European, Asian Markets Hemorrhage

Despite Bold Move By British Government To Shore Up Confidence, Markets In Europe Follow Asia Down

(AP)  World stock markets were in retreat once more on Wednesday as concerns about the state of the global economy dominated sentiment despite a coordinated rate cut by top central banks aimed at shoring up confidence in the world's crisis-stricken financial system.

The early boost to stock markets provided by the news that banks including the U.S. Federal Reserve, Bank of England and European Central Bank, had cut their key interest rates by a half-percentage point soon dissipated amid severe stresses in lending markets.

"The coordinated interest rate cuts got the 'thumbs down' from equity markets, suggesting we have not yet turned the corner in this financial crisis," said John Higgins, senior markets economist at Capital Economics.

"Rate cuts....are all very well, but they do not get to the root of the problem. We are dealing with a crisis of solvency that is not going to disappear until banks are adequately recapitalised, the more so since further large write-downs on traditional loans lie around the corner," he added.

The FTSE 100 index of leading UK shares rose, then slid back into the red, closing 238.53, or 5.2 percent, at 4,366.69. France's CAC-40 was 235.33 points, or 6.3 percent lower at 3,496.89, while Germany's DAX was 313.01 points, or 5.9 percent weaker at 5,013.62.

The Dow Jones index of leading U.S. shares was down 163.12 points, or 1.7 percent, at 9,283.99, having been up nearly 200 points at one stage earlier in the session.

All the central banks, bar China's, cut by a half-percentage point - a bold stroke intended to send a strong message and restore confidence, as well as keep the credit crisis from further damaging the wider economy as companies struggle to borrow for everyday and long-term needs. Fearful banks are refusing to lend to one another and markets in commercial paper, or short-term unsecured company debt, have been frozen.

The Fed reduced its key rate from 2 percent to 1.5 percent, while the Bank of England cut its base lending rate by half a point to 4.5 percent, and the ECB, which last week decided to keep borrowing costs on hold, cut to 3.75 percent. Other central banks also taking part include the banks of Canada, Sweden, and Switzerland. China also cut by .27 percentage point but did not join in the group statement that accompanied the decision. The Bank of Japan backed the statement but did not cut as its rate is only 0.5 percent.

"I'm afraid sentiment and uncertainty are so adverse and great at the moment, the markets will remain in unforgiving mood," said Howard Wheeldon, senior strategist at BGC Partners.

"No one is prepared to stick their necks out," he added.

The Wednesday cuts came as markets in Asia and Europe had taken another battering and Britain stepped in with 50 billion pounds for the government to support banks by taking stakes, while Russia closed its main stock market for two days. The selling tide was so huge that the Paris stock exchange briefly suspended calculating the benchmark CAC-40 index amid a massive influx of sell orders that caused it to plummet nearly 8.2 percent at one stage.

And Moscow's MICEX stock exchange, where most of Russia's trading takes place, announced it is shutting until Friday after opening with steep losses. The MICEX index dropped more than 14 percent in the first half-hour of trading Wednesday.

The RTS exchange, whose index is widely considered the benchmark of Russia's markets, fell more than 11 percent in the first 30 minutes and suspended trading until further notice.

Stock markets in the Middle East pared losses after the rate cuts. The benchmark CASE 30 index on the Cairo and Alexandria Stock Exchange rebounded from a midmorning plunge of 11.7 percent to close down 7.09 percent.

Overnight, anxious investors sent Asian markets sharply lower with Tokyo in free-fall, with the benchmark Nikkei 225 stock average plunging 9.4 percent - its biggest drop in 21 years - to 9,203.32, a five-year low.

"No one knows the bottom of the ongoing financial crisis, and investors were really spooked by growing uncertainty over the global credit crisis," said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC Co. Ltd.

Hong Kong's blue chip Hang Seng index shed 8.2 percent. Markets in South Korea and Taiwan boh fell 5.8 percent, and Indonesia's stock market was shut down for the day after it fell more than 10 percent.

Australia's benchmark S&P/ASX200 closed down 5 percent, wiping out gains Tuesday after the country's central bank cut its key interest rate by a bigger-than-expected 1 percentage point.

[inketolstoy]

"MARTIAL LAW was declared in the House of Representatives, September 28. Have you heard this in the news? No? This is a fact on the House of Representatives website.

http://burgess.house.gov/New

s/DocumentSingle.aspx?DocumentID=10397
6
n

Brad Sherman in the house of Representatives says members of congress were threatened that "There would be martial law in America if we voted no."(on the bailout bill) Have you heard this in the nws? No?

Posted by lochlan at 12:29 PM : Oct 08, 2008"


lochlan, stop reading PRAVDA to get national news. Though I would like to see a squad of riot police with tear gas and bubber bullets to clear out congress.

[random_radar]

"MARTIAL LAW was declared in the House of Representatives, September 28. Have you heard this in the news? No? This is a fact on the House of Representatives website.

http://burgess.house.gov/New
s/DocumentSingle.aspx?DocumentID=103976
n

Brad Sherman in the house of Representatives says members of congress were threatened that "There would be martial law in America if we voted no."(on the bailout bill) Have you heard this in the nws? No?

Posted by lochlan at 12:29 PM : Oct 08, 2008"

The martial law you are referring to has to do with house of representatives rules for debating and voting on bills. It has nothing to do the the martial law using the military to rule the country that you are alluding to. Sorry to burst your bubble.

[random_radar]

When Japan collapsed a decade ago, they cut their central bank interest rate to zero. It did nothing to help them and they imploded economically.

The whole world is going the way of Japan. The Japanese economy has been in the toilet for years. You are a fool if you think things are getting better anytime soon.

[inketolstoy]

It is not a case of US takes world down or world takes US down. Globalization means one world economy. We are all tied together. And we are not going to be able to put that genie back in the bottle. Through the old economic rules away, things aren''t working that way anymore. Look at "Communist" China, "Democratic" US, they are more the same than different when it comes to the economy. Almost all governments are becoming socialist governments with capitalist economies, and that doesn''t make sense.

[tbuckl]

The World Markets Hemorrhages due to Corp America and their low life bankers full of greed. I hope the whole world holds these CEOs accountable, take them to the World Court for trail and put them in a Russian prison camp in the far far far north. These folks are nothing but an organized global criminal network and should have the RECO law applied to them.

[brianbwb-2009]

"Where is their prescription for tough love, now, when Bush asks for a taxpayer handout for Wall Street?"
Posted by alphaa010

It is still in force, look at the problems caused by trickle down corruption, and the republican''s answer is "Tough, love."

[hypnotoad72]

Seems to me that''''s the way America has acted for 8 years and is why we''''re in the mess we''''re in. Maybe if we had been thinking "global" instead of "greed" we and the world would be better off.

Posted by PVperson at 11:59 AM : Oct 08, 2008
---

A bit longer than 8 years, I would think... and the people didn''t seem to mind either.

Oh, and they are thinking ''global'' too.

Just keep looking forward and don''t let blind fear take over. It''s not easy, but blind fear is a certainty. Even a blind chance is preferable. Keep studying, learning, and finding ways to make money. We will adapt and survive. Think positive.

[lochlan-2009]

MARTIAL LAW was declared in the House of Representatives, September 28. Have you heard this in the news? No? This is a fact on the House of Representatives website.

http://burgess.house.gov/News/DocumentSingle.aspx?DocumentID=103976


Brad Sherman in the house of Representatives says members of congress were threatened that "There would be martial law in America if we voted no."(on the bailout bill) Have you heard this in the nws? No?

[antoniof123]

By the time this ride is over neo cons will have done what they always wanted destroyed the world.

The only problem is they though Jesus would come for them. They are in for one heck of a big suprise.

[pvperson]

"start looking out for number 1 ..... the rest of the world that will suffer, and who cares about them"

Seems to me that''s the way America has acted for 8 years and is why we''re in the mess we''re in. Maybe if we had been thinking "global" instead of "greed" we and the world would be better off.

[presjfk]

Obama / Biden are trying to push their far left socialistic partisan plans as MAINSTREAM when they are anything but.Posted by stevemccoy7"

its called balance, between govcernment and private business. The pendulum swung way too far to the right and the proof is all around us. Unfortunately we cannot trust business, particularly big business to do the right things or to self regulate. Again, the proof is all around us.

Obama is no socialist.

[presjfk]

Obama / Biden are trying to push their far left socialistic partisan plans as MAINSTREAM when they are anything but.Posted by stevemccoy7"

its called balance, between govcernment and private business. The pendulum swung way too far to the right and the proof is all around us. Unfortunately we cannot trust business, particularly big business to do the right things or to self regulate. Again, the proof is all around us.

Obama is no socialist.

[lloydbest1]

It appears the total global debt is greater than the entire asset base of the planet. This means no matter what is done or by whom, it is impossible to balance the books. The global economy as we understand it WILL crash.
No amount of voodoo "rescues" or "bailouts" will help; indeed this simply generates even more debt and ultimately makes the impossible even more so.
Thre is NO safe harbor. NONE. Even those who live completely "off the grid" and are wholly self sufficient and living at a subsistance level will be negatively impacted to some degree.
It is easy to blame the Bush/Cheney axis and they do deserve a large share of the opprobium, but they did not act alone. The EU has been running their own economic Ponzi scheme as long as we have ours and however much we owe the Chinese, they are so overleveraged in debt themselves with their own daytrader mentality that investors are fleeing the nation in droves. The days of double digit economic growth for China have just come to a grinding, screeching halt....
So how will all this end? That''s anybody''s guess. I know that no one man or nation can do much. Resolving this mess can not be accomplished by continuing the same policies and practises that brought it on in the first place (McCain) or by increasing taxes for the rich and uber rich (Obama).
What''s galling to me is those who never profited from the "boom" will be the ones most responsible for paying the costs of mitigating the "bust".

[antoniof123]

The bottom line is America is the cause for either a world-wide recession or depression. It was our financial, banking, and mortgage companies that were managed so ineptly that the entire world is suffering. When this is over I think it would be wise to relegate Americas influence over the world''''s economies to a lesser status.

Posted by afmca at 08:20 AM : Oct 08, 2008

I hate to tell you this but that has already happened EU is no longer listening to us that you Republicans. We own $1 trillion to China. We have pretty much pizsed off every other country in the world. So I would say the next round of talks needs to be handled with a lot of care that pretty much leaves out the GOP.

[tbuckl]

THANK YOU CORP. AMERICA and the Government for selling us out. Thanks for sending our jobs over seas, thank you for replace us with child slaves. Thank you for poluting the planet for your mighty dollar. Enjoy what you have stolen for future generations of Americans. Thank you and may God deal with your kind soon. I have no respect for Corp. America, the banks and the government. Take your laws and rules and place them where the sun don''t shine. I hope Corp America can read the fine print to come.

[silverstar06]

I wonder if this has anything to do with the US signing a nuclear deal with India today? Cuz that ''deal'' means a little more than agreeing to a nuclear military response if engaged in military/teriitorial/political differences. Don''t think that India''s ideas of nuclear strikes totally coincide with European or US American ones....and for sure rarely in defense. India uses it''s nuclear arsenal as a threat rod, not concealing it''s intentions to brutally subdue (rape) surronding nations or even the US.

[afmca]

The bottom line is America is the cause for either a world-wide recession or depression. It was our financial, banking, and mortgage companies that were managed so ineptly that the entire world is suffering. When this is over I think it would be wise to relegate Americas influence over the world''s economies to a lesser status.

[flagship-usa]

This is sad. These people are unscrupulous. We are getting a disturbing look at how this industry functions. They took bad or toxic notes, and repackaged them, than sold them to each other. They (wall street) are the pimps of the industry. What a disgusting gang of thieves and liars. This is a shameful disgrace to our country and once a proud nation.

[stevemccoy7]

Obama / Biden are trying to push their far left socialistic partisan plans as MAINSTREAM when they are anything but.

[thcarson-2009]

Here is ''NO LOSE'' Investment to help you in our current economic standings. This is a self proven method I have been very successful doing. If you had purchased $1,000 of AIG stock one year ago, you would have $42 left. With Lehman, you would have $6.60 left. With Fannie May or Freddie Mac, you would have less than $5 left. But LISTEN carefully, if you had purchased $1,000 worth of beer (no matter the brand) one year ago, drank all of the beer, then turned in the cans for the aluminum recycling REFUND, you would have had $214. Based on the above, the best current investment advice is to drink heavily and recycle. It''s called the 401-Keg Plan. This is what I, have been doing and enjoying during this so called depression. Good luck and enjoy your new found fortune. The world is now your oyster.