![]()
- Lesson From Dubai: Start Cutting Risk In Your Portfolio
- Iranian Seizure of British Yacht Pushes Oil Above $77
- Should Homeowners Be Able to Stop Paying Mortgage?
- Buffett's Predictions For Next Year—And Every Year
- The World's Biggest Debtor Nations
- Goldman Sachs Party Ban: No Gatherings of 12 or More
- Fed Tweaking Plan to Pull Money Back out of Economy
- Scientists Gone Wild: Climate Debate Turns Nasty
- Blue Nile CEO: Having 'Best Cyber Monday Ever'
- We're Approaching a Market Bubble: Portfolio Manager
- Hershey Shares: What Options Are Saying
- Nov. 30: Unusual Volume Leaders
- Why Careful Shoppers Are Great for the Box Office
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
- Best Online Retailers to Buy Now: Internet Analyst
- ESPN The Magazine’s Body Issue: A Financial Success
- Cyber Monday: The Last Vestige of Dotcom Hype
- Dubai Fear is 'Noise'—Stay Fully Invested: Strategist
MOST SHARED
- Timeless and Time-Tested Warren Buffett Watch Predictions
- Black Friday Sales Disappoint Investors; Amazon Up
- Governments Must Take Steps To Avoid More Dubais: El-Erian
- Goldman Sachs Party Ban: No Gatherings of 12 or More
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
- Nov. 30: Unusual Volume Leaders
- Get Paid Six Figures to Wear a T-Shirt?
- Oil Demand Sees Year-Over-Year Rise, First Since 2007
- BofA Aims to Clearly Spell Out Credit Card Terms
- Should Homeowners Be Able To Walk Away From Mortgage?
Markets around the world continued to be rattled by worries that the prolonged credit crisis has already pushed the global economy into a recession.
"Even Fed policymakers are saying the economy appears to be in a recession," Chris Rupkey, Bank of Tokyo-Mitsubishi economist, told CNBC.com. "And that is why the stock market has fallen more than 40% from the highs last year. It is discounting a recession if not outright depression."
![]() |
After getting an initial lift on Thursday from a tame report on inflation, US stocks soon nosedived but then rebounded in late trading as investors went bargain-hunting.
Stocks in Europe and Asia fell, while credit markets remained tight and oil prices declined to a 14-month low.
After more than a month of unprecedented government intervention to stem the credit crisis, it's unclear what policymakers can do next to calm markets.
One bright spot was that rates banks charge each other for loans mostly fell on Thursday in response to radical moves by central banks to provide liquidity, shore up banks and loosen credit lines to institutions needing cash.
Leaders of the world's top economic powers, the Group of Eight, said they would meet "in the near future" for a global summit to tackle the financial crisis. The group comprises the United States, Japan, Germany, France, Britain, Italy, Canada and Russia.
President Bush plans to speak on the financial crisis early Friday—before US markets open— at the US Chamber of Commerce headquarters across from the White House.
Officials said the speech wasn't intended to put forward new policy actions, but rather would give the nation a more detailed explanation of what the government is doing to combat the crisis.
The current financial crisis began more than a year ago in the United States when lax lending standards on certain home mortgages came home to roost. Foreclosures skyrocketed, mortgage securities soured and financial companies racked up huge losses.
"The whole cliche of Wall Street arriving on Main Street is so true now, with recession in the U.S., the UK, Europe and probably Japan, and significant slowing elsewhere," said Bernard McAlinden, strategist at NCB Stockbrokers in Dublin.
Treasury Secretary Henry Paulson said Thursday that he's not proud of the mistakes leading up to the crisis, but insisted the administration is pursuing the right course to end it.
Federal Reserve Chairman Ben Bernanke has left the door open for another rate cut, saying Wednesday that inflation pressures are moderating. But the Fed's emergency half point cut on Oct. 8, which brought its target short-term rates to 1.5 percent, did little to affect the actual rates banks charge borrowers and each other, which remain dramatically higher.
The availability of short-term commercial paper loans—which businesses use to buy raw material and pay workers—fell for the fifth straight week, according to the Federal Reserve.
"The market is just very worried about a severe international economic downturn," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney.
The U.S. economy is suffering from a litany of woes: falling wages, weak consumer spending, tight credit, slumping home prices and rising job losses.
While the number of new people signing up for unemployment benefits last week dropped, new claims still totaled 461,000—a figure associated with deep troubles in employment conditions.
Citigroup reported its fourth straight quarterly loss Thursday. The bank said it had cut 11,000 jobs in the third quarter, bringing its job cuts for the year to 23,000.
Coming economic data on housing, consumer spending, manufacturing and employment are "apt to show either stagnation at depressed levels or substantial further deterioration," Goldman Sachs economist Seamus Smyth said in a report.
The economy might not recover until 2010, Donald Kohn, vice chairman of the Federal Reserve, said Wednesday evening.
The plunge in stocks put the nation's economic anxiety front-and-center as the two major presidential candidates, Sens. Barack Obama and John McCain, squared off in their final debate Wednesday night in Hempstead, N.Y.
Earlier this week, after governments around the world announced plans to use trillions of dollars to prop up banks, including a U.S. plan to buy about $250 billion in bank stocks, the market appeared to be turning around—or at least calming down.
Paulson and Bernanke have expressed confidence that the government's radical efforts to stabilize the financial system and induce banks to lend again will eventually help the economy.
"Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away," Bernanke told the Economic Club of New York on Wednesday.
—AP and Reuters contributed to this report.
- Ever wished your cab driver would stop chatting and just get to where you're going? Well, that moment is closer than ever.
- UPS is giving its customers the option to offset its carbon emissions when sending a package.
- Romania's presidential campaign has been rocked by a video that may show the president striking a 10-year-old boy.
- Raising alligators is hard work, and the fickle taste of rich consumers has just made it much harder, says the NY Times.
- A recent issue of ESPN Magazine was one of its top sellers ever, and it only took scantily clad athletes to make it happen.
- The continued real estate boom in China is partially fueled by a generational flood of newlyweds.












