Bank agony, money squeeze batter stocks, dollar
The Bear on Mar 19 2008 at 8:24 am | Filed under: Uncategorized
LONDON (Reuters) - Global stocks fell sharply and the dollar tumbled on Monday as a fire sale of Bear Stearns and an emergency Federal Reserve cut of a key lending rate sparked fears that a worldwide credit crisis will claim more casualties.
Traders reported that money markets were near standstill with banks increasingly wary of lending to each other.
European shares sank nearly 3.5 percent, following a sell-off in Asia where Japan’s leading indexes shed 3.7 percent. Wall Street looked set for a sharply downward open.
The dollar hit new lows against the euro and a basket six of major currencies. Oil hit a new high of nearly $112 a barrel on the weaker dollar.
Investors dived into safe haven assets, lifting gold to more than $1,030 an ounce at one point and sending yields on short-dated euro zone debt below 3 percent for the first time in more than two years.
“The markets are in a complete state of panic and in such situations there is no such thing as valuation or value in any asset,” said Michael Klawitter, FX strategist at Dresdner Kleinwort in Frankfurt.
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Global stocks, Bear Stearns, Federal Reserve, Wall Street, dollar hit new lows, $112 a barrel, foreign bond holders
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