Stock Market Crash Expected In 2008 To Be Worse Than 1929

[Soldier4Christ]

Dollar reaches 13-month high against euro
Credit crisis causes currency tumble across Atlantic

The euro slid to a 13-month low against the dollar as a deepening credit crunch forced European governments to pledge bailouts of troubled banks and increase protection for depositors.

The 15-nation currency fell to the lowest in more than two years versus the yen as Germany joined with banks and insurers to bail-out property lender Hypo Real Estate Holding AG and Belgium announced a revised deal to rescue Fortis, the largest Belgian financial-services firm. The yen also gained against the Australian and New Zealand dollars as investors pared holdings of higher-yielding currencies funded with Japan's currency.

``Everything coming out has been fairly euro-negative,'' said Alex Sinton, a senior currency dealer at ANZ National Bank Ltd. in Auckland. ``The euro zone is the second domino of the globe to be falling over after the U.S.''

The euro declined to $1.3648 at 9:45 a.m. in Tokyo from $1.3772 late in New York on Oct. 3. It earlier reached 1.3610, the lowest since Sept. 5, 2007. The euro fell to 141.97 yen, the weakest since May 18, 2006, and traded at 142.61 yen from 145.11 yen. The dollar bought 104.46 yen from 105.32 yen.

Against the pound, the euro fell to 77.15 pence, the lowest since March 14. It also declined to 1.5379 Swiss francs, the weakest in more than six months.

The German government and the country's banks and insurers agreed on a 50 billion euro ($68 billion) rescue for Hypo Real Estate after an earlier bailout faltered.

European Bailouts

BNP Paribas SA, France's biggest bank, will take control of Fortis's units in Belgium after a government rescue of the Brussels and Amsterdam-based company failed.

The yen rose to 79.11 per Australian dollar from 81.48 late in New York on Oct. 3. It also advanced to 68.23 versus the New Zealand dollar from 69.76 and to 51.0898 against the Brazilian real from 51.5240.

Japan's currency was the best-performer in September and the only currency to appreciate against the dollar as a credit market collapse drove Lehman Brothers Holdings Inc. into bankruptcy and sent bank borrowing costs in Europe to record highs.

Deutsche Bank AG, the biggest trader of foreign exchange, says the yen will rise 5 percent in coming months. New York- based Morgan Stanley is telling clients to buy the currency versus the euro and pound.

Unbeatable Yen

After seven years of providing the cheapest source of funds for investors buying higher-yielding New Zealand dollars, Australian dollars and Brazil reais, the yen is appreciating as $587 billion of subprime mortgage-related losses force banks to restrict credit. It strengthened 4.4 percent on a trade-weighted basis in September, according to the Bank of Japan's effective exchange rate, the most since August 2007, when the seizure in capital markets began.

``We are in a multi-year trend reversal,'' said Paresh Upadhyaya, a senior vice president at Putnam Investment LLC in Boston who helps manage $50 billion in currency assets. ``We are going to see a global central bank easing cycle. The yen is the place to be in this environment of economic slowdown and heightened volatility.''

Futures traders increased their bets that the yen will gain against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission show.

Currency Futures

The difference in the number of wagers by hedge funds and other large speculators on an advance in the yen compared with those on a drop -- so-called net longs -- was 43,022 on Sep. 30, compared with net longs of 31,939 a week earlier.

The dollar fell for a fourth day against the yen on speculation reports will show a deepening slump in the U.S. economy. Pending home sales fell 1.1 percent in August after a 3.2 percent decline in the previous month, according to a Bloomberg News survey. The National Association of Realtors will release the data on Oct. 8.

The U.S. Congress approved a financial-market bailout on Oct. 3, authorizing the government to spend as much as $700 billion buying troubled assets from financial institutions reeling from record home foreclosures.

``It's unwise to buy a currency which is both in recession and having a banking crisis,'' Peter Pontikis, a treasury strategist at Suncorp-Metway Ltd. in Brisbane. ``What's not going to help the bullish case in at least the short-term is that they have an as yet unresolved banking cloud over the U.S. system.''

The dollar will weaken to $1.45 per euro over the next month, he said.

[Soldier4Christ]

European governments scramble to save banks
Financiers 'feeling the wind of default blowing from the other side of the Atlantic'

Germany became the latest country to move to allay fears about the financial meltdown, enhancing a rescue plan for Hypo Real Estate AG and guaranteeing private bank accounts as European governments scrambled on their own Sunday to save failing banks.

Chancellor Angela Merkel said that no citizen should fear for the safety of their investments. Hours later, her government announced a new bailout package totaling 50 billion euros ($69 billion) for Hypo Real Estate, Germany's second-biggest commercial property lender.

Hypo said an original euro35 billion ($48 billion) rescue plan fell apart after private lenders withdrew support, a key element to the proposal that had already been approved by the EU.

The deal was on top of the guarantees of private accounts. German Finance Ministry spokesman Torsten Albig said the unlimited guarantee covered some 568 billion euros ($785 billion) in savings and checking accounts as well as time deposits, or CDs.

At the same time, Belgian Prime Minister Yves Leterme said that France's BNP Paribas SA had committed to taking a 75-percent stake in Fortis NV.

Leterme said the Belgian and Luxembourg governments would, in turn, take a blocking minority share in BNP Paribas.

The deal came after two days of closed-door talks between the Paris-based bank, Fortis and government authorities in an effort to restore confidence in the company before markets open Monday.

In Iceland - particularly hard-hit by the credit crunch - government officials and banking chiefs were discussing a possible rescue plan for the country's overstretched commercial banks.

British treasury chief Alistair Darling said he was ready to take "pretty big steps that we wouldn't take in ordinary times" to help the country weather the credit crunch.

In the past year the government has nationalized struggling mortgage lenders Northern Rock and Bradford & Bingley.

"The European banking industry is feeling the wind of default blowing from the other side of the Atlantic," said Axel Pierron, senior vice president at Celent, a Boston, Massachusetts-based financial research and consulting firm.

The erosion has also injured overall confidence and caused concern among investors, politicians and the European public.

The leaders of Germany, France, Britain and Italy met Saturday to discuss the meltdown that has leapfrogged across the Atlantic from the U.S. to Europe, but shied away from action on the scale of the massive $700 billion bailout passed by the U.S. Congress on Friday and later signed into law by President Bush.

Their failure to agree to an EU-wide plan showcased the divisions in Europe on how to deal with the crisis.

France had suggested a multibillion-euro (multibillion-dollar) EU-wide government bailout plan, but backed off after Germany said banks must find their own way out.

French President Nicolas Sarkozy's top adviser, Claude Gueant, insisted that a "common European plan" had come out of the summit.

"What is certain and what the citizens of France and Europe must know is that their (banking) establishments won't be left in difficulty," he told Europe-1 radio on Sunday.

Icelandic banks expanded rapidly after deregulation of the domestic financial market in the 1990s and now have combined foreign liabilities in excess of 100 billion euros ($138 billion) - dwarfing the tiny country's gross domestic product of 14 billion euros ($19 billion euros).

The government last week took over Iceland's third-largest bank, Glitnir, a decision that prompted major credit ratings agencies to downgrade both Iceland's four major banks and its government credit rating.

Looming large was a growing sense that the Federal Reserve and Europe's major central banks - which have been flooding euros and dollars to banks that have grown increasingly unwilling to lend money even to themselves - were ready to institute emergency cuts to their benchmark interest rates this week.

None of the banks, including the European Central Bank and Bank of England, have commented on potential rate hikes or cuts. But analysts believe the Bank of England, which meets this Thursday, will likely lower its rate below 5 percent. The ECB left its rate unchanged at 4.25 percent on Thursday, but opened the door to a rate cut.

Robert Brusca, chief economist at the New York-based Fact and Opinion Economics, said that the ECB does issue such a cut it would a be a sign "that they're really, really scared."

[Soldier4Christ]

Dow dips below 10,000 for 1st time since 2004
European governments move to limit damages from financial crisis

Financial markets took a bleak view of the future Monday, seeing contagion in a credit crisis that threatens to cascade through economies globally despite government efforts to provide relief. The Dow Jones industrials skidded more than 500 points and fell below 10,000 for the first time in four years, while the credit markets remained under strain.

Investors around the world have come to the sobering realization that the Bush administration's $700 billion rescue plan won't work quickly to unfreeze the credit markets. Global banks, hobbled by wrong-way bets on mortgage securities, still remain starved for cash as credit has dried up.

That's caused stocks to plunge in the U.S., Europe and Asia, and drove investors to sink money into the relative safety of U.S. government debt. Fears about a global recession also caused oil to drop below $90 a barrel; and the benchmark index that gauges fear in the market jumped to the highest level in its 18-year history.
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"The fact is people are scared and the only thing they're doing is selling," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "Investors are cleaning out portfolios and getting rid of everything because nothing seems to be working."

The selling was so extreme that only 98 stocks rose on the NYSE — and 3,092 dropped. That's a telling sign considering the stock market is considered a leading economic indicator, with investors tending to buy and sell based on where they believe the economy will be in six to nine months.

Monday's steep decline on Wall Street indicates that investors are becoming more convinced that the country is leading a prolonged economic crisis that is spreading to other nations. Over the weekend, governments across Europe rushed to prop up failing banks, while the governments of Germany, Ireland and Greece also said they would guarantee bank deposits.

As the U.S. tries to shore up its battered banking system, the German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG. And France's BNP Paribas agreed to acquire a 75 percent stake in Fortis's Belgium bank after a government rescue failed.

The Fed also took fresh steps to help ease seized-up credit markets. The central bank said Monday it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks.

   
Slide show
Image: Pedestrians walk past an electronic board showing the Hang Seng Index outside a bank in Hong Kong
  Red zone
From Japan to Germany, stockbrokers around the world grapple with volatile stock markets.

more photos

In midday trading, the Dow Jones industrial average fell 516 points, dropping below 10,000 for the first time since Oct. 29, 2004. At one point, the Dow was down nearly 600.

Broader indexes also tumbled. The Standard & Poor's 500 index shed 60 points; and the Nasdaq composite index fell 113 points. The Russell 2000 index of smaller companies dropped 26.33, or 4.25 percent, to 593.07.

In Asia, the Nikkei 225 closed 4.25 percent lower. Europe's stock markets also declined, with the FTSE-100 down 5.20 percent, Germany's DAX down 7.07 percent, and France's CAC-40 down 9.04 percent.

[HisDaughter]

Preparing for financial apocalypse, Americans stock up   

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Some are hunkering down for the economic apocalypse. Others say they are merely stocking up on essentials for a worst-case scenario. In Marysville — and across the country — September's financial disasters have been driving Americans into survival supply stores for Meals Ready-to-Eat, and other emergency goods for long-term storage.

"I've been selling ammo cans by the pallet," says Tom King, owner of Sutter Surplus Sales on D Street.

Many of his customers, he says, "are gearing up to raise their own food and put up security fences. They're telling me to be ready."

"Granted," he says, "they are the extremists."

But precautionary measures are no longer the domain of survivalist regulars.

After the S&P 500's blue-chip index lost 9 percent on Monday — the biggest one-day percentage drop since 1987's Black Monday — Campbell Soup Co. stood tall as the lone sell-off survivor. That fact left one financial strategist, quoted in U.S. News & World Report, to quip, "If you have no confidence in your banking system ... the only thing you can have confidence in is the ability to build a bunker."

At the Ready Store, an Online operation based in Salt Lake City, water filters are at a premium. So are MREs, a key food source for military personnel during training and combat deployments.

"In the last two weeks," says Jonathan Dick, the company's sales and marketing manager, "we've sold 200 percent above normal levels in just about everything."

Hurricane Ike, which reached land Sept. 12, continues to play a big role on both the demand and supply ends of the business, especially when it comes to MREs.

The Federal Emergency Management Agency bought an unprecedented number of the pre-packaged, add-hot-water-and-eat meals from one of two primary wholesale suppliers in the days just after the storm struck the Gulf Coast.

FEMA also bought 13 truckloads of MREs from Ki4U.com, a distributor out of Gonzales, Texas.

"Inventory is shrinking here faster than this page can be updated," reads the explanation on that company's Web site. A seller of anti-radiation pills, fallout shelters and nerve gas detectors, Ki4U.com advertises such information as, "The Good News About Nuclear Destruction."

But Dick says his own spike in sales owes more to bank failures and their aftermath, than to hurricane survivors or the truly paranoid.

"With natural disasters, you see increases in short-term survival sales," he says. "People are trying to get through the next three days."

But since mid-September, people have been ordering a six-month or a year's supply of food, he says.

"We had a record day yesterday," Dick says of Monday, which saw a failed bailout proposal in Congress and plummeting action on Wall Street. Customers told him, "What if I lose my job and I lose my life savings and I don't have any money to buy food?"

"It's not just extremist people," Dick says. "There's a lot of uncertainty out there right now."

For King and his Marysville store, sales of hunting and camping gear are flat for this time of year.

But on Tuesday, he had only two MREs left on the shelf and no way of getting more. He sells the packs for $10 a-piece, and now steers customers to dehydrated foods, also a big seller at the Ready Store.

Sales of duffel bags and other carrying bags also have been remarkably brisk in recent days, King says.

Many of his customers, especially those from the Sierra foothills, he says, mention the current financial crises as their primary reason to stock up on such items.

"They think the polarization between the haves and have-nots is going to be very extreme," King says. And when limited resources become even more valuable, "they'll need to stay mobile."

[Soldier4Christ]

A Free Market Does Balance Itself


Dow shocker:
It's global crisis
800-point plunge before late rebound,
European markets lose as much as 9%


In the wake of a $700-billion congressional bailout, Dow Jones industrials fell as much as 800 points today as investors reacted to the global impact of the credit crisis.

The Dow dropped below 10,000 for the first time since October 2004, finishing down 370 points at 9,956.

As markets plummeted worldwide, President Bush warned "it's going to take awhile" for the $700 billion financial rescue plan passed by Congress last week to bolster the economy.

Oil dropped below $90 a barrel, meanwhile, amid fears of a global recession.

In Asia, the Nikkei 225 was down 4.25 percent while Europe's markets took even bigger hits. The FTSE-100 lost 5.77 percent, Germany's DAX dropped 7.07 percent and France's CAC-40 plummeted 9.04 percent.

In other U.S. markets, the Standard & Poor's 500 index lost 44 points, or 3.85 percent, falling to 1,057. The Nasdaq composite shed 84, or 4.34 percent, to 1,863. The Russell 2000 index of smaller companies dropped more than 23 points, or 3.79 percent, to 596.

In Germany, the collapse of a government bailout deal for Hypo Real Estate over the weekend threatened a bankruptcy on the scale of Lehman Brothers.

German Chancellor Angela Merkel guaranteed all German saving one day after she rebuked Ireland for doing the same, the London Telegraph noted. Ireland and Greece have had to rescue all their banks, and the Netherlands has rushed through a second, more sweeping nationalization of the Belgian-Dutch bank Fortis.

[HisDaughter]

Oct 7, 2008 15:29 | Updated Oct 7, 2008 15:57
Hamas blames Jews for global crisis
By JPOST.COM STAFF

The "Jewish lobby" in the US is responsible for the world financial crisis, according to Hamas spokesman Fawzi Barhum.

In a statement released Tuesday, Barhum said that the global crisis was due to "bad administrative and financial management and a bad banking system put into place and controlled by the Jewish lobby."

While signing a $700 billion bailout law, US President George W. Bush has not commented on "the Jewish lobby that put the US banking and financial sector into place," the Hamas statement continued.

Last week, the Anti-Defamation League (ADL) reported that the worldwide financial meltdown has triggered an uptick in anonymous anti-Semitic comments blaming Jews for the crisis on mainstream Web site message boards.

"Jews are greedy, rotten slimeballs," wrote one surfer on a Yahoo finance group, according to the ADL statement.

"It's difficult, if not impossible, for one honest investor to neutralize the efforts of thousands of Jewish swindlers," added another.

In response to such comments, ADL national director Abraham Foxman had said, "The age-old canards about Jews and money are always just beneath the surface."

[Shammu]

The only place unaffected by financial turmoil: Iraq

By David Goldstein, McClatchy Newspapers Mon Oct 6, 7:25 PM ET

WASHINGTON — Fear and uncertainty were hot commodities in global markets Monday.

Stocks plummeted and currencies fell as shock waves from the Wall Street meltdown continued to reverberate across financial capitals.

The Mexican peso plunged to its lowest level in years. Its stock market dropped 5.4 percent.

Brazil and Russia temporarily halted trading after a series of steep drops on their exchanges.

Meanwhile, Sweden , Denmark and Austria joined Ireland and Germany on a growing list of European countries that have pledged to guarantee bank deposits to tamp down consumer worries.

"This is a stampede," said Valerie Plagnol , chief strategist at CM-CIC Securities in Paris .

On the very day that Washington began to unfold the $700 billion economic rescue mission, foreign governments and investors seemed resigned to a long period of tight credit and turmoil.

Russia suspended its benchmark RTS stock index twice on Monday, as it fell 19.1 percent, its worst ever one-day drop. It had already halted trading three times last Friday, hoping to slow sliding shares and capping the market's worst week in nearly a decade.

Russia on Monday also shut down its second major market, the Micex, three times. It had fallen nearly 19 percent.

The global credit crunch has compounded Russia's financial woes. It's already reeling from the one-two punch of falling oil prices and the loss of billions in foreign investment after the August war with Georgia .

In Latin America , the U.S. financial crisis caused trading on Brazil's stock exchange to be halted twice on a day when the value dropped by 8 percent.

In Argentina , stocks fell 10 percent, and currencies across the region tumbled against the dollar.

"The turmoil is really starting to hit Latin America ," Jane Eddy , a senior regional specialist for ratings agency Standard & Poor's . "You have stock market drops, currencies weakening and credit really drying up. Everyone is on hold waiting to see what will happen over the next two weeks."

The uncertainty comes at a time when Latin America has been enjoying its strongest sustained economic growth in 25 years. The region grew by 5.7 percent in 2007 and was projected to grow by about 4.5 percent in 2008.

Thomaz Teixeira , a stock analyst at Socopa Corretora in Sao Paulo , said investors were not necessarily in a "panic."

"But they're selling for the sake of selling at whatever price," he said. "In time, though, we believe that the market will heal."

In South Africa , the stock market hit its lowest mark in more than eight years. Banks in Zimbabwe ran out of cash after depositors tried to pull out their money.

In Pakistan , already embattled on the political front, the rupee hit a new low against the dollar. With its currency having lost 21 percent of its value already this year, Standard & Poor's warned that the country was close to bankruptcy.

Next door, in India , stocks fell nearly 5.8 percent, the lowest close in two years. The index has shed more than 42 percent of its value this year, with foreign investors leading the retreat.

In response, the capital market regulator lifted curbs Monday on overseas investors to halt record sales by offshore funds.

In the Middle East , Kuwait pumped $374.3 million into the banking systems Monday and Saudi Arabia injected more $26 million into its stock market, local newspapers reported.

Apparently immune to all the turbulence was Iraq . The government has little if any investments in the institutions affected by the crisis and a barely functioning stock market. Most Iraqis keep their money in their homes rather than trust banks.

"We don't believe it will affect our bank balance," said Minister of Industry Fawzi Hariri . "In the short term we'll be one of the least affected nations."

The Iraqi government has more than $25 billion in cash reserves. Even with oil prices dropping below $90 a barrel, the Iraqis forecast oil revenues to be in the neighborhood of $80 billion .

The only place unaffected by financial turmoil: Iraq

[Shammu]

Very interesting. Babylon a place of financial stability and security. At least temporarily......... But if that's the case, they can repay the USA their massive debt.

[nChrist]

Very interesting. Babylon a place of financial stability and security. At least temporarily......... But if that's the case, they can repay the USA their massive debt.

WOW! I also noticed the astounding irony of this. Everything is beginning to fall neatly into place for ushering in the END Days. YOU CAN ALMOST HEAR THE FOOTSTEPS OF THE MESSIAH! By the way, I personally believe that Christians will be part of the Heavenly Hosts following CHRIST into Battle.

[Soldier4Christ]

Dow below 9,000 in late afternoon trading
Tech overshadowed by weak financials, energy, health care

A runaway train of a sell-off turned the anniversary of the stock market peak into one of the darkest days in Wall Street history Thursday, driving the Dow Jones industrials down a breathtaking 679 points and deepening a financial crisis that has defied all efforts to stop it.

Stocks lost more than 7 percent, $872 billion of investments evaporated, and the Dow fell to 8,579. When the average crashed through the 9,000 level for the first time in five years in the final hour of trading, sellers had only begun to hit the gas pedal.

As bad as the day was, even worse was the cumulative effect of a historic run of declines: The Dow suffered a triple-digit loss for the sixth day in a row, a first, and the average dropped for the seventh day in a row, a losing streak not seen since 2002.
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“Right now the market is just panicked,” said David Wyss, chief economist at Standard & Poor’s in New York. “Nobody wants to take on any risk. Everybody just wants to get their money and put it under the mattress.”

It all took place one year to the day after the Dow closed at its record high of 14,164. Since that day, frozen credit, record foreclosures, cascading job losses and outright fear have seized the market and sapped 39 percent of its value.

Paper losses for the year add up to an staggering $8.3 trillion, according to figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in America.

It was the second straight day that Wall Street was rocked by a final-hour sell-off, but this one was particularly shocking.

Most of the day was relatively calm, and the trading floor was quieter than usual because of the Jewish holiday of Yom Kippur. Wall Street awoke to news the federal government was brandishing a new weapon against the financial crisis — considering seeking an equity stake in major U.S. banks in order to stabilize them.

But that step appeared to be as ineffectual as the others Washington has rolled out in recent weeks, including a $700 billion bailout of the financial industry, a coordinated interest rate cut by central banks around the world and direct lending by the Federal Reserve to private companies to provide them with short-term cash.

Acquiring a stake in the banks would be yet another startling intervention by the government in the free market, but economists said President Bush was left with little choice because of the credit markets, where tight lending has choked off the everyday cash that is the lifeblood of the economy.

“In normal times, this would be out of the question, but in the present dire situation, I think the government should be employing all the powers that it can,” said Sung Won Sohn, an economics professor at California State University, Channel Islands.

After the closing bell, shellshocked traders and bankers gathered at Bobby Van’s Steakhouse and downed beers and drinks to chase the ghastly numbers. One Wall Streeter joked things had gotten so bad that he should apply for a job as a waiter.

“It was an ugly day, there’s no ways to put it,” said another customer, Alan Valdes, director of floor operations for Hallard, Lyons. “Guys were frustrated, just fed up. ... We’re in an area no one has been in since 1930.”

Wall Street has been teetering on the brink of panic for a month now, vulnerable to any bad news. Thursday’s sell-off was triggered when a major credit rating agency put General Motors Corp. and its finance affiliate under review to determine whether it should be downgraded.

Stock in GM, one of the 30 components of the Dow Jones industrials, lost 31 percent of its value and closed at $4.76 — its lowest in more than half a century, since the Korean War began.

For the Dow, it has been nothing short of a free fall:

    * The average is down 2,338 points, or 21 percent, in the last four weeks, since the Lehman Brothers bankruptcy escalated a long-running credit crunch into a full-fledged crisis.
    * The point decline Thursday was the third-worst in Dow history. The worst, 778 points, came less than two weeks ago.
    * Of the last 19 trading days, there have been 11 triple-digit losses — including the unprecedented six straight. The six gains have all been triple-digits, and only one of them was enough to make up the losses of the day before.
    * The Dow now stands only about 1,300 points above its lowest close of the bear market that followed 9/11. In a market as volatile as this, that gap can be closed in a couple of trading days, or less.

In fact, triple-digit declines can happen almost in an instant.
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On Thursday, the Dow was above 9,200 after 1:30 p.m. and still above 9,000 after 3 p.m. The pressure to sell was so intense that the Dow kept dropping precipitously for 10 minutes after the 4 p.m. closing bell as the day’s losses were tabulated.

In percentage terms, the drop in the Dow exceeded the day the markets reopened after the Sept. 11, 2001, terrorist attacks. It was not close to the 22.6-percent decline on Black Monday in 1987, the last stock market crash.

Still, it is becoming increasingly clear that Washington has ever fewer places to reach in its toolbox to stop, or perhaps even slow, the crisis. Among the options still left are buying up foreclosed properties and making direct loans to homeowners, both of them hard for free-market supporters to swallow.

Speaking in the afternoon before the market closed, President Bush told an audience on the South Lawn of the White House that the economy was going through a “very tough stretch.” But, he said: “I’m confident in our economy’s long-term prospects.”

After the market closed, the White House said Americans should remain confident despite the market plunge, and Bush planned to speak from the Rose Garden on Friday morning — though he was not expected to unveil any new policy proposals.

House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid asked Bush on Thursday to call an emergency meeting of the G-8 industrial nations’ heads of state to address the continuing global credit freeze and instability in world markets. The G-8 comprises France, Germany, Italy, Great Britain, Japan, the United States, Canada and Russia.

In the markets Thursday, the broader stock indicators registered similar declines to the Dow’s. The Standard & Poor’s 500 index fell 7.6 percent to the 909 level, and the Nasdaq composite index fell 5.5 percent to 1,645.

Meanwhile, the credit markets remained stubbornly locked-up. The benchmark rate that banks charge each other for loans, known as Libor, rose to 4.75 percent from 4.52 percent a day earlier, signaling banks are still afraid to make loans because they worry they won’t be paid back.

“The story is getting to be like that movie Groundhog Day,” said Arthur Hogan, chief market analyst at Jefferies & Co. “Everything we’re seeing is historic. The problem is historic, the solutions are historic, and unfortunately, the sell-off is historic. It’s not the kind of history you want to be making.”

Adding to Wall Street’s nervousness, a ban on short selling — a process in which investors borrow shares of stock and essentially bet the value will fall — expired.

With three and a half weeks before voters elect Bush’s successor, there was also no immediate comment on the Wall Street action from the presidential candidates, Democratic Sen. Barack Obama and Republican Sen. John McCain.

Earlier in the day in Dayton, Ohio, Obama took aim at McCain’s plan to have the government absorb the full cost of renegotiating mortgages for borrowers under strain from the dramatic decline of the values of their homes.

McCain rolled out the idea at the second presidential debate earlier this week, a forum in which he also told voters it was important to have a steady hand in the White House during a time of economic crisis.

[Rhys]

Earlier in the day in Dayton, Ohio, Obama took aim at McCain’s plan to have the government absorb the full cost of renegotiating mortgages for borrowers under strain from the dramatic decline of the values of their homes.

This is a bad idea anyway. Will it be used to bail out speculators who bought second homes or houses to "flip"? People who mortgaged their homes to buy TV's and cars? Why should I as a taxpayer bail them out?
If enacted, it should be restricted to first time home buyers who are in danger of foreclosure. However, I don't trust the government to do this so let's forget the idea.

[nChrist]

This is a bad idea anyway. Will it be used to bail out speculators who bought second homes or houses to "flip"? People who mortgaged their homes to buy TV's and cars? Why should I as a taxpayer bail them out?
If enacted, it should be restricted to first time home buyers who are in danger of foreclosure. However, I don't trust the government to do this so let's forget the idea.

Hello Brother Rhys,

First, it's great to hear from you. In terms of trust in government, that's almost non-existent these days. There are so many levels of corruption and wrong-doing that I'm surprised that anyone has any trust at all in government. As an individual, I only trust specific politicians with a lengthy record of trying to do right and do a good job for the people. Needless to say, this is a very small number for me. I don't know of anyone who trusts the government. This is very sad, and I think that most folks see that things are getting worse by the day.

[Soldier4Christ]

Dow breaks (downward) through 8,000 in early trading
Investors fret that even low interest rates won't unfreeze credit

Stock prices swung sharply on Wall Street, with investors still selling heavily but also scooping up stocks that have been decimated by more than a week of huge losses. The Dow Jones industrials, fell nearly 700 points to break (downward) through 8,000 in the opening minutes of trading, recovered to an advance of more than 100 before turning lower again, and the other major indexes fluctuated sharply as well.

Frozen credit markets and a loss of confidence in the world's financial system have caused the Dow to drop 21 percent in just 10 trading days. The blue chip index tumbled 678 points Thursday, and is heading to its worst weekly point drop, and one of its biggest weekly percentage drops, since being created 112 years ago.

A barrel of light, sweet crude declined $3.60 to $82.99 a barrel on the Nymex.

[Barbara]

Eurpoean Crisis deepens: Officails Vow to Save Banks

Bloomberg Financial News, Oct. 6, 2008

"French President Nicolas Sarkozy, who convened the Oct. 4th meeting, called for a global summit as soon as possible to 'implement a real and complete reform of the international financial system.' He said 'all actors' must be supervised, including credit rating firms and hedge funds. Executive pay system must also be reviewed, he said.'

'We want a New World to come out of this,' Sarkozy said. 

Right on cue, President Bush announced a global summit meeting for later today!!! Interesting!!!

[Soldier4Christ]

'We want a New World to come out of this,' Sarkozy said. 

Yes, this is the point of this entire thing.