US markets plunged again last night: the Dow was down 7.33%, the Nasdaq fell 5.47% and the S&P 500 lost 7.62%.

The Australian market played follow the leader this morning, losing 7.5% in the first 90 minutes of trade. It was down around 6.3% at 12.45pm. 

Japan’s Nikkei 300 fell 3.03%.

Hong Kong’s Hang Seng returned a positive result, climbing 3.31%.

France’s CAC index shed another 1.55%

Germany’s Dax dropped 2.53%

The UK’s FTSE 100 was down 1.21%

Switzerland’s Zurich Swiss Market fell 4.52%.

Argentina’s Merval index fell 5.05%

And the good news: Russia, Portugal and Norway were all up.

How the pundits see it

Recession, yes. Depression? Don’t bet against it. The US and advanced economies’ financial system is now headed towards a near-term systemic financial meltdown as day after day stock markets are in free fall, money markets have shut down while their spreads are skyrocketing, and credit spreads are surging through the roof. There is now the beginning of a generalized run on the banking system of these economies; a collapse of the shadow banking system, i.e. those non-banks (broker dealers, non-bank mortgage lenders, SIV and conduits, hedge funds, money market funds, private equity firms) … – Nouriel Roubini

Seven Days in October. Every year, when Oct. 19 approaches, people speak darkly of the crash. On that day in 1987, the Standard & Poor’s 500-stock index fell 20.5 percent. This is the crash of 2008. After the 1987 crash, the New York Stock Exchange put in circuit breakers to assure that there could never be another day like that. The market will close before prices fall that far. But so far in October — after only seven trading days — the S.&P. is down 22 percent. The only other time since the Depression that there was that large a fall within seven days was in 1987. – Floyd Norris, New York Times

Dramatic action, subdued reactions. The global market’s reaction to Wednesday’s dramatic moves by central bankers wasn’t as bad as you may have read. It was worse. Not only did major equity markets relinquish their tepid gains in response to the coordinated interest-rate cuts by the Federal Reserve and other central banks, but Treasury securities’ yields shot up in the wake of a sudden, unscheduled onslaught of a fresh supply of notes. Those new issues likely will help fund the recently passed $700 billion financial rescue plan, which evidently is cost-free. – Barrons

Easy Money Causes Bubble; Easy Money Cures Bust. Haven’t we seen this movie before? Central bank runs easy monetary policy. Easy money inflates asset bubble. Central bank tightens monetary policy. Asset bubble bursts. Central bank runs easy monetary policy to offset effects of burst bubble. Easy money inflates bubble. This movie played in first-run houses and in rerun during Alan Greenspan’s 18-year tenure as Federal Reserve chairman. – Bloomberg

If not Buffett for treasury, then who? Warren Buffett recently said that the next president’s choice for treasury secretary is more important than his choice for vice president, but candidates haven’t said much about their potential picks, aside from Buffett, of course, who was singled out by both candidates in Tuesday’s debate as a good choice. Buffett, who is a supporter of Sen. Barack Obama, may be unlikely to accept, according to his hometown paper, so who else might be good for a job that is growing more and more essential to the functioning of the economy every day? – Wall Street Journal

Peter Fray

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