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Financial Crisis Update

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For Financial Markets News Of The Day

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Wedneday, 10-8-8

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Asian Markets Meltdown

Japan Off 9%

Asia's battered markets plunged for a fifth straight today following yet more turmoil on Wall Street, with the Japanese market plummeting to its lowest level since the stockmarket crash of October 1987.

By the end of a torrid trading session in Tokyo, the benchmark Nikkei 225 index was down by 952.58 points to 9203.32, a fall of more than 9%.

The US bail-out package, a string of bank rescues and sustained injections of extra funds by central banks around the world have failed to ease fears that there is no way out of the current crisis, analysts said.

"Amid deepening uncertainty over the course of the financial crisis and worries over a slowdown in the global economy, investors simply don't find incentives to buy stocks," said Kabuki Miyazawa, a market analyst at Daiwa Securities SMBC.

"Selling seems almost unstoppable because of uncertainty over the crisis."

On Wall Street the Dow Jones industrial average lost more than 5 % on Tuesday, despite attempts by the US Federal Reserve to ease the credit crisis. Comments by the Fed's chairman, Ben Bernanke, sparked speculation that an emergency cut in interest rates is not far off. More details, LINK HERE.

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European Markets Continue their Slide

The European markets opened sharply lower on Wednesday and are trading in the negative territory, tracking heavy losses on Wall Street and in the Asian markets on the back of mounting global financial crisis. LINK HERE.

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Russian Markets Crash/Close

One of Russia's leading stock exchanges has suspended trading until Friday after share prices fell too sharply.

Shares on Moscow's Micex index dropped by 14% in the first half hour of Wednesday trading, prompting the halt.

The country's other key index, the RTS exchange, has also been suspended after falls of 11%, though no time frame has been set for it to reopen.

Both indexes saw record losses on Monday, and measures to boost banking system liquidity got a tepid reception. More details, LINK HERE.

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Indonesia Closes Markets Indefinitely

LINK

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UK Unveils Bank Bailout Plan

British government officials rolled out a bank bailout plan amidst the worst banking crisis in its history. Britain revealed a plan that would add an $87 billion dollars to British banks to stabilize the banking system's balance sheets. More details, LINK HERE.

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French Prez Wants

New World Financial Order

 

 

French President Nicolas Sarkozy is calling for a new financial world order to form from the current chaos the world is now experiencing. More details, LINK HERE.

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Iceland on Brink of Bankruptcy

LINK

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US Fed & World Central Banks

Coordinate W-Wide Rate Cuts

 

The United States Federal Reserve Bank and central banks around the world joined together in a joint, coordinated effort to cut interest rates simultaneously in yet another effort to quell market fears and send a strong message to short-selling arbitragers to halt their profits. The move demonstrates that central banks can work together to halt traders who upset markets during their inter-nation trading swaps. Such trading can often have an unsettling affect on markets spooked by fear.

The US Fed cut interest rates by 50 basis points or one-half percent to join with most other central bank rate cuts of a similar amount, although Australia's central bank cut their rate by a full one-point.

The US Fed's move came at an odd hour - around 7 a.m. as part of the worldwide cut coordination, apparently timed to occur at a moment of maximum effect to calm European markets which have suffered the most turmoil in market action this week.

European markets remained negative during European central bank rate cuts but spiked to the upside when the US Fed announced their rate cut. Clearly, the world still looks to the US as the economic leader, dispelling claims by some that America is a second or third-rate economic power due to the collapse of the real estate, banking-credit markets.

American stock exchanges responded well to the Fed's rate cut on the market opening, but the Dow Jones 30 Industrials and the S&P 500 quickly dropped into negative territory in a steep drop. The DJIA-30 was down more than 200 points an hour into trading before moving back into positive territory and then back down over 100 points into negative territory in an extremely volatile, choppy, see-saw market. For more details on the coordinated rate cuts - LINK HERE.

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