Global Rate Cut

"Wall Street stocks on Wednesday extended their worst five-day run of losses since 1987 after the co-ordinated global interest rate cut failed to calm nerves during a highly volatile session. "
-FT

Bank of America off another 7.7 per cent to $21.95 after the group priced 455m shares at $22

Stock futures jumped immediately after global central banks announced the cuts. “At last, a co-ordinated show of force,” said Ian Shepherdson of High Frequency Economics. “The move is to be applauded but there is more to come . ”

VIX up 7.3 per cent to 57.58, the highest level since the credit crisis began.

The SEC confirmed that its short ban imposed last month would be lifted last night, as planned.

Good news at least for now.

Legg Mason fell 13 per cent on Wednesday to $25.25, after Moody’s cut the debt rating on the money manager.

American Express was among the biggest winners earlier in the session after Sanford C. Bernstein initiated coverage on the stock with a “market perform’’ rating and said the credit card group stands to increase market share. It later reversed the gains to stand 4 per cent lower at $27.12.

Morgan Stanley – which sank as much as 39.9 per cent in the previous session on speculation that Mitsubishi UFJ Financial Group’s planned $9bn investment might not materialise – rose 4.8 per cent to $16.80. Morgan Stanley and Mitsubishi reiterated that the deal would go ahead.

Bank of New York Mellon climbed 7.9 per cent to $24.45 after agreeing to buy JPMorgan Trust Bank in Japan.

On the morning that Gordon Brown, UK prime minister, said he was prepared to do “whatever it takes” to ensure the stability of the banking system – raising the spectre of a soaring public debt – sterling held surprisingly steady.

As markets closed, after an assortment of central banks had combined for the first ever truly global rate cut, it was only fractionally down against the dollar and the euro.

Because of the global rate cut, no change in price. Will that mitigate inflation across the globe?

Could it be good news that this is a global problem?

In Japan, the Nikkei 225 fell 9.4 percent, the largest single-day loss since the Black Monday market crash in October 1987, and now is down more than 40 percent over the past year. Markets in Hong Kong dropped more than 8 percent, and those in Singapore and South Korea were down 6 percent and 5 percent respectively.

-Washington Post

In Europe, officials in London unveiled an $87 billion plan to infuse capital into the country's major banks, partially nationalizing one of the world's major financial centers. But major European indexes still plummeted in morning trading, falling anywhere from 3.5 percent to almost 6 percent. The losses follow a 5 percent drop in the Dow Jones industrial average on Tuesday, and pessimistic comments from Federal Reserve chairman Ben S. Bernanke about the state of the economy.

-Washington Post

Oil dropped below $90 a barrel as the raw materials sector was battered by the ongoing storm sweeping global financial markets.

The price of copper capped a torrid third quarter on Friday with the second largest weekly fall for the benchmark London Metal Exchange three-month contract, 11.8 per cent to $5,977.5 a tonne.

-FT