The Twelfth Black Monday

Suddenly, I feel aghast after surfing in the cyber world this evening. The world stock market crash news is the reason. When the energy crisis and global food crisis still being unsolved problem for mostly countries in the world, they are inflicted by investment & banking crisis. Then I run into 19^th October 1987 when the same things occurred because the Dow Jones Industrial Average dropped by 508 points to 1739 (22.6%). That moment has been called as the black monday. Furthermore, at 28^th October 1929, the world was shaken by devastating of stock market in United States. That moment was called not only black monday, but also Wall Street Crash of 1929. And now, the twelfth Black Monday has come!
So, what the matter with the stock market right now? Detikfinance and Kompas said that in the monday trade (15/9/2008), the Wall Street stocks, especially from financial sector, is devastated. Dow Jones Industrial Average drops 299,22 points (2,625%) to 11.122,77 immediately after the market was opened. Meanwhile, Standard & Poor’s 500 and Nasdaq is going down at 31,40 points (2,51%) to 1.220,30 and 40,18 points (1,78%) to 2.221,09 respectively. The blue chips indexes of Straits Times from Singapore has declined 84,12 points to 2.486,55. The crash has infected the Europe stock market. FTSE Index is dropped 2,28% immediately after the market was opened. So do DAX Frankfurt and CAC Paris. They are going down at 1,55% and 2,48% respectively. Here are the movement of the world main indexes at monday collected by Bloomberg:

Why are they so devastated? The collapsed of Lehman Brothers, a 158 years old bank from United States is one of the main factor causes this crash. Lehman stock has been dropped until 94% at 2008. Fourth biggest investment bank in US sent the bankruptcy form to the United States Bankruptcy Court for the Southern District of New York at the monday. Lehman got US$ 3,9 billion losses at the third quarter of 2008 since they wrote their mortgage assets off into bad debt expenses. Lehman is one of the subprime mortgage victim. The uncollectible debts from property sector has given them some liquidity problems.

That’s about the Lehman collapse. Now, what about Indonesian Composite Index? The ‘downfall’ of Jakarta Composite Index (JKSE) is the undebatable negative signal for Indonesia economic . Opened at 1,787.215, JKSE drop to 1,719.25. It’s the lowest position since November 2006! Furthermore, Rupiah have been influenced by the stock crash. In the monday trade, rupiah declined 20 points to 9.445 per US $. She crude oil movement at last days has affected the JKSE to go down. Beside that, the national holiday at Japan and South Korea at monday has made Rupiah anda JKSE more volatile. Here are the closing data of JKSE at monday, 15^th September 2008:

It will be interesting to see what Indonesian government will do for solving the problem. The stock market crash can influence the power of Rupiah. The government policy to confirm the amount of interest rate is the most critical issue for the Indonesian economic future. If they make some blunders again like Supertoy or Tangguh, we gotta pray and forswearing to the God since the judgement day is really getting closer.

Finally, “Happy Black Monday, Everybody”.

Salam,

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News and data taken from Wall Street Journal, Kompas, Detikfinance, & Bloomberg
The Jakarta Composite Index data was taken from Yahoo Finance
The World Indexes data was taken from Bloomberg
Data was ran on 16^th September 2008 at 02:15 WIB (GMT+7)