Spring Break
U.S. stocks fall again, following plunge in Asia, Europe
Kevin G. Hall and Dion Nissenbaum - McClatchy NewspapersIssue date: 10/9/08 Section: Real News
"One of the biggest lessons of the Great Depression is that countries only acted in self-interest and if countries act in self-interest the chance of failure is much higher," said Jon Danielsson, an economist at the London School of Economics. "There is an increasing realization that the way out is for the large industrial nations to act with a single voice."
Finance ministers of the seven most industrialized nations - the so-called G-7 - meet today in Washington under great pressure to craft more than a communique and a photo opportunity.
Treasury Secretary Henry Paulson on Wednesday promised to call a meeting of the developed and rapidly developing emerging markets, who are sometimes called the Group of 20, or G-20. Traders around the world are hoping for more interest rate cuts and coordinated moves to shore up the global banking system.
Stock markets around the world have lost a quarter of their value or more as a global sell-off widens. While there is an increasing sense of urgency, there is still no agreement among world leaders over what strategies will work.
Britain's proposal to effectively nationalize some of its banks by taking equity stakes in them is now gaining credibility in the United States and around the world. But some economists say more needs to be done.
"The problem at the moment is central banks have been a bit behind the curve," said George Buckley, the chief UK economist for Deutsche Bank. "They haven't been in front of the markets and it feels like they are always playing catch up - and that's the problem."
In other developments Friday:
-The Federal Reserve Bank of New York holds a summit with Wall Street moguls to discuss ways to create a clearinghouse for settling credit-default swaps. These are insurance-like products, a $55 trillion market that is completely unregulated. The Fed fears system-wide risk if big players who issued these insurance-like swaps begin to fail, and believes some sort of orderly and transparent settlement mechanism is needed.
-Oil prices fell to $81.76 a barrel in early morning trading, down almost $5, and in the weeks ahead that is likely to mean lower gasoline prices for consumers. Already, the nationwide average for a gallon of unleaded gasoline stood at $3.35, down from $3.66 a month ago, according to the AAA Motor Club.
Finance ministers of the seven most industrialized nations - the so-called G-7 - meet today in Washington under great pressure to craft more than a communique and a photo opportunity.
Treasury Secretary Henry Paulson on Wednesday promised to call a meeting of the developed and rapidly developing emerging markets, who are sometimes called the Group of 20, or G-20. Traders around the world are hoping for more interest rate cuts and coordinated moves to shore up the global banking system.
Stock markets around the world have lost a quarter of their value or more as a global sell-off widens. While there is an increasing sense of urgency, there is still no agreement among world leaders over what strategies will work.
Britain's proposal to effectively nationalize some of its banks by taking equity stakes in them is now gaining credibility in the United States and around the world. But some economists say more needs to be done.
"The problem at the moment is central banks have been a bit behind the curve," said George Buckley, the chief UK economist for Deutsche Bank. "They haven't been in front of the markets and it feels like they are always playing catch up - and that's the problem."
In other developments Friday:
-The Federal Reserve Bank of New York holds a summit with Wall Street moguls to discuss ways to create a clearinghouse for settling credit-default swaps. These are insurance-like products, a $55 trillion market that is completely unregulated. The Fed fears system-wide risk if big players who issued these insurance-like swaps begin to fail, and believes some sort of orderly and transparent settlement mechanism is needed.
-Oil prices fell to $81.76 a barrel in early morning trading, down almost $5, and in the weeks ahead that is likely to mean lower gasoline prices for consumers. Already, the nationwide average for a gallon of unleaded gasoline stood at $3.35, down from $3.66 a month ago, according to the AAA Motor Club.
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