The FTSE was down ten percent in the first ten minutes of trading, dropping below the 4,000 mark. The Times is calling it a "bloodbath" – although it has now stabilised with "only" a six percent drop.Japan's Nikkei index has also taken a dive of ten percent and its economy is catching the insolvency bug as the insurance company Yamato Life collapsed with debts of $2.7 billion.
The IMF has made available a $200 billion war chest for "needy governments" (the first time I have ever heard that phrase - "can you spare a billion, buddy!") as G7 government representatives, including Alistair Darling, gather in Washington to swap horror stories.
Interestingly, India's central bank has reacted to growing pressure on the country's currency by slashing the proportion of cash banks are required to keep in reserve from 9 percent to 7.5 percent, which will release about £6 billion into the banking system.
Our requirement is to maintain 8 percent. Prof. Tim Congdon has been suggesting for some time that we should drop it to six percent. But we can't do that – our friend the Capital Adequacy Directive again. This may be why Bloomberg is exuding confidence in the EU (not). "It took the European Union almost three decades to agree on what could legitimately be called chocolate," it observes. "That doesn't bode well for its handling of the worst financial crisis in its history."
Meanwhile, Tony McNulty, the employment minister, admitted that Britain was heading for a recession. Ministers said contingency plans were being drawn up to cope with large-scale unemployment, including more "rapid response" teams to be sent to the worst hit areas.
Commentators are saying the world is "on a knife-edge". And Gordon Brown says the rest of the world should follow "his" example. Funnily enough ... immediately after its headline report on the financial situation, the BBC Radio 4 Today programme ran a feature on "Dr Death" who is in London to promote his do-it-yourself suicide kit.
Is this what Brown means?
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