Monday, October 6, 2008

Worldwide Crash!

Today a worldwide major sell off of stocks and bonds was triggered due to fears of slower global economic growth – despite a $700 billion US bank bailout being passed by legislators and efforts by several European countries, including Germany and Denmark, to rescue their banks.

“In our country, the ‘Fundamentals are Sound’ group at Treasury, and the ‘Whip Inflation Now’ group at the Federal Reserve couldn't switch fast enough from ‘fighting inflation’ to ‘fighting recession,’ ” says Jim Cramer, economic guru, host of CNBC’s Mad Money and co-founder of

Fed Chairman Ben Bernanke studied the Depression, or so they say, and supposedly knew more about how to stop it than anyone. It appears he knew less than anyone as he and his minions presided over the deflationary destruction of worldwide finance.

• Starting in Asia, the sell off spread to Europe and Wall Street, where the Dow Jones fell by more than 6.7% to end below 10,000 points for the first time since 2004.
• The London stock market lost 7.85% – its biggest percentage fall since 1987. Germany's market lost 7.39% while France's Cac-40 index dropped 9.04% - its biggest one-day fall ever.
• Share trading was temporarily suspended in the markets of Brazil and Russia after prices plummeted by 10% and 15% respectively. Russia's market ended 19.1% down.
• Japan's market closed down 4.3%, or 465 points, at 10,473.1 – its lowest close since February 2004. Hong Kong's Hang Seng index slid 5%.
• Markets in India, China, Australia, New Zealand and Singapore also lost ground, while the Indonesian market lost 10% – the biggest one-day fall on record.
• Iceland suspended trading in shares of six major financial institutions bank shares and the government offered unlimited guarantees on savers' deposits. It had earlier agreed measures for the country's banks to sell off some foreign assets. The currency last week plummeted 20% against the dollar and the government was forced to bail out the country's third-largest bank.
• Sweden massively increased the level of protection it offered bank depositors while Denmark moved to offer full protection. Austria said it would also boost protection but did not decide on how much.
• In Italy, the board of banking announced a €3 billion emergency capital increase.

This is just the beginning! We will probably see the stock markets drop much more. Due to the extreme deregulation of the U.S. financial markets, which allowed them free reign to do whatever they wanted, we now have a severe recession in the making, possibly a Depression. The $700 billion bailout will take one to two years to work its way through our economy. In the meantime, we are going to hurt, from Wall Street to Retirement Pension Funds to Main Street to the farm (because farmers won’t be able to get loans to start next year’s crop due to very tight credit markets).

And McCain thinks the bailout means his campaign can turn the page on the economy! He does not understand how the economy works.

McCain does not understand!