WASHINGTON // Stock markets plummeted still lower on Wall Street and around the world yesterday despite all efforts to slow the selling stampede. The globe's industrial powers urgently debated even more forceful actions to prevent a worldwide economic catastrophe. The Treasury Secretary Henry Paulson and the Federal Reserve Chairman Ben Bernanke met in Washington with their counterparts from the world's six other richest countries as a rout of financial markets showed no sign of letting up in the face of dramatic rescue efforts in the United States and abroad.
Stock prices hurtled downwards in the United States, Europe and Asia, even as George W Bush tried to reassure Americans and the world that the governments of the United States and other countries were dealing aggressively what has become a near panic. A sign of how bad things have got: A drop of 128 points in the Dow Jones industrials was greeted with sighs of relief after the index had plummeted much further on previous days. The week ended as the Dow's worst ever, with the index down an incredible 40.3 per cent since its record close almost exactly one year earlier, on Oct 9 2007.
Investors suffered a paper loss of US$2.4 trillion for the week, as measured by the Dow Jones Wilshire 5000 index, and for the past year the losses have totalled $8.4 trillion. "We're in this together, and we'll come through this together," Mr Bush declared at the White House as finance ministers and central bankers from the world's seven richest nations gathered nearby. "Anxiety can feed anxiety, and that can make it hard to see all that's being done to solve the problem."
On Wall Street, the Dow Jones industrials, already down 21 per cent for the week, dropped nearly 700 points more in the opening minutes but made up much of that fresh loss in the last hour of trading. The index finished down 128 points for its worst week ever. Britain's FTSE index ended below the 4,000 level for the first time in five years; Germany's DAX fell seven per cent and France's CAC-40 finished down 7.7 per cent. Japan's benchmark Nikkei 225 index fell 9.6 per cent, also hitting a five-year low. For the week, the Nikkei lost nearly a quarter of its value. Russia's market never even opened. Mr Bush made it clear the United States must work with other countries to battle the worst financial crisis that has jolted the world economy in more than a half-century.
"We've seen that problems in the financial system are not isolated to the United States," he said. "So we're working closely with partners around the world to ensure that our actions are co-ordinated and effective." The Dow dropped a little over 100 points while he was speaking. Fear has tightened its grip on investors worldwide even as the United States and other countries have taken a series of radical actions including an unprecedented, co-ordinated interest rate cut by the Federal Reserve and other major central banks. Besides the United States, the other members of the G7 - the Group of Seven - meeting in Washington are Japan, Germany, Britain, France, Italy and Canada. Finance officials also planned to meet with Mr Bush today at the White House.
An even larger group of nations - called the G20 - will meet this evening with Mr Paulson. How the world's finance officials and central bank presidents can better contain the spreading financial crisis also will dominate discussions at the weekend meetings of the 185-nation International Monetary Fund and the World Bank in Washington. IMF, which is the world's financial firefighter, urged countries to work together to come up with co-ordinated plans to make sure that squeezed banks and other financial institutions have access to both quick and longer-term sources of cash to help them weather the financial storm.
*AP
