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"Asia cracks; Central banks act". This was the headline, but even that wasn't enough to keep the markets going into a nosedive. According to Michael Gordon, head of institutional investment at Fidelity INternational, "We are back to the MARKET PANIC that may well have been seen in the 1920s in the US".

According to a joint statement by the central banks, "The recent intensification of the financial crisis has augmented (supplemented/exacerbatedd/made worse) the downside risks to growth and thus has further diminished the upside risks to price stability".

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According to Peter Dixon, a Commerzbank economist in London, "Will it (injecting money) help the markets? Questionnable in the short term. Will it help the economy (i.e. long-term?) No". This is the most blunt and bleak assessment of the economic situation thus far.

According to WP Stewart Group chairman Jim Awad" this is "a happy constructive event; I think (that) the damage is baked into the cake". Translation: It will take a lot more to bring the world's economy out of this mess".

According to Beat Siegenthaler, chief emerging markets strategist at TD Securities in London, "The risk does not (go away) and there will be recessions". Some Hong Kong government economists still insist that the economy is healthy.

According to investor Marc Faber (aka "Dr. Doom"), "The slashing of interest rates will not help very much. They may cushion the decline (in the short term), but make matters worse (in the long term because some people will think that governments will always be able to help corporations that have gone "belly up").

REGIONAL MARKETS

1. Nikkei-225: lost 9% Wednesday and 23% since September 22

2. HSI: lost 21% (since September 22)

3. S&P ASX: lost 4.4% Wednesday and 12.6% since September 22

4. Korea (Kospi): lost 5.8% Wednesday and 11.8% since September 22

5. FTSE (London: lost 5.1% Wednesday and 16.6% since September 22

6. Dax (Germany): lost 5.8% Wednesday and 17.9% since September 22

7. CAC (France): lost 6.3% Wednesday and 17.2% since September 22

8. DJIA: lost 11.7% Wednesday and 15.7% since September 22

According to Alex Tang, research director at Core-Pacific Yamichi INternational, "We haven't seen this kind of free fall for a long time. It looks like the meltdown might continue for quite a while because we still see volatility in the market". Wow. Is a Chinese guy actually saying this?

According to Dominique Strass-Kahn, head of the International Monetary Fund, "The time for piecemeal solutions is over. I therefore call on policymakers to urgently address the crisis at a national level with comprehensive measures to restore confidencein the financial sector. National governments must closely coordinate these efforts to bring about a return to stability in the international financial system.

With financial markets worldwide facing growing turmoil, internationally coherent and decisive measures will be required to restore confidence in the financial system".

Implications/Analysis/Co-mments/Remarks: All the talking has been done. Now we just have to wait and see when stocks and markets recover. So far, this hasn't happened.

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Hong Kong "may" face a recession in 2009.

Citigroup cut its 2008 growth forecast from 4.2% to 3.6% for 2008 (a 0.6% decrease) and its 2009 growth forecast from 3.8% to 2.8% (a steeper decrease of 1%).

Morgan Stanley cut its growth forecast from 4.7% to 4%.

JP Morgan Chase cut its 2008 growth forecast from 4% to 3.5% (a decrease of 0.5%) and its 2009 growth forecst from 4.5% to 1.8% (the steepest and most alarming estimate yet at 2.7%).

Comparing to the University of Hong Kong's study, HKU's study found that third quarter growth slowed from 4.7% to 4% (a difference of 0.7% which is pretty close to estimates) while they previously estimated 5.3%.

Second-half growth is estimated at 2.9%.

Private consumption (2.3%) and GDP growth were the main drivers of the economy for the most recent analysis period. Private spending is expected to plummet from 7.9% of disposable to 3.1% of disposable income (a decrease of a whopping 4.8%) while spending growth is expected to slump from 2.7% to 2.4%. According to Alan Siu, executive director of HKU's Asia-Pacific Economic Cooperation Studies Center, "I don't rule out that Hong Kong will be in a recession". This is a typical Chinese analysis (i.e. the economy is really bad, but even though this man is a professor, he doesn't want to admit the truth. Hong Kong General Chamber of Commerce chief economist David O'Rears brought the point home: "We'll be lucky if we have zero percent growth next year". O'Rears is right. The stock market is slumping and has yet to hit rock bottom so we can't expect much better news in the short term so Hong Kong will be lucky if it grows at all in the final 3 months of 2008 which it must do to stave off a recession.