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Analysis: markets will trash anything moving | Seven days that shook the world | Having faith in Iceland | Icelanders wake up | West Ham ‘up for grabs’ | Russia's big spenders lose billions | Fed bailout fears grow | Fund management battered | UK companies locked out of Landsbanki accounts | Comment: Gerard Baker
A frenzied day of panic selling on stock markets across the world capped a week of extraordinary financial mayhem in which £2.7 trillion was wiped off the value of shares globally.
Finance ministers and central bank chiefs from the West’s leading economies attempted last night to quell the markets’ fears with moves to shore up their banking systems and prevent a full-scale meltdown of the world financial system. Such was the level of panic, however, that officials gathered in Washington were forced to contemplate the previously unthinkable: that Britain’s enfeebled banks may face outright nationalisation if Gordon Brown’s £50 billion bailout fails.
As stock markets on both sides of the Atlantic suffered record-breaking falls, ministers and central bank governors from the Group of Seven leading economies strove to piece together a united plan to avert financial cataclysm. In a statement last night the G7 said that the present, extreme situation “calls for urgent and exceptional action” and pledged to make decisive collective moves to stabilise markets. The G7 agreed to “take all necessary steps” to unfreeze paralysed money markets, and ensure that banks could secure new capital “in sufficient amounts to reestablish confidence”.
The US led other leading economies in moving to follow Britain’s scheme to inject capital into their banking systems. Henry Paulson, the US Treasury Secretary, announced that Washington would soon use part of America’s $700 billion (£400 billion) emergency bailout fund to take ownership stakes in vulnerable US banks. The German Government is also working on a similar scheme, it emerged.
The moves came after the Dow Jones industrial average opened on Wall Street yesterday with an 8 per cent plunge. It rose later in the day, but closed 1.49 per cent down at 8,451.
In London, the FTSE 100 index closed down 381.7 points, or 8.9 per cent, at 3,932.1, succumbing to its second-biggest points loss ever. The FTSE 100 has now had 24 per cent of its value wiped out over this week.
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The end game is one world currency. Get ready for your bar code and chip implant. And don't worry sheep, the chips and bar codes will come in many varieties just like your tumor creating cell phones. In fact, you will compete for best barcode just like your tatoos and filthy body maiming jewelry.
wayne, Hanover, usa
Even now there will be hope if the focus is on redefining our needs and interests (to free from robotic high energy life style) instead of pumping public money to the irresponsible bankers.
Pandi, chennai, india
Decisive action - sack Brown and Bush - face the fact that £10 trillion debt in the US and £ 1.2 trillion debt in the UK underlies the problem. [Why does no organisation mention this ?]
Send a signal to the market to be confident that no inept leaders will be allowed to run important economies
Dave Roy, Wellingborough, England
How can any of you say "Well said Matt!" when he doesn't even say who "They" are?
If They are Labour - agreed.
If They means the markets, no, the markets are working perfectly well, and would be perfectly moral too if this damn government didn't interfere and immorally bail some investors out.
Laura Roberts, London, UK
@ Matt,
Well said,
The inherent contradictions of ruthless accumulation by few super rich on the name of market economy would drown the ship of capitalism. What would happened with developing countries, if G-8 nations are not able to contain the repercussions of financial meltdown.
Manzoor, Peshawar, Pakistan
Well said Matt!
However we never even had the money. Just consumer credit which enabled the prices to reach artificially high levels and the government to tax our consumption. The businesses benefited immensely as well from providing credit facilities to help us pay the extortionate prices!
Arthur, Edinburgh, UK
Well said Matt!
However we never even had the money. Just consumer credit which enabled the prices to reach artificially high levels and the government to tax our consumption. The businesses benefited immensely as well from providing credit facilities to help us pay the extortionate prices!
Arthur, Edinburgh, UK
Those within the leading economies will find the money necessary to ensure capitalism does not fail. The people will foot the bill as we all know. Regulation will be tightened then relaxed when trust remerges. Then human nature will prevail, 10 years and the system will require public bailout.
Dan, West Sussex,
I noticed that over the last few days the BBC particularly has been raising the prospect that Gordon Brown is the man to lead us in the difficult financial times!! This is the man who allowed the mess to occur. 'Light touch regulation' coupled with 'Voluntary' codes of practice haven't worked PM.
Richie, Cardiff, Wales
Well said Matt!
However we never even had the money. All we had was credit which essentially enabled the prices to reach artificially high levels and the government to tax our galloping consumption. Big businesses benefited from providing credit facility to help us pay extortionate prices!
Arthur, Edinburgh, UK
They distroyed the family, then they destroyed the nation. That was followed by the destruction of beliefs and morals. All we had left was money. Sadly now, we dont even have that!!!
Matt, norwich,