The markets in Asia, led by the Nikkei in Tokyo, are in full-blown retreat this morning as Wall street’s slump last night turns into a financial rout worldwide.
Tokyo fell by more than 11 per cent in less than an hour’s trading, with South Korea and Australia down nearly seven per cent.
European markets open shortly, and there are fears they will also head south as the perfect financial storm gathers strength. Worries about recession also drove the price of oil down further, to just over 82 dollars a barrel, a new 12-month low.
Investors seem to be giving a thumbs down to the massive central bank interventions in the market, which have failed to uncrunch credit, and are selling shares and buying into safe havens, like government bonds and gold.
With credit in such short supply, there is also a movement into cash, but with none available for industry or consumers, a big rise in unemployment now seems unavoidable.
The economic circle is getting ever more vicious by the day.