Stock Surge Sweeps Asia

Asian markets opened with a strong surge and never looked back on Monday after South Korea unveiled an $11 billion stimulus plan designed to keep the country "from sliding into recession," the Associated Press reports. In response, stock markets in Seoul, Hong Kong, Australia, and Shanghai were all trading up. In Europe, the major indices in Paris, London, and Frankfurt all opened higher, too, MarketWatch reports. There is much speculation that the European Central Bank will follow the Fed's lead and cut interest rates by 0.5 percent later this week, according to Reuters.

As the Wall Street Journal points out, the Korean government had been discussing a stimulus package for the past two weeks as conditions in the credit markets worsened; the country's banks were largely unaffected by the U.S. subprime market. But some ominous signs persist in Asia's fastest-growing economy, as it emerged on Monday that China's manufacturing slowdown is worse than first thought. Orders from overseas customers have dropped for the last three months, and October saw a sharp decline, according to a closely watched survey of the sector's business outlook by Chinese manufacturers, MarketWatch writes. Despite the slowdown, British Prime Minister Gordon Brown over the weekend urged China and oil-rich Middle Eastern countries to increase funding commitments to the IMF's international bailout fund, the New York Times reports. The IMF has at least $200 billion at its disposal, but its reserves have been seriously depleted after it sent aid to Iceland, Hungary, and Ukraine in recent weeks and last week pledged an additional $100 billion for developing countries.

Back stateside now, and the Detroit press is already drafting the business obit of General Motors' Rick Wagoner. According to the Detroit Free Press, the GM CEO is in a game of beat-the-clock. He needs to raise billions in cash or the creditors will probably swoop in and give him the boot, the newspaper concludes. This dire picture comes after it emerged, this weekend, that the troubled car maker's big hope—a $10 billion handout from the U.S. Treasury—has been rejected out of hand. According to the NYT, "Treasury officials were said to be reluctant to broaden the $700 billion financial rescue program to include industrial companies or to play a part in a G.M.-Chrysler merger that could cost tens of thousands of jobs." Wagoner's troubles don't end there. The WSJ reports today that the United Auto Workers union has hired former Wagoner confidant Stephen Girsky to offer hardball negotiations should the proposed merger with Chrysler move into advanced stages.

Slightly better news from the micro-electric-car market. Tesla Motors, the nation's leading electric-car company, has secured $40 million in new debt financing, based on commitments from almost all current major investors, MarketWatch reports. The funding will be used mainly to increase manufacturing of the Tesla Roadster, the high-performance vehicle owned by just 50 people but with waiting orders of 1,200. Orders may accelerate after Election Day. Barack Obama says he would help put 1 million electric cars on the roads and provide a $7,000 tax credit to new buyers, CNN reports. John McCain, meanwhile, has offered a $5,000 credit to those who buy an electric vehicle.

More than 1,800 publicly held financial institutions may tap the Troubled Asset Relief Program over the next few weeks in a rush to safe ground as the government's $700 billion bailout effects a profound reshaping of the banking sector. Even secure banks now see the need to get government help. "Institutions across the U.S. worry that if they don't try for the money, the market will judge them as too unhealthy to qualify, or lacking the savvy to deploy cheap government capital on acquisitions and investments," writes the WSJ. China is turning on the financial spigot in another way. Its central bank has lifted the cap on the amount in loans that commercial banks can make, essentially trying to prime pump the economy by enabling more private investment. The caps had been set to prevent China's economy from "overheating at a time when growth was still running relatively high," writes another WSJ story.

And finally, a moment of sympathy for the banking trade press. In a year when Wall Street vanished and retail banks are lining up cap-in-hand for state aid, it hardly seems like the time to hand out awards for the year's best banker. But that's not stopping American Banker, which unveiled its "Banker of the Year" award last week. As the NYT quips, "It’s like being named the outstanding British soldier of 1776."