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Overseas Markets Drop Despite US Presidential Change

Despite the excitement the inauguration of Barack Obama generated around the world, overseas markets continued their downward slide.

Concern over rising bank losses and their effect on the world economy overshadowed the inauguration of U.S. President Barack Obama.

In Tokyo and Hong Kong, both major indices were down two percent.

In Japan, machinery orders for November posted their steepest monthly fall since the government survey began 22 years ago.

In Europe, the same gloom persists.

Germany has revised downward its prediction its economy will shrink by 2.25 percent this year. That would be the worst performance in 60 years.

In Britain, Prime Minister Gordon Brown had to again defend his position of trying to spend his way out of this downturn and of further supporting banks with more taxpayer money in an effort to spur lending.

"I believe that the indication that President Obama has given in the last few days - that he is going to take the fiscal stimulus action that we have taken and he is going to take action in relation to the banks in the way we have done - shows that the world can work together to deal with this problem. One thing that President Obama did not say in his speech yesterday was, 'fellow Americans, let us do nothing,'" he said.

Speaking in parliament, Mr. Brown said the banking measures were temporary, but absolutely essential right now.

"When markets fail, and banks are unable to do the job for which they are intended, the only agency that can step in is the government. And if the government does not take action, no on else will. And that is the lesson that has been learned in every single country of the world and that is the lesson that President Obama said yesterday is the work that will be pursued in America," said Mr. Brown.

New British unemployment figures show a worsening job situation with nearly two million people out of work, the highest total since 1997.