World Markets End Rough Week on Down Note

By Tom Rivers

London
20 February 2009

World markets were all off sharply at the end of the week after a drop on Wall Street Thursday that saw the Dow index hit a six-year low. Grim corporate news in Asia and Europe kept the negative pressure on. In Sweden, carmaker Saab has filed for bankruptcy protection and is hoping to spin off from its U.S. parent company, General Motors.

The overseas markets keep probing new depths and that is a clear sign that investors do not see a quick end to this deep global downturn despite unprecedented government intervention efforts so far, around the world.

In export-driven Asia, more bad news. In Thailand, January exports showed a 26.5 percent drop. That is the steepest fall in a dozen years.

The Tokyo index lost nearly two percent Friday while Hong Kong dropped 2.5 percent.

In Europe, the Swedish automaker Saab, which is owned by General Motors, has gone to court and filed for bankruptcy protection. Saab is seeking to create a fully independent business.

A similar move may be made by the GM-owned German carmaker Opel in the coming days.

Here in Britain, new figures show that car sales for January were down 58 percent compared to a year ago.

Under that backdrop, more layoffs in the British industry seem inevitable, but union chief Tony Woodley says trying to keep workers on the payroll makes good economic sense in the long term.

"Is it sensible to sack people and put them on the dole costing the taxpayer tens of billions of pounds when we can spend the same or less to keep them in employment, in training and keep them ready in skilled jobs that will disappear forever if they go, ready for when the upturn in the market takes place? Everybody knows in our industry that it will take some time to get back to the level of sales of 2007 but the market will pick up. We have efficient plants, productive plants and good workers," said Woodley.

Britain's PM Gordon Brown (file photo)

Meanwhile, new figures show that home foreclosures in Britain shot up by 54 percent last year. Prime Minister Gordon Brown says his government is listening.

"We are determined that this will not become as high a feature as it has been in previous downturns in the country and so the measures we are putting in place are coming in and I believe that we are able to see an impact on the rate of repossession," he said.

According to the Council of Mortgage Lenders, home repossessions are predicted to nearly double this year in Britain, to around 75,000.