Miserable Monday: Biggest FTSE crash since 9/11 wipes off more than £75bn in shares

[EV_Ares]

By BECKY BARROW and SAM FLEMING

Turmoil: Traders at the London Stock Exchange have seen the FTSE drop sharply since the beginning of January
The stock market went into meltdown yesterday with the biggest fall in share prices since 9/11.

More than £75billion was wiped off the value of Britain's 100 biggest companies amid fears of a recession in the U.S.

It is the worst start to the year for the stock market since records began in 1936 and left the Bank of England facing acute pressure to slash interest rates.

A quarter point cut to 5.25 per cent is already predicted at the next meeting of its Monetary Policy Committee in two weeks.

But yesterday's dramas took the need for action to a new level. With each day it is becoming clear that the credit crunch is worsening and the risk of a global slowdown increasing.

It is no longer a question of whether rates will be lowered but how quickly and how far. Some analysts expect a rate of 5 per cent or lower by the summer, providing much-needed relief to home buyers.

Link to entire article: http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=509489&in_page_id=1770&ct=5

[ben_meyers]

1. The U.S. sneezes, and the rest of the world

gets pneumonia. This is all starting to look like 1987 again, although the market here will have to drop by over 2500 pts. tomorrow to equal that.

The Australians are taking it in the shorts right now.

World economic situation serious: IMF

ALL developed countries are suffering from the slowdown in the US putting the world economy in a serious situation, IMF Managing Director Dominique Strauss-Kahn said overnight.

His comments came after world stock markets fell sharply and demand for safe-haven bonds and currencies soared on fears a slowdown in the US economy would be worse than expected.
”The situation is serious,'' he said. ”All countries in the world are suffering from the slowdown in growth in the United States, all countries in the developed world.''

He warned that emerging market growth could also be dragged down by the outlook in the US.

http://www.news.com.au/business/story/0,23636,23089495-462,00.html?from=mostpop