Sell-off on Wall Street
However, the incident, which saw the Dow drop close to 1000 points, shows how vulnerable world stock markets are right now.
Wake up Europe
The index ended down 347.8, or 3.2 per cent, at 10,520.32. The 998.5 drop was the biggest intraday fall ever. The S&P 500 lost 3.2 per cent and the Nasdaq 3.4 per cent.
Potentially, if Europe does not wake up to itself we could have a post-Lehman crash and credit crunch where no one wants to lend!
CNBC says “in the final 15 minutes of trading it was revealed that a trader at a major firm may have mistyped a trade as billion — instead of million — which made what would've been a 300-point sell-off more like a 900-point sell-off.”
Ironically, earlier in the day the European Central Bank left interest rates unchanged, which the markets did not like.
Not out of the woods
We are about to have a bad day on our stock market and the problems will continue until Europe grows up and addresses its procrastination. This is a failure of politics as much as it is an economic failure.
All of this underlines that both our Reserve Bank with its relentless rate rises and the Rudd Government with its premature attack on our best export sector — the miners — have failed to understand the global economy was not out of the woods. This is a matter of complacency meeting hubris.
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Published on: Friday, May 07, 2010blog comments powered by Disqus