Tuesday, September 30, 2008

'My advice to you is to start drinking heavily'

The official United States YouTube clip.
We just keep going to this one . . .
because it's so true. Contains profanity.

Dear World,

Hey! You f***** up!

You trusted us!

The Washington Post reports on markets and banks and economies (Oh, my!) in deep doo all across the world:

The turmoil that began on Wall Street now spans the globe.

Stock markets around the world cascaded lower Monday, European regulators announced the rescue of four major banks, and U.S. and foreign officials pledged to make hundreds of billions of dollars available to ensure that banks would continue lending to each other.

Yet the contagion continued. U.S. stocks opened weak, then fell off a cliff after the House of Representatives voted down a $700 billion plan intended to restore stability to the nation's wobbly financial system. That sent Brazil's stock market down 10 percent, prompting authorities in Sao Paulo to temporarily suspend trading, amid worries of a deep U.S. economic slowdown.

In the seldom-interrupted cycle of global financial markets, the extraordinary pace and scale of events brought an abrupt end to the confident attitude displayed by European officials as recently as last week, when officials claimed that shareholders and investors there had less to fear than their American counterparts because European banks weren't as heavily exposed to the troubled mortgage loans undermining the U.S. system.


In France, authorities had been worrying about a sell-off of the stock of Dexia, a Franco-Belgian bank catering to local governments. The bank's stock dropped by more than a third in early trading Monday, then recovered slightly on a pledge from Belgian Foreign Minister Didier Reynders to step in with government funds if necessary.

The Paris newspaper Le Figaro said a U.S. subsidiary of Dexia, the bond insurer FSA, had caused concerns among investors because of involvement in shaky real estate mortgages in the United States.

Several analysts said the European banking problems are biggest at institutions with heavy exposure to European property bubbles. Millions of homeowners and developers took out loans against property that is no longer valued at what it was a few months ago.

Nicolas Véron, a research fellow at the Bruegel center in Brussels, said concern has risen about strains in the banking system spreading to the Baltic countries and Eastern Europe, where several nations also have experienced property bubbles.

"We knew this would happen, because the storm in the U.S. is so powerful," Véron said.

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