sharp decline in the US stock market on Sept. 17 and possible volatility in international financial markets … conditions are right for the fund to enter the stock market,” the fund’s management committee said in a statement.
The press release was issued at 10:10am, just over an hour after the TAIEX had opened down 242.82 points from its close on Wednesday, a drop of 4.19 percent. The benchmark index gained as the day progressed, ending 158.92 points down from Wednesday at 5,641.95, a drop of 2.74 percent.
Meanwhile Savior Ma's magical healing powers being temporarily stymied by the Forces of Miasmic Darkness emanating from Wall Street, he called on Vice President Vincent Siew to save Taiwan:
President Ma Ying-jeou (馬英九) yesterday assigned Vice President Vincent Siew (蕭萬長) to head an economic advisory task force charged with providing the Executive Yuan with recommendations on improving the economy.
Siew said he hoped the task force could meet soon, preferably next week, but that there were still many details to be worked out, which he hoped to finalize in the next couple of days.
Ma emphasized that the task force, which will meet bimonthly, will not be a decision-making body but a communication and consultation platform between the Presidential Office and the Executive Yuan as well as local and international experts. It would not infringe on the executive power of the Cabinet.
The stock market here has assumed an iconic status here, all out of proportion to its actual importance to the economy. In a nation where cram schools broadcast the scores of their high achievers on neon signs outside the school doors, the stock market functions more like a perpetual midterm grade that the national economy must constantly pass, than an instrument to raise capital for local firms.
Meanwhile, out in the real economy, where the rubber of infrastructure spending meets the road of high materials prices, Polaris Securities announced that it expected growth to drop to 4.1% this year. Note that this estimate was based on the assumption that government spending would account for 36% of fourth quarter growth. President Ma expects that infrastructure spending will raise GDP 0.5% this year, but don't count on it: construction companies, already in an industry-wide crisis here, are balking on bidding because of rising prices for raw materials. If Ma doesn't get his infrastructure boost, growth will probably slip below 4%.
The recent visit by typhoon Sinlaku to our shores, leaving 12 dead and wrecked buildings and bridges, has highlighted one of the Administration's most urgent problems: the appearance it gives of being deaf, dumb, diffident, dilatory, and indifferent. Ma needs to shed the Confucian scholar-emperor role, and get out there among the people, and lead.
[Taiwan]

