The sharp fall was "attributed the sharp fall to selling by major foreign investors":
Unchecked, this financial crisis could mean political instability for Indonesia, and simmering ethnic tensions could once again boil over as they did in 1997.
"What is happening is panic selling to an extent that it is irrational," said Irvin Patmadiwiria, the head of investments at PT Lautan Dana Investment Management.
He said roughly 70 percent of stocks traded in Jakarta are owned by foreign investors, who are cashing out holdings to create liquidity.
Among the most active sellers were Merrill Lynch, United Overseas Bank, McGuire and JP Morgan, he said. They were dumping blue chip telecommunication, banking, and manufacturing shares.
Back when I took these photos in Jakarta on May Day 2008 (post), a number of Indonesians I spoke to at the rally were blaming the Americans for unwelcome economic policies. The Indonesian government had passed a law that made it easier for firms to retain workers as part-time contractors -- for up to two years. This policy may have made Indonesia more "competitive," but it left Indonesian workers feeling insecure.
Mark my words: the USA is not going to be particularly well-regarded in Asia by the time this financial crisis is through. The wounds from the 1997 crisis and the IMF intervention have barely healed.