[Pen-l] When catastrophists sound reasonable

[Louis Proyect <lnp3@xxxxxxxxx>]

http://www.marxist.com/panic-in-world-markets.htm
Panic in world markets
By Alan Woods
Friday, 10 October 2008

Panic has gripped the stock markets of the world. Things are completely 
out of control, and there is nothing that governments can say or do that 
can stop it. As in 1929, every time people thought that the worst had 
come, further falls were just round the corner. Nobody knows how far 
share prices have still to go. The world economy now finds itself in 
unsheltered waters. "We're way beyond fundamentals," said Chris 
Orndorff, head of equity strategy at Payden & Rygel, in Los Angeles. 
"This is just pure panic, that's all it is."

Photo by publik16 on flickrNobody has the slightest idea of where all 
this is going or how it will end. But all the lights are flashing red. 
Today on the London stock markets all shares were sharply down, even 
shares like pharmaceuticals, which might be considered safe. Yesterday 
in the U.S., the Dow Jones Industrial Average fell below 9,000 for the 
first time since 2003. There were similar falls across Europe - Paris 
was down 8.4% while Germany was down 9.1%. Trading in the Vienna market 
was suspended until Friday afternoon. The smug Russian bourgeois who 
imagined they would not be affected by the world crisis have had a rude 
surprise with the sudden fall in oil prices. In Moscow the stock market 
remains suspended because of excessive volatility.

US stocks are on track for their worst year since 1937. "I've never seen 
a panic like this," said David Wyss, chief economist at Standard & 
Poor's. "I've seen stock market drops, but not an overall panic." 
Today's Washington Post writes: "Fear and foreboding took hold Thursday 
on Wall Street, as the market again plunged and investors became 
convinced that the nation is on the verge of a deep and prolonged 
recession." The huge $700 billion package that was intended to get 
inter-bank lending moving again has signally failed in its objective. 
The three-month rate at which banks lend dollars to each other (known as 
Libor) has risen to 4.8%.

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