I don't think that depression is what is going to happen... but holy smokes, we were just getting our acts together financially after the last governance snafu... and this sub-prime shit happens?
and now this. These americans are starting to irritate me:
US wrangling and mutual collapse sparks new market fall - Yahoo! Canada News
WASHINGTON (AFP) - Deadlocked talks on a bailout of the US financial system and the collapse of Washington Mutual bank sparked new falls on global markets Friday despite the injection of tens of billions of dollars by central banks.
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Democrats accused Republican White House contender John McCain of sabotaging a 700-billion-dollar rescue package, which President George W. Bush has said is crucially needed to save the US economy from a prolonged recession.
Pressure on markets increased with the collapse of Washington Mutal, the biggest US bank failure, which was taken over by JPMorgan Chase for 1.9 billion dollars.
Washington Mutual's shares have fallen 85 percent this year and Standard and Poor's credit ratings agency recently estimated it had some 14.4 billion dollars in debt.
Key stock markets fell because of doubts about the US rescue package and the collapse. Tokyo's benchmark Nikkei-225 index closed down almost one percent.
Shortly after the open, London's FTSE 100 index and the Paris CAC 40 were both down 1.71 percent. Frankfurt's DAX 30 lost 1.46 percent.
US shares had rallied on Thursday amid hopes for a rescue deal , but before talks broke down. The Dow Jones Industrial Average rallied 1.82 percent and the Nasdaq composite jumped 1.43 percent.
With hopes dented, the US Federal Reserve and central banks in Europe and Asia pumped tens of billions more dollars into money markets which analysts say are under extreme tension, and to shore up general market sentiment.
The European Central Bank and the British and Swiss central banks used reciprocal currency arrangements to inject 13 billion dollars.
The Bank of Japan pumped a total of 1.5 trillion yen (14 billion dollars) into the Tokyo money market. South Korea announced plans to pump at least 10 billion dollars into the foreign exchange swap market to ease dollar shortages.
Hundreds of billions of dollars have been used to stabilise markets since the collapse of Lehman Brothers and the forced takeovers of American Insurance Group and Merrill Lynch in the deepening sub-prime crisis.
President Bush met McCain and Democratic presidential contender Barack Obama as well as top Democratic and Republican lawmakers at the White House, but failed to clinch a deal.
"We are in a serious economic crisis in the country, if we don't pass a piece of legislation," said the president.
Senior lawmakers had announced the outlines of a deal to rescue Wall Street, but some Republicans dragged their feet.
Democrats called for limits on pay for executives whose companies get rescued under the government deal. And they said that any deal must include strict oversight by federal regulators.
After the White House meeting, Senator Harry Reid, leader of the Democratic majority, held new late-night discussions with Treasury Secretary Henry Paulson and Federal Reserve chief Ben Bernanke.
These also broke off without an accord and were to reconvene Friday.
Democrats said that McCain's intervention only made the negotiations more difficult.
McCain "only hurt the process," Reid told a joint news conference with Senate banking committee chairman Christopher Dodd.
Barney Frank, the Democratic chair of the House of Representatives financial services committee, said: "I think this was a campaign ploy for Senator McCain."
The crisis has sparked mounting international political concern.
Germany's Finance Minister Peer Steinbrueck warned that "the United States will lose its superpower status in the global financial system" as a result of the crisis that has humbled some of the greatest names in US finance.
French President Nicolas Sarkozy called for an overhaul of the world's financial system and warned that the global financial crisis would hit French growth and jobs.
"The crisis is not over, it will have lasting consequences. France is too involved in the world economy for us to think for one second it could be sheltered from the events currently rocking the world," he said.
UN Secretary General Ban Ki-moon said the crisis now threatened the world's most vulnerable populations as well.
"The current financial crisis threatens the well-being of billions of people, none more so than the poorest of the poor," he said.
On top of the Washington Mutual collapse, the finance world was also hit by news that banking giant HSBC is to cut 1,100 jobs worldwide.
Around half of those losing their jobs would be in HSBC's British operations, Hong Kong-based spokesman Gareth Hewett said.
"The steps we have taken today are in the light of the current global business and economic environment and our cautious outlook for 2009," he said in a statement.