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CREDIT CRISIS SPREADS WORLDWIDE AS STOCKS CRUMBLE
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The Bush/Cheney/McCain administration has now infected the world with its greed and credit virus and despite the attempt at international cooperation ~ the short list of countries facing near-term collapses in credit markets is growing. Look for the Dow to retreat much further ~ for the full extent of this crisis will not be known until after election day : Allen L Roland
Here is the short list of countries facing near-term liquidity crises and collapses in credit markets, according to a "guidance document" of the private intelligence company Stratfor: Estonia, Latvia, Lithuania, Hungary, Iceland, Bulgaria, Sweden, Greece, Italy, Russia, Ukraine, Mexico, Brazil, Argentina, Venezuela, Pakistan, Vietnam and South Korea. http://www.ufppc.org/content/view/7999/
It has been said that when America sneezes ~ the world catches a cold but in this case ~ America has caught the flu and the world has developed pneumonia !
And it isn't just the smaller countries as Martin Weiss points out in Money and Markets ~ " Even bigger countries, like India, are running into trouble. Overseas funds dumped a record $12 billion of Indian shares so far this year. Foreign exchange reserves have dwindled by $42 billion as the Indian rupee has imploded. It recently slumped from 39.20 against the dollar to 49.50 ~ a record low.
Bottom line: The credit virus is now spreading its sickness to the four corners of the world.
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| Iceland's stock market has all but collapsed as the credit virus spreads worldwide. |
What it means back home
Some pundits have made a big deal about the recent improvement in certain domestic and developed market credit indicators. The gains stem from the Federal Reserve's and Treasury's largesse, as well as the banking bailouts being put into effect in continental Europe, the U.K. and Canada, among other places.
But the improvements have been minor when compared to the hundreds of billions of dollars in aid that has been thrown at the markets. There are also disturbing signs that the aid isn't getting at the core of the problem ~ the housing market.
One indicator of ongoing weakness there: The latest Mortgage Bankers Association figures on home loan applications. The group's index, which tracks demand for home purchase and refinance loans, plunged 17% in the most recent week. The purchase application sub-index is now plumbing depths not seen since October 2001, a sign that housing demand remains anemic.
All of these problems are now coming home to roost ~ again ~ in the U.S. stock market. The Dow plunged 232 points on Tuesday and another 514 points on Wednesday and 312 on Friday." http://www.moneyandmarkets.com/the-credit-virus-spreads-worldwide-2-27718
Look for the Dow to retreat much further ~ for the full extent of this crisis will not be known until after election day.
Allen L Roland http://blogs.salon.com/0002255/2008/10/25.html
Freelance Online columnist and psychotherapist Allen L Roland is available for comments, interviews, speaking engagements and private consultations ( allen@allenroland.com )
Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on www.conscioustalk.net
Cartoon courtesy of Tom Toles / Washington Post
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