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Photograph of a computerized display showing the FTSE 100 index in London today by Akira Suemori/AP
Stock markets around the world fell today, hours after the U.S.'s Dow Jones Industrial Average slid 668 points to end yesterday under 8,600. The NY Times says the "Global Markets Dive in a Relentless Selloff"--and a German equity strategist explained, "We are fighting really dire fundamentals. It will require restoring trust and confidence before a sustained rebound will be possible.” USA Today also emphasizes the lack of confidence is what is driving the crisis.
Japan's Nikkei fell 9.6%, Hong Kong's Hang Send fells 7.19% and right now, Britian's FTSE 100 is down 7.2%, the French CAC-40 is 7.8% down, and the German DAX is down 8.2%. (Here's CNBC's world markets page.)
Today, U.S. stock futures suggest "another sharp day of losses" today. Investor Wilbur Ross told CNBC, "You're not going to fix the stock markets until you fix the credit markets. So I hope that the government comes out with some broad-based things, be it some combination of insuring interbank lending and/or putting a limit on insured deposits all the way up."
Update 9:30 a.m.: The Dow is down 539 points.
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US trade deficit is down 3.5%.
This won't make anyone panic:
U.S to mull backing bank debt, all deposits
http://www.marketwatch.com/news/story/us-mull-backing-bank-debt/story.aspx?guid={3CD5A9F0-1306-471A-AE0B-C2BE9F283760}
How do you 'fix' credit markets? The system was broken already with loans made on top of loans on top of loans, etc. Markets take off when credit is flowing and times are good. I don't think anyone can say definitively how to get everything working smoothly again. The governments around the world are doing everything except actually rebuilding their economies. If you look at what Iceland did and then multiply it by 1000, that's what America is going to have to do - focus on local and national industries and original strengths. There is no overnight fix for any of this, as the banks are hoarding credit to deleverage and capitalize. It's going to take something other than the financial industry to get everything going again.
Hi
I know nothing about stocks and shares so please don't laugh at my question lol.
But if all these stocks and shares are being sold - as per "Global Markets Dive in a Relentless Selloff" - they must be being bought by someone.
So can someone please explain why the market keeps going down? Surely buying and selling is the raison d'etre of stock markets?
Explanation v. much appreciated. :)
Hmmmm. lack of confidence? why? it's cause upper management and stockbrokers lie to investors about how the companies are doing then screw them over and run away with the money so taxpayers can foot the bill. If you put some of these fuckers in jail then maybe some confidence would be restored. the average investor is like "okay, now we should trust these guys again because...."
bernanke and paulson need to stfu already. They are inciting investor panic selling with these addresses to the media about how the sky is falling.
and amazingly i agree with bh on this one. throw them all in jail, that will definitely regain some credulity to these markets. better yet put them in stocks on wall street so we can throw rotten vegetables at these people. we could call it the "stock market"
haha
everytime a newspaper, website, radio station, or news program covers this, the dow drops another point.
stop instilling fear in americans, gothamist. you're better than that.
Austin Baird, a lot mutual funds and hedge funds are being "forced to sell" into the market because investors/retires are scared and want to sit in cash. Right now the bid/ask spread on stocks are blowing out because there are more sellers then buyers which depresses the price. The link below should explain the process.
http://www.investopedia.com/articles/trading/121701.asp
what happened to the old adage that the market is cyclical and to let it run it's course. nothing to worry about.
I'm guessing speculating greed has something to do with it. yes, greed. greed from hedge funds.
or can someone explain it in a simple manner because they can't, it's voodoo.
#10 - this is cyclical. if you imagine that stocks are blown by the hot air that broker blow up and they are fluttering in the sky and then suddenly they run out of capital helium from the investors then the financial gravity dictates that those stocks will fall. It just turns out that all that speculation was just speculation. There was no gold there. The US has finally learned that nobody can sustain living like paris hilton or the girls from "the hills" without doing anything for very long.
Hang Seng, sweetie.