Obama Win Met with Urgent Call for Global Action

By Reuters -  |  Posted 2008-11-05 Email Print this article Print
 
 
 
 
 
 
 

Excitement about the election of Democrat Obama as the first black U.S. President was tempered by an awareness of the challenges he faces as the world's biggest economy labors in recession.

LONDON/NEW YORK (Reuters) - Political leaders urged U.S. President-elect Barack Obama on Wednesday to help forge a new economic order to lead the world out of its worst financial crisis since the 1930s.

Excitement about the election of Democrat Obama as the first black U.S. President was tempered by an awareness of the challenges he faces as the world's biggest economy labors in recession.

"We need to change the current crisis into a new opportunity. We need a new deal for a new world," said European Commission President Jose Manuel Barroso.

"I sincerely hope that with the leadership of President Obama, the United States of America will join forces with Europe to drive this new deal," he added.

On the morning after Obama's victory, ADP Employer Services said U.S. private employers cut a larger-than-expected 157,000 jobs in October.

That suggests the government's more comprehensive nonfarm payrolls report on Friday will show a loss of 200,000 jobs, said Joel Prakken, chairman of Macroeconomic Advisers.

Market reaction to the election was sober, with the dollar up 0.3 percent against a basket of currencies and the Dow Jones Industrial average down 1.7 percent.

In Europe, where a 50 billion euro ($64.2 billion) stimulus package dominated the news, shares were down 2 percent, but Asian stocks earlier closed at three-week highs.

Obama has also proposed a new economic stimulus package to help revive the economy, which is still staggering from a mortgage crisis that left financial institutions overleveraged, undermined confidence, froze credit markets and transformed Wall Street.

"The market has already responded to Obama. I do not see a consistent read between the bond market, the stock market and the currency markets to say this is the reaction to Obama," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

"The forces at work in the global capital markets are very big, bigger than who gets elected president of the United States. People should be prepared for a deep economic downturn in the U.S.," he said.



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