The U.S. stock market is unlikely to fall very much from the current levels and opportunities have arisen, but emerging markets are still going to grow faster, Mark Mobius, lead portfolio manager at Templeton and an emerging markets specialist, told CNBC.
"There will certainly be a lot of retrenchment in the real economy, but the stock market tends to look ahead," Mobius told "Squawk Box."
"You will probably see a few more declines but we're beginning to see the bottom of this and so the opportunities are quite interesting, quite attractive," he added.
However, emerging markets have a growth rate four-to-five times bigger than that of developed ones, and they have been dragged down by what happened in the U.S. and Europe, Mobius explained, adding: "frontier markets are very cheap, emerging markets are very cheap."
The situation has reversed compared to the economic crisis of 10 years ago, when Asian countries were the debtors and Western economies had the cash, he said.
"I think the markets will rejuvenate much faster than many people realize," Mobius said.
The U.S. government plans to invest about $250 billion in possibly thousands of banks as part of a far-reaching effort to shore up the U.S. financial sector, and an announcement of the plans could come as soon as Tuesday, sources have told CNBC.
The planned equity investments are part of a U.S. Treasury, Federal Reserve and Federal Deposit Insurance Corp. program. As part of the deal, the FDIC will insure all non-interest paying bank deposits and new preferred debt issued by banks.
Treasury Secretary Henry Paulson met with top Wall Street bankers on Monday to nail down the plan for the government to buy shares in financial firms to restore confidence in rattled markets.
The evolving plan marks a quick about-face for Washington policy-makers, who until recent days had been focusing on building an apparatus to soak up bad assets from banks.
Meanwhile, the Wall Street Journal, citing people familiar with the situation, reported late Monday that the federal government plans to buy preferred equity stakes in nine top banks as part of its effort to battle the financial crisis.
The newspaper did not report how much would be invested in each institution, but said the move is designed to destigmatize government investment.
The overall push by the feds could provide faster relief to a paralyzed banking system and would put the United States more in line with Europe, where governments on Monday pledged billions of dollars to recapitalize banks or guarantee lending.
The blue chip Dow Jones industrial average soared 936 points in its biggest one-day gain ever as investors cheered the moves on both sides of the Atlantic. An announcement of a U.S. plan could come as early as Tuesday.
"There's still a cloud ... over banks, but hopefully this will be the first rays of sunshine," Wayne Abernathy, a policy expert at the American Bankers Association, said of the U.S. Treasury's latest efforts.
Shortly before the 3 p.m. EDT meeting, Goldman Sachs chief Lloyd Blankfield strolled into the U.S. Treasury building with a spiral notebook under one arm. Other Wall Street executives arrived around the same time.
U.S. Federal Reserve Chairman Ben Bernanke and New York Federal Reserve Bank President Timothy Geithner also participated.
The stepped-up effort eased investor angst that the worst financial crisis since the 1930s was going to push the economy through a deep and protracted recession. Last week, world stocks hit five-year lows as sentiment soured, with the Dow recording its worst weekly loss on record.
European Action Shuffles U.S. Plans
A Treasury official said the United States was moving forward on an action plan announced on Friday with other Group of Seven wealthy economies to "improve the availability of funding for our banks."
Britain, Germany, France, Italy and other European governments on Monday announced rescue packages totaling hundreds of billions of dollars aimed at unsticking locked-up global credit markets.
Oliver Quilla for CNBC.com
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Early this month, the U.S. Congress gave the Treasury power to buy as much as $700 billion in bad debts to help banks scrub their balance sheets and return to normal lending.
Paulson had previously opposed the idea of Washington buying a stake in banks, which is also permitted under the new law, but officials said they are now retooling the aid package to provide a direct capital injection.
"It's hard to avoid the sense that Mr. Paulson's initial response was distorted by ideology. Remember, he works for an administration whose philosophy of government can be summed up as 'private good, public bad,'" economist Paul Krugman, who won the Nobel price for economics on Monday, wrote in the New York Times.
Key Democratic lawmakers backed the plan as a needed move to quell the crisis.
This "was not the original proposal but clearly there seems to be a consensus that is essentially what is necessary," said House of Representatives Majority Leader Steny Hoyer.
"The economists advise us (that this is) the most beneficial action that can be taken in the short term to stabilize the system," the Maryland Democrat said.
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Speaking before a banking group, the head of the Treasury's $700 billion financial rescue program, Neel Kashkari, disclosed a few details about the plan officials were constructing.
"We are designing a standardized program to purchase equity in a broad array of financial institutions,'' Kashkari told a banking group.
"As with the other programs, the equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions. It will also encourage firms to raise new private capital to complement public capital,'' he added.
Icelandic Stocks Drop 77% as Trading Resumes After 3-Day Halt
By Jakob Lindstroem
Oct. 14 (Bloomberg) -- Iceland's benchmark stock index plunged 77 percent, the biggest decline on record, as trading resumed after a three-day suspension and the nationalization of the country's largest banks.
Kaupthing Bank hf, Glitnir Bank hf and Landsbanki Islands hf collapsed this month with debts equivalent to as much as 12 times the size of Iceland's economy :shock: . The three banks accounted for about 76 percent :shock: of the ICEX 15 Index's value prior to the nationalization.
The OMX Iceland 15 Index fell 2,317.23, or 77 percent, to 687.39 as of 11:48 a.m. local time. Five of the 13 other stocks in the index didn't trade, while the five that did account for about 7.1 percent of the index's value.
Trading was halted since Oct. 9 after the measure lost 30 percent in nine days as the country's financial system collapsed. Iceland's delegation started talks in Moscow today to secure an emergency loan of as much as 4 billion euros ($5.47 billion) from Russia.
The country should seek aid from the IMF and later apply for European Union membership and adopt the euro, Foreign Minister Ingibjorg Solrun Gisladottir wrote in Morgunbladid on Oct. 13.
Among the stocks that did trade today, Alfesca, a maker of salted fish products, dropped 0.85 krona, or 16 percent, to 4.6 kronur. Icelandair Group Holding hf, the country's largest carrier, retreated 0.7 krona, or 4.5 percent, to 14.8 kronur. Marel hf, an Icelandic meat processing company, added 1 krona, or 1.4 percent, to 72.7 kronur.
Paul Krugman, Princeton University professor, New York Times op-ed columnist and winner of the 2008 Nobel Prize for Economics, had been very critical of Treasury Secretary Henry Paulsons original bailout plan, saying it was distorted by ideology.
Today, however, Krugman told CNBC he thinks the new plan, which will inject $250 billion into U.S. banks, looks much better.
In the last six days this thing has come together with a plan that really does address the critical problem of inadequate capital at the banks (and) addresses the need for guarantees to calm the markets down," said Krugman. "We dont know this is going to work, I wish we were sure, but this is a much better. For the first time Im starting to feel that policy is really getting some traction on the crisis.
Krugman said the current financial crisis repudiates the financial-markets-are-always right principle.
A certain amount of public intervention, oversight andin crisispartial takeover of the financial system is something you have to do," he said. "Leaving the financial system to work things out on its own was disastrous in the 1930s and brought us to the brink of disaster again now.
This is not a case for socialism, its a case for regulation, oversight and for government-led rescues when theres an emergency," he added. "Were not going to go back to Karl Marx, but we are going to rediscover some of the things Franklin Roosevelt learned 75 years ago.
Even with the new bailout plan, Krugman thinks we're headed toward a "serious recession."
"Even before the financial markets went crazy four weeks agothere was a lot of downward momentum in the economy, and this isnt going to reverse that. This is just preventing that from getting much worse.
I think this is the right thing for the immediate financial crisis, but I would say lets have aid to state and local governments, lets have public spending, lets have some expanded unemployment benefits, partly because people need it, partly to put cash in the hands of people who are likely to spend it.
[quote="ignorant"][quote="beammy"]ผมมองว่า วิกฤตเศรษฐกิจครั้งนี้ สามารถคลี่คลายได้ภายในระยะเวลาไม่นานครับ ไม่เหมือน The Great Depression ของสหรัฐฯ เมื่อปี 1929-1930
[quote="mprandy"][quote]Icelandic Stocks Drop 77% as Trading Resumes After 3-Day Halt
By Jakob Lindstroem
Oct. 14 (Bloomberg) -- Iceland's benchmark stock index plunged 77 percent, the biggest decline on record, as trading resumed after a three-day suspension and the nationalization of the country's largest banks.
Kaupthing Bank hf, Glitnir Bank hf and Landsbanki Islands hf collapsed this month with debts equivalent to as much as 12 times the size of Iceland's economy
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