Reply #37: Crisis gnaws at Japan sentiment, China output

[Ghost Dog]

Mon Dec 15, 2008 6:02am EST TOKYO/LONDON Dec 15 (Reuters) - Japan reported its sharpest crash in business sentiment in three decades on Monday and industrial output in China grew at its slowest pace since 1999, the latest signs of damage done to Asian economies by the global crisis.

Asian markets rallied despite the gloomy data, buoyed by expectations that the White House would step in to prevent the collapse of the "Big Three" U.S. automakers. But gloomy forecasts from European carmakers and the fallout of an alleged Wall Street fraud held back European and U.S. stocks.

President George W. Bush told reporters aboard Air Force One on a flight from Iraq to Afghanistan on Monday that while some funds earmarked to shore up the U.S. financial industry could be diverted to save the automakers, no announcement was imminent.

"We're not quite ready to announce that yet," he said, adding that a decision would not take long.

Last week's collapse of auto bailout talks in the Senate sent world markets reeling as investors feared another ugly turn in global turmoil that began last year with the U.S subprime mortgage crisis and has now sent major economies into recession.

Investors fear a failure of any of the automakers would exacerbate a year-long recession and drag other companies under. Over the weekend carmakers, elsewhere produced dire warnings about the state of their sector.

Martin Winterkorn, CEO of Europe's biggest carmaker, Germany's Volkswagen (VOWG.F: Quote, Profile, Research, Stock Buzz), told Monday's Sueddeutsche Zeitung newspaper that its sales could fall about 10 percent next year in a global market expected to fall around 20 percent.

The joint general secretary of Britain's Unite trade union, Tony Woodley, said up to 40,000 car industry jobs could go in Britain in the next four weeks unless the government intervenes.

JAPANESE SENTIMENT DIVES Continued...

/... http://www.reuters.com/article/marketsNews/idINSP38288420081215?rpc=44&sp=true

(We're ahead of the curve, here in SMW. Won't be long now...)