Business and Finance

Crumbling home and auto sales pushed three Japanese insurers into merger talks and Koreans plan to cut spending on children’s education, signs the global economic slump is reshaping business and lifestyles around the world.

Economic reports this week are expected to produce more bleak reading, showing global manufacturers entrenched in recession as they cut production to avoid being stuck with huge, expensive inventories in sinking economies.

Consumers, investors, central bankers and politicians are hoping to see some signs of recovery next year from the worst downturn since the 1930s as governments pump over $1 trillion into their ailing economies.

This year will produce one of the biggest ever stock market falls. The U.S. S&P 500 benchmark is down 41 percent with only three trading days left in 2008. Its biggest yearly drop was in 1931 during the Great Depression when it fell 47.1 percent.

The Dow Jones Wilshire 5000 index, the broadest measure of U.S. equity performance, shows a record $7.3 trillion of stock market value has been wiped out this year as the fast-spreading global financial crisis crippled the ability of many companies to raise funds and pushed economies into recession.

The fallout has hit all sectors from banks to autos to commodities and resources. Unemployment has climbed as house prices plummet and cash-strapped consumers curtail spending, heaping more pressure on companies struggling to survive the downturn.

Three big Japanese insurance companies were the latest firms considering a merger to tackle a downturn that has hit demand for car and fire insurance in the world’s second-largest economy no teletrak payday loan.

Shares of Mitsui Sumitomo Insurance Group Holdings Inc, Aioi Insurance Co and Nissay Dowa General Insurance Co surged on Monday on hopes that a merger would increase profits and reduce competition.

The three aim to reach a basic agreement by March 2009, a company source said, which would produce the country’s largest non-life insurer.

A surging yen also provided another motivation for a merger, analysts said, because it has eroded the value of the insurers’ foreign-currency assets.

Yen strength has prompted official concern, underscored on Monday by Finance Minister Shoichi Nakagawa, who told the Financial Times that he was watching volatility in the foreign exchange market with alarm.

YEN SURGE

The yen has surged more than 18 percent against the U.S. dollar this year, slamming Japanese exporters like Toyota and Sony and triggering speculation the government may intervene to halt the currency’s rally.

“Every day I am looking at the market developments with a sense of alarm and urgency,” the paper quoted Nakagawa as saying in reference to yen volatility in an interview.

Nakagawa dismissed suggestions Japan will soon need another stimulus package, saying extra spending plans finalized this month must be implemented first, the newspaper said. 

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