Friday, October 10, 2008

Hic sunt dracones

This is not good. In fact, it is double-plus ungood. The situation is seriously unravelling. Little Gordie's EU-approved rescue plan is about to come unstuck.

This might explain why he has written to "EU leaders" to urge them to follow Britain in guaranteeing inter-bank loans, proposing a "European-wide funding plan" to help ease the financial crisis.

The chances are, he knows that the situation is deteriorating rapidly and even if he threw the whole of the UK's GDP at the problem, that would not be enough to hold the line.

Things don't look too happy across the pond either. According to The Independent, New York stocks crashed in their worst dive for 21 years. The Standard & Poor's 500 stock index was down nearly 7.6 percent and the Dow Jones industrial average was down 678.91 points, or about 7.3 percent. The Nasdaq composite was down 5.4 percent.

The White House announced yesterday afternoon that Bush would speak on Friday at 10 am in an attempt to reassure people on the economy. "Americans should be confident that every effort is being taken to stabilise our markets," said Dana Perino, the president's chief spokeswoman.

Perversely, yesterday's stock market decline came after the Treasury Department had signalled that it would move quickly to inject money directly into big financial firms in addition to buying up to $700 billion in troubled loans and securities from the companies.

All of a sudden, we look to be in completely uncharted waters. Hic sunt dracones, as they used to say.

  • Other posts on the financial crisis here.