How's this for a headline: Panic sparks plunge in global markets.
Global equities plunged on Monday as investor concerns over the economic outlook and financial market turbulence snowballed into a sweeping sell-off. Tumbling Asian shares – which continued to fall early on Tuesday – led European stock markets into their biggest one-day fall since 9/11 as the prospect of a US recession and further fall-out from credit market turmoil prompted near panic among investors, who rushed to the safety of government bonds. About $490bn was wiped off the market value of Europe’s FTSE Eurofirst 300 index and $148bn from the FTSE 100 index in London, which suffered its biggest points slide since it was formed in 1983. Germany’s Xetra Dax slumped 7.2 per cent to 6,790.19 and France’s CAC-40 fell 6.8 per cent to 4,744.45, its worst one-day percentage point fall since September 11 2001. …US markets were closed for the Martin Luther King Jr Day holiday, but the futures market suggested the S&P 500 index would fall more than 4 per cent when it resumes trading on Tuesday. Traders said that the prospect of a sudden decline in US stocks could prompt the Federal Reserve to cut interest rates before its scheduled meeting on January 30. The Fed said it did not comment on speculation.
As the sub-prime loan domino effect continues, the asinine “economic stimulus”/financial rebate proposal Bush floated the other day shows that Dear Leader continues to instill confidence around the world. The first MBA president, the man who ran companies into the ground before stepping into the Oval Office – who could ask for anything more.
UPDATE: If you think this is just a lot of economic gibberish, this should get your attention.
The Fed said it was cutting the federal funds rate, the interest that banks charge each other on overnight loans, to 3.5 percent, down by three-fourths of a percentage point from 4.25 percent.
The Fed action was the most dramatic signal it can send that it is concerned about a potential recession in the United States.