A black Monday for European shares which slumped to six-year lows. London fell over five percent and Milan more than six percent.
Financial stocks were the biggest losers with HSBC down 19 percent. Among the factors, a record loss at embattled insurer American International Group which spurred worries that the already deep financial crisis is worsening. There were also comments from billionaire investor Warren Buffett that “the economy will be in shambles throughout 2009.” In addition, EU leaders failed to reach any meaningful agreement on a rescue package for eastern Europe. Oil prices were in free fall as the deteriorating world economy threatened to reduce fuel consumption.