September 25, 2008

Hong Kong Financial Virus Erupts

While Washingon and New York scramble to avoid a repeat of October '87 or even '29 on Wall Street, the Hong Kong rumour mill is in full gear and could yet trigger a massive slide.

Yesterday, rumours circulated that Bank of East Asia was failing and an old style bank run was on with photos and headlines splashed acrossed world media. Today, the South China Morning Post reported that Beijing's bank regulator (China Banking Regulatory Commission) told domestic banks to stop lending to US financial institutions, a report denied by the agency. If American politicians don't declare victory soon I expect the Hong Kong viral panic may wield its own special damage.

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