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Out of Our Minds
Wednesday, January 18, 2006 11:18 AM
What's Making Me Nervous
Kevin Salwen on Business

In this increasingly global economy, I get worried when major shocks hit major partners. If you're not paying attention to the Tokyo Stock Exchange today, you should be. The exchange was shuttered early amid panic selling triggered by individual investors and the exchange's computers becoming overwhelmed by too many orders (mostly sales). Stocks closed down nearly 3% for the day, after having dropped about the same amount on Tuesday. (Put in Dow Jones Industrial Average terms, that would be about 650 points in two days.)

If you're regular readers of this column, you know I'm not a cry wolf kind of fellow. And I'm not saying this is the end of the world, especially since the trigger is the investigation of fraud at a single company (Livedoor, an Internet company). But in this interconnected economy, it's definitely worth your attention.


Kevin - 1/19/2006 11:03:43 AM
Here's an update. The Tokyo market rebounded today in a session shortened by pressures on the computer system (but pre-announced to be shortened). You can read more here: http://www.iht.com/articles/2006/01/19/business/tokyo.php

The exchange seems to be reacting well, adding trading capacity by year-end. All in all, it looks like there's a bullet dodged, but as someone who helped The Wall Street Journal cover the 1987 stock-market crash, I think it's worth keeping an eye on this.
Harold - 1/18/2006 5:18:04 PM
Kev -

What's more remarkable is Livedoor lost $1.8 billion in value in 48 hours. I suspect it will loose about another $1bn when trading reopens. The Times (yours not mine) informs us that Mr. Horie, Livedoor's CEO, has 'bristled hair'' and 'wears T-shirts to press conferences'. Staggering journalism. Perhaps tomorrow we'll learn if he's a y-fronts man or prefers going native.

Thanks for the tip to pay attention to the TSE. They're sleeping right now. It's quiet. Lights are still on, but that's Tokyo. I'll have a shufty tomorrow.

Living La Vida Harold!


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