This came in a few minutes ago...
2010 Bloomberg News
May 7 (Bloomberg) -- Australia's central bank warned that an escalation of Europe's debt woes may cause a "sharp" global economic slowdown and the Bank of Japan mounted the biggest one- day injection of cash since 2008 as stocks tumbled worldwide.
"The fiscal problems in Europe could intensify, prompting a retreat from risk-taking by investors and a sharp slowing in the world economy," the Reserve Bank of Australia said in a quarterly economic report released in Sydney today. Japan's central bank said it will pump 2 trillion yen ($22 billion) of funds into the financial system through repurchase operations.
Policy makers across Asia stressed that their economies are likely to be unscathed for now from the collapse in confidence of some European countries to repay debt. Even so, the slide in equities from Wall Street to Sao Paolo to Tokyo and Sydney heightened the attention of officials across the region as Group of Seven finance chiefs scheduled a conference call on the issue.
"We're keeping thorough eyes on its impact on the domestic market and movement of foreign investors," Choi Yoonkon, the head of the securities market team at South Korea's Financial Supervisory Service said in a telephone interview in Seoul today, referring to the slump in overseas shares.
Japan's Nikkei 225 Stock Average lost 3.7 percent as of 11:10 a.m. in Tokyo, Hong Kong's Hang Seng dropped 1.4 percent and the S&P/ASX 200 Index retreated 1.8 percent in Sydney. Asian traders came in today after the U.S. Dow Jones Industrial Average at one point overnight tumbled the most since the 1987 crash, before closing down 3.2 percent.
Assessing Response
Officials differed on their assessment of how the European Union is handling the crisis with Greece, which has faced soaring debt financing costs on concern it will fail to rein in its budget deficit.
"There's been a problem with the Greeks, and specifically Greek sovereign debt and Europe's ability to step in on Greece's behalf, and markets have judged those arrangements to be inadequate," Australian Prime Minister Kevin Rudd said in an interview with 3AW radio today from Melbourne. That has "spread a broader lack of confidence into market perceptions of a range of other economies in Europe."
By contrast, Japan's National Strategy Minister Yoshito Sengoku said Europe is handling the Greek situation appropriately. He also told reporters in Tokyo today that his government is in touch with the European Union and International Monetary Fund with regard to Greece and is watching Tokyo's financial markets closely.
Asia Resilient
Sengoku added that the Greek crisis won't have a major impact on Asia's economy. Philippine Treasurer Roberto Tan said in Manila today that "Asia will be able to lift its own market," citing the region's strong economic growth. The RBA said Australia could be affected should the global expansion weaken and undermine commodity prices.
G-7 finance ministers will hold a conference call to discuss Greece's fiscal situation, Japan's Finance Minister Naoto Kan told reporters in Tokyo today. He added that he didn't think countries will call for joint currency intervention, speaking after the euro tumbled yesterday to a 14-month low against the dollar.
The turmoil worsened yesterday when European Central Bank President Jean-Claude Trichet resisted taking any new steps to stem contagion from Greece, which won a 110 billion-euro ($139 billion) aid package from the EU and IMF. The extra yield investors demand to hold Spanish and Portuguese debt yesterday rose to the highest level since the euro's inception in 1999.
Effect on Rates
Asian central banks, which have begun withdrawing monetary stimulus adopted during the global crisis, may be forced to hold off on raising interest rates in the wake of the stock slide.
"Generally any central bank that has not started its tightening cycle by now will be unlikely to start," most likely for the rest of the year, said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. "The sovereign debt issues are creating a more general liquidity risk and the credit crunch risks that go with that."
Europe's fiscal woes are coming just weeks after the IMF boosted its forecast for the global economy. The Washington- based lender that mounted rescues of countries from Iceland to Ukraine during the crisis said last month world gross domestic product will rise 4.2 percent this year, the most since 2007.
Economists at JPMorgan Chase & Co., IHS Global Insight and Wells Fargo Securities LLC said this week that the Greek debt crisis will probably trim U.S. economic growth, prices and interest rates over the next couple of years.
--With assistance from Jacob Greber in Sydney, Mayumi Otsuma and Tatsuo Ito in Tokyo, Jungmin Hong in Seoul. Editors: Michael Heath, Michael Dwyer
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/05/06/bloomberg1376-L214KF1A74E9-10.DTL
Fri 7 May 2010 - 5:23
Oh, and sure they will admit to having done it on purpose too..... 
ok, Ok,.... I'm getting a tad carried away here... But think about it, here we all were concerned for biological / nuclear warfare, when in fact, they chose an entirely different avenue, this being the very heart of democracy itself.
.....