Wall Street Teeters, the Empire and China Shake
by TRNN

Markets nosedive, recession spreads, world financial system shaken.

 

Markets in New York were rocked again on Wednesday as anxieties about the financial system ran high after the government's bailout of insurer American International Group left investors with little confidence in many banking stocks.

 

The Dow Jones industrial average nosedived about 450 points, down more than 800 points or 7 percent so far this week. The market was more unnerved than comforted by news that the Federal Reserve is giving a two-year, 85 billion dollar loan to AIG in exchange for a nearly 79.9 percent stake in the company, which lost billions in the risky business of insuring against bond defaults. With the markets rattled, waiting to see who the next victim could be, shares of two other major financial firms Morgan Stanley and Goldman Sachs, sank 24 percent and 14 percent respectively.

Bio

Doug Henwood is the founder and editor of the Left Business Observer. Henwood is also a contributing editor of The Nation and does a weekly program on WBAI radio, New York's Pacifica outlet. His book, The State of the USA Atlas, was published by Simon & Schuster in 1994; his Wall Street was published by Verso in 1997 (paperback, 1998) to great acclaim