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Fears of deeper recession grow, markets in tailspin
Signs of a sharp slowdown in Europe and a barrage of profit warnings and job cut announcements from companies around the world intensified fears of deep global recession on Friday.Stock markets slid across the globe, currencies experienced almost unprecedented volatility, and oil and other commodities tumbled on fears of plummeting demand that would accompany a global economic slowdown. "I would characterize this as a shell-shocked mentality out there," said Thomas di Galoma, head of government bond trading at Jefferies & Co. in New York. "It's all the deleveraging of equities ... It's causing an issue for everyone." The economic crisis prompted further U.S. government intervention: Officials stepped in to help finance the sale of ailing Cleveland-based National City Corp and prepared to announce 20 more banks will receive capital injections. Speculation about a bailout of the U.S. auto industry also increased as General Motors has intensified negotiations to buy Chrysler's auto operations, intending to seek U.S. government aid to support any deal, people familiar with the talks told Reuters. Chrysler said it was slashing about 5,000 white-collar jobs and industrial conglomerate ITT said it would also cut an unspecified number of positions. Many analysts declared recession in Europe after reports showed the private sector economy in the 15 euro zone countries on track for its worst performance since the recession of the early 1990s. Britain's economy experienced a much deeper-than-expected 0.5 percent contraction in the third quarter, its first contraction in 16 years, making a recession all but inevitable. Posted by: Fred 2008-10-25 |
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