The US govt plans on buying stakes in banks in order to free up credit. Too little too late. European markets continued to fall today, by as much as 10%. Morgan Stanley’s stock fell by 22.35% today after falling by 25.8% on Thursday. Goldman Sachs’ shares also fell by 15%. A last minute rally helped the Dow only lose 1.28% today. It closed at 8,451.19, a loss of 128.
Oil closes below $78 a barrel. Will the barrel of crude sell for less than $65? Something that didn’t seem possible just a few months ago is almost reality.
Banks from Iceland face claims from depositors abroad. This could easily make Iceland go completely bankrupt, since the krona is so totally devaluated.
The credit squeeze hits Europe. Business credit lines are starting to be frozen, chopped into smaller pieces or just plain canceled as a response to the credit crunch. Businesses needing revolving credit in order to do their daily operations are going to have to find alternative financing, which if it isn’t found, will shut them down.
Stock markets in Asia plunged as well. With exports slowing down, it was bound to happen. So many markets are tied to the US, it was inevitable. With the US economy in disarray, many believe that their salvation lies with China. India hasn’t felt the squeeze that much, but they would be stupid to ignore the upcoming recession. Fear has already gripped Japan. Russia plans on buying shares on its market as well.