Wall Street Braced For Turbulence

Wall Street is braced for more turbulence as the financial world searches desperately for a way out of the economic meltdown.

Markets in New York plunged on another extraordinary and traumatic 24 hours on Monday.

The Dow Jones fell as much as 800 points before closing with a loss of 350.

The frantic selling was sparked by the growing realisation that the credit crisis is likely to take a heavy toll around the world.

Interactive Map: Credit crunch hits Europe

And there are increasing worries that the Bush administration's $700bn financial rescue plan might not be enough to stop the rot.

On Wall Street itself, tourists buttonhole traders for the latest news as they leave the New York Stock Exchange at the end of the day. There is little to encourage optimism.


Few of those traders speak openly to the media crowded around Wall Street these days. One told me: "We just don't know where it's going to end."

A poll has revealed that nearly six out of 10 Americans believe another economic depression is likely.

Seth Glickenhaus believes a repeat of the 1930s 'Depression' is unlikely. He should know - he was working on Wall Street during the crash of 1929.

Now 94 years old, he is still working as chief investment officer for his family firm.

He said: "You have one conspicuous difference between this and the 1929 break.

"Then the president and the treasury secretary believed it wasn't the role of the government to get involved."

The alarm bells continue to ring in the US. One of the country's most familiar television financial broadcasters has told investors they should get their money out of the stock market.

Speaking on a network daytime show, Jim Cramer said: "Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now."

US officials have called for a "forceful and co-ordinated" global reaction to the crisis. It is seen a response to the fragmented approach in Europe.

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World stock markets fall as U.S. ills spread

By David J. Lynch, USA TODAY
No place to run. No place to hide.

As the sun moved west Monday, it shone on one market bloodbath after another. First Tokyo, then Hong Kong and Bombay. Later, Moscow, Frankfurt, Paris and London joined the casualty list. Market indexes in every important capital ran red.

"It's a scary time in markets worldwide. This is turning into a crisis of confidence around the world," said Eswar Prasad, former chief of the International Monetary Fund's financial studies division.

If the rest of the world once hoped it might decouple from the sputtering U.S. economic engine, those hopes have been shredded. Monday's comprehensive market rout was both a verdict of "not good enough" on the United States $700 billion financial rescue plan and a stark expression of the investor fear that is spreading without regard to borders.

"This is global, and this is the downside of globalization," said Stephen Wood, senior portfolio strategist with Russell Investments.

Source: http://www.usatoday.com/money/markets/2008-10-06-world-markets-us-link_N.htm