Message: World Markets braced for further damage - Major U.S. Bank in trouble!
World markets braced for further damage
- Graeme Wearden
- guardian.co.uk,
- Tuesday August 19 2008
(excepts)
Stock markets around the world have fallen amid new fears that the credit crunch will cause further damage to the banking sector.
In London the FTSE 100 index fell 62.9 points in early trading to 5367.3, a drop of 1.15%, after heavy losses in Asia and on Wall Street overnight. Banks such as HBOS and Barclays led the London fallers, along with miners and energy companies, which were hit by concerns over the slowing global economy.
The global sell-off began last night in America, sparked by a report that the US government will have to step in to rescue Freddie Mac and Fannie Mae, leaving investors with almost nothing. Shares in the two massive mortgage finance firms plunged, with Freddie losing 25% and Fannie 22%.
According to Reuters, Rogoff, who was the International Monetary Fund's chief economist from 2001 to 2004, told a financial conference that he expected a large US bank to fail in the next few months.
"The US is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say the worst is to come," Rogoff said.
"We're not just going to see mid-sized banks go under in the next few months, we're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks," said Rogoff, who is now an economics professor at Harvard University.
http://www.guardian.co.uk/business/2...
http://www.guardian.co.uk/business/2...
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