World Markets Swoon On Wall Street Woes

Stocks In Europe, Asia Take Pounding After Lehman And Merrill Go Down; AIG Fights To Survive

(CBS/AP)  World stock markets swooned again Tuesday as global financial crisis make investors worry that asset prices had yet to hit rock bottom.

At midday, Paris' benchmark CAC-40 index was down 0.5 percent to 4,150.24, Germany's DAX 30 index of blue chips was down 1.04 percent at 6,000.91 and the FTSE-100 share index was 1.3 percent lower at 5,135.90 in London.

Financial stocks across Europe took a pounding for the second day running as news of the collapse of Lehman Brothers and credit downgrades of American International Group Inc., the world's largest insurer stoked investor fears of wider financial and economic damage.

"My guess is that we haven't seen the bottom," said Tony Dolphin, director of economics and asset allocation at Henderson Global Investors in London. The markets "don't feel as panicky as yesterday," Dolphin said, but concerns remain about the crisis extending its reach from the financial sector to the wider economy.

In France, banks and insurers posted some of the steepest stock losses. Natixis lost 7.4 percent and Credit Agricole was down 4.4 percent, while BNP Paribas was 2.14 percent lower and insurer Axa dropped 1.55 percent.

The situation was similar in Germany, where Commerzbank fell 6.35 percent and Deutsche Postbank dropped 4.65 percent.

European central banks pumped billions more in short-term credit into the financial system for a second day to shore up confidence in the aftermath of Lehman Brothers Holdings Inc.'s bankruptcy in the United States.

The European Central Bank, which oversees monetary policy among the 15 countries that use the euro, launched its second one-day refinancing operation in as many days, offering up a 4.25 percent bid rate. On Monday, it added euro30 billion (US$42.5 billion) to money markets though banks had oversubscribed the offer by three times to euro90.3 billion (US$127.8 billion).

In London, the Bank of England provided another 20 billion pounds (euro25.2 billion; US$35.6 billion) in money to markets, four times the amount it pumped in on Monday.

David Buik, a market analyst with BGC Partners in London, told CBS News that the finance industry likely has some more house cleaning to do before investors decide the coast is clear.

"The economy in the U.S. or in Europe, or the U.K. simply cannot recover until such time that the banks are in a position to say they've emptied all the skeletons out of the cupboards... they've written down bad debts, they've shored up their balance sheets with fresh capital, and we're open for business as usual," said Buik. "Until that happens, you going to find a very nervous market."

Terms like 'panic' and 'turmoil' were being used by traders to describe the effects of the post Lehman Brothers shock wave as it smacked into overseas markets, reported CBS News correspondent Mark Phillips.

The collapse of the U.S. giant may have pushed all the global exchanges down, but bank stocks were punished particularly hard, said Phillips, who added that another phrase making the rounds Monday was that financial institutions were experiencing "a crisis of confidence that could be catastrophic."

The events of last few days, with Lehman Brothers' bankruptcy, Merrill Lynch & Co's sale to Bank of America Corp. and now AIG's downgrades will have two macroeconomic effects, Dolphin said. "It will extend the credit crunch, and maybe more importantly, it's another blow for business confidence," Dolphin said.

Asian stock markets plummeted Tuesday, playing catch-up with other markets around the world after a holiday Monday kept Tokyo and Hong Kong markets closed on the day Wall Street's landscape was dramatically changed.

"Today was a bloodbath," said Alex Tang, head of research at Core Pacific-Yamaichi, who noted that trading volume was its highest in months. "This was panic selling ... They are dumping shares, they just want to liquidate their positions."

To ensure liquidity, Japan's central bank on Tuesday injected of 2.5 trillion yen (US$24 billion) into money markets and issued a statement vowing to take measures to maintain stability in the country's financial markets.

Despite a flurry of last-minute negotiations over the weekend, storied New York investment bank Lehman Brothers was unable to find an investment partner to throw it a lifeline amid US$60 billion in soured real-estate holdings. Investors were further shaken by equally stunning news that Merrill Lynch, one of the world's most famous brokerages, sought to avoid a similar fate with a US$50 billion transaction to become part of Bank of America Corp.

The crisis appeared to be far from over. AIG, the world's largest insurer, was fighting for survival after downgrades from major credit rating firms, adding pressure as AIG seeks billions of dollars to strengthen its balance sheet.

On Wall Street Monday, the Dow Jones industrial average fell more than 500 points, or 4.4 percent, to 10,917.51 - its worst point drop since after the September 11, 2001, terror attacks.

U.S. stock futures were down modestly, suggesting Wall Street could fall further Tuesday.

[kaliveotin]

We put the fox in charge of the hen house. We deserve this.Americans are generally idiotic. We chose a fellow idiot to run the government, we''re even favoring another. Good luck with that.


P.S. Hows that working, for you?

[samthetvcat]

---"Mr. Obama set out his general approach to financial regulation in March, calling for regulating investment banks, mortgage brokers and hedge funds much as commercial banks are. And he would streamline the overlapping regulatory agencies and create a commission to monitor threats to the financial system and report to the White House and Congress."---

I got this from the New York Times - it SOUNDS more specific than McCain''s promise of ''greater regulation'', but it''s not because there was nothing showing up through financial institutions that would have raised a red flag, right? Alan Greenspan didn''t see anything and if he didn''t see anything wrong, why would anybody else?

Is anybody out there going to make sure these politicians'' aren''t crafting policy to win votes without doing the research to make sure it would prevent the problems we now have?

Regulations won''t prevent a bubble from bursting if it was only being fueled in the first place because it was the only game in town due to us not holding our own in the global economy . . .

[samthetvcat]

The dilemma was that they wanted to keep interest rates low to avoid putting the economy into a recession, wasn''t it?

Were predatory lenders the sole reason for the credit crisis or was it the bubble and the decision to go with variable mortgage rates?

Would the Feds have really acted any differently this time around? Or would we have been stuck with the worst of both worlds - a recession and also a housing bubble (which would later burst)?

[oneworldusa]

Good. Asian Markets lose too, because of the greed of corporate wealth in America, taking advantage of their cheap labor, basically nailing everybody to the wall. The message is getting around.

Also, anyone who voted for Bush and insists on voting for McCain, gets whats coming to them. I didn''t put Bush in office either time, and I won''t be voting Repub once again.

In addition, anyone who votes Repub for Palin simply because she is a woman, and especially those who are hoping to replace Hillary with her are shallow and simple. She and Hillary are opposites. If you want Hillary, write her in.

[samthetvcat]

---"In addition, anyone who votes Repub for Palin simply because she is a woman, and especially those who are hoping to replace Hillary with her are shallow and simple. She and Hillary are opposites. If you want Hillary, write her in."---
Posted by OneWorldUSA

Those who CAN do, those who CAN''T are just fixin'' to get what they can out of the system and they''ll trash anybody and anything who stands in their way.

Who ever said poor people can''t be just as greedy and selfish as the rich . . .

[samthetvcat]

People are animals ST, people are animals . . .

[oneworldusa]

HSBC is a joke. It definitely needs to be one of the next to go. America, the big dogs are hearing us! Finally! But don''t let that sink in too soon. Let them feel it for a while.

[oneworldusa]

Posted by SamTheTVCat at 04:24 AM : Sep 16, 2008

-I''m afraid I''m not understanding your post in relation to mine.

[samthetvcat]

---"I''m afraid I''m not understanding your post in relation to mine."---
Posted by OneWorldUSA

I''m sorry, are you talking to me?

[samthetvcat]

---"Indeed. But with compassion and foresight my friend. And with much more in common than in difference.ST"---
Posted by Humanavance

I''m smart, but I''m not old enough to have wisdom just yet . . . that''s good stuff! Very calming :)

[oneworldusa]

Posted by SamTheTVCat at 04:32 AM : Sep 16, 2008

-Yes I was.

[jmurrieta11]

Who ever said poor people can''''t be just as greedy and selfish as the rich . . .


--------------------------------------------------------------------------------

Posted by SamTheTVCat



Nobody, but they haven''t had the President of the United States and the entire Republican party working for them on the public dime the way the rich elite has.

And, Bill and Hilly are real comfortable with favoring the rich as well, in case you never noticed. The President from Microsoft and the Senator from Rajasthan have done well for their rich constituency.

[daddadah]

as long as the sun rise we as americans have seen a sunny bright star with warmth and healing strenghth.as long as we believe in our way of life that we with inarriable rights that all men and women are created equal and we believe that under god we can survive and that our for fathers fought the fight for our rights and freedom then no matter what we loose materialisstick stuff we still have each other to lean on this is our country now cut the b.s. and stand up help up or just stand on the side lines and shut up

[jab232]

We do understand, don''t we, that McCain''s adviser Phil Gramm was a major sponsor of the Gramm-Leach-Bliley Act which repealed banking and investment safeguards and made this meltdown possible? This is the same Phil Gramm who,, as a lobbyist fought against regulation of the banking industry to keep such meltdowns from happening. And even more than that, John McCain voted FOR the Gramm-Leach-Billy act. In the Senate, at least, Democrats voted overwhelmingly against the repeal. I didn''t look up the House. Chickens are coming home to roost on Republican heads.

[brianbwb-2009]

The day is coming soon when the Chinese holders of 1.5 trillion in US debt, lose their trust in the ability of the US to make good, and will then short the dollar on a market that also has lost trust. This downward pressure will force oil back up, creating de facto inflation, which will prompt the fed to print even more paper, thus continuing the downward spiral, to the point that the world will devalue the dollar to nothingness, and switch to the Euro.

Thanks to McSame''s daddy Bush, the amount of money need to correct this problem was spent in the wrong war, for the wrong reasons.

[skyk239]

We do understand, don''''t we, that McCain''''s adviser Phil Gramm was a major sponsor of the Gramm-Leach-Bliley Act which repealed banking and investment safeguards and made this meltdown possible? This is the same Phil Gramm who,, as a lobbyist fought against regulation of the banking industry to keep such meltdowns from happening. And even more than that, John McCain voted FOR the Gramm-Leach-Billy act. In the Senate, at least, Democrats voted overwhelmingly against the repeal. I didn''''t look up the House. Chickens are coming home to roost on Republican heads.

Posted by JAB232 at 07:09 AM : Sep 16, 2008

It should also be noted that Dr. Phil allowed the Banking Lobby to actually WRITE the Bill.

[omnibus66]

The US economy is very much like a person earning $300 per week, but putting $350 per week on his credit cards. You can do it for a while, but sooner or later it will catch up with you.

The question of a total economic collapse is not if, but when. Unfortunately the policies of the past 7 years have brought the when much closer.

It''s not going to be pretty.

[tpraskac]

I aint selling my home till things get better.

[whitemale08]

Republican George Bush has not only blown out the American economy with "tax cuts for the rich" but the world''s economy by pressuring the Federal Reserve to keep interest rates too low.

This clown President did this because he mistakenly thought that he would avoid looking like Jimmy Carter who had wisely raised interest to stimulate a record savings.

Now John McCain who knows nothing about the economy wishes to continue these stupid stupid "tax cuts for the rich" and keep the middle-class paying for these wars in Iraq by hyper-inflation.

[ioweign]

SARAH PALIN we need you.
you have a proven record of stepping into the mess and making sense and profits out of it....

please work your alaska magic and help fix this mess.

Posted by fenner at 08:00 AM : Sep 16, 2008

Oh yeah, put America on eBay...

We know how that eBay airplane deal worked out for ya...

[donevis-2009]

Now is the time for CBS repoters to tell us who the he11 visited the White House last night that they had to put up a 10 ft. fabric screen to conceal who came to visit last night. Why does the administration NOT want us to know who was there. Have we turned into children that are sent to our rooms when people come calling? That house belongs to us, the tax payers. They have tunnels to get people in and out, unless of course there were to many people to fit in a tunnel. That''s all we need as our economy is in free fall is more mystery of our leaders actions. We''re treated like mushrooms. "Kept in the dark and fed manure." What a great administration. "God Speed USA"

[rwassel]

Is it coincidence that the last time 3 recessions have been under a Republican watch?

[rwassel]

It''s okay that Wall Street is crashing...John McCain thinks the "fundamentals of our economy are strong" and that "we are a nation of whiners"

[thevicar1]

Whats a ''Swoon''? Is that one of those big, giant white birds that looks like a goose? I like those.

[thevicar1]

I aint selling my home till things get better --------------------------------------- Posted by tpraskac



Things are better! Daddys 401K is buying cheaper and cheaper stocks every day!!!

[thevicar1]

Is it coincidence that the last time 3 recessions have been under a Republican watch? ------------------------------------------ Posted by rwassel



Actually, before the first recession, I had a Rolex Watch, during the second one, an Omega. Now Im back to Timex...

Takes a licking, and keeps on ticking!

[antoniof123]

You people just don''t get it this is much larger than just here or financial markets.

If you are too dumb to breath the air don''t drop dead.

These are the things that cause civil unrest. When people have nothing to lose they don''t care anymore.

Dumber than dirt defending the course of action that the right wing put us on and now it is coming home to us.

[gop_will_win]

This is all Clintons fault!

[thevicar1]

TheVicar1, Whats your password? Is it bottom feeder? ------------------------------ Posted by mcliar



Are people supposed to understand that, or it that just where the drool hit your keyboard?

[gop_will_win]

You were bragging about bottom feeding in the market. If you don''''t know what the term means I can see why you need someone to manage your 401(k).


--------------------------------------------------------------------------------

Posted by mcliar
=================================
I have been short selling. Bottomfishing at this point is stupid.

[oleander8]

"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed." -- Abraham Lincoln, 1864

[thevicar1]

You were bragging about bottom feeding in the market. If you dont know what the term means I can see why you need someone to manage your 401(k)---------------------------------------- Posted by mcliar


Nope, I didnt know that term, sorry.
I aint no high-falootin financial wheeler-dealer like you guys...I just like to make jokes.
I figgur you can look at it two ways - the market goes down, and you lose a ton of money, or the market goes down, and since you keep pouring money into your 401K, you could look at it like, ''at least I am buying more shares today than I was yesterday''.

Sorry for intruding in the world of big-finance, so many special terms...I guess I DONT belong there!

Ooopsie-Doopsie

[thevicar1]

[...] until all wealth is aggregated in a few hands and the Republic is destroyed." -- Abraham Lincoln, 1864 ----------------------------------------------------------- Posted by oleander8


no wonder they shot him in the Temple!!!

[ncvoter2]

i see everybody here here has a PhD in economics

[ncvoter2]

that''s what you heard. time to take your medication

[thevicar1]

i see everybody here here has a PhD in economics ----------------------------------- Posted by ncvoter2



Yeah!!!




whats a PhD?

[thevicar1]

"We Republicans have ruined the economy, ruined the moral of the military, and have created a great devide amoung Americans. But worse of all we Republicans have done real damage to our economy. We are Republicans, vote for us." ------------------------------------------------- Posted by SHURCH4TRUTH



you made that up

[starleo146]

Posted by antoniof123 at 08:34 AM : Sep 16, 2008


Antoniof123 your words were so well said;It makes me sad that the people in this country are he*ll bent on total destruction of a great country.They turn out and cheer a woman whose foreign policy consists of,I can see Russia from my house . A Senator of 26 years who says our economy is fundamentally sound while our financial markets are fundamentally sinking into oblivion.Why are people giving these idiots a chance and not laughed of their stage is beyond me. I feel the bigots who cheer these two, rather have total destruction, than vote for a black man,I know, but it is how I feel and we will pay the price.

[ncvoter2]

i one calls another unknown person a racist, -who''s the racist?

[gop_will_win]

whats a PhD?


--------------------------------------------------------------------------------

Posted by TheVicar1
==================

[ncvoter2]

obama gets 90% of the black vote and you don''t call that racist?

[gop_will_win]

whats a PhD?


--------------------------------------------------------------------------------

Posted by TheVicar1
=================
Piled Higher and Deeper.

[ncvoter2]

PhD is doctorate degree

[thevicar1]

Obama gets 90% of the black vote and you dont call that racist? ------------------------------------------------------------------ Posted by ncvoter2



They call it ''Ethnic Pride''...only white folks can be racists.

[thevicar1]

PhD is doctorate degree ------------------------------------------------------ Posted by ncvoter2



I got a degree. Maybe I could doctor it up to a PhD, huh?

[ncvoter2]

doctor it up- just don''t get caught or you''ll be saying "good night bubba"

[pmsnbc1]

Is the 9% approval LIB congress back from vacation yet?

[ncvoter2]

it''s funny how people overextend their credit so far that they can''t pay it back, and then they blame theloan companies for their woes. that''s why the economy is in the shape it''s in now. and obama want to increase the capital gains tax and give everyone a $4 raise?

[tawpdawg111]

Myself, I think the McCain ad depicting Obama as the big black predator trying to awaken your children with seks-ed before kindergarten so he can come get them at night when in fact Barack was trying to write further PROTECTION guarantees for children from predators into Illinois law is perilous for McA-hole. Karl Rove even said as much on FAUX Newz Sunday morning.

Anyone else?

Oh, and one other thing that is perinent as your retirement nestegg rides off into the sunset without you.......I am sure most already know but, if not......the man responsible for legislation de-regulating financial firms was none other than former Senator Phil Gramm R Tx who has been McCains campaign co-chair and economic adviser. Its relative right now as DOW is in freefall and crooks scoop your money off the table. SEVEN-out, line away, pay the shorts!

[ncvoter2]

another angry black