It has, to paraphrase Margo
Channing, already been a bumpy night — and it’s only going to get bumpier today. The latest news is how the Asian markets have trembled at what’s happening in the West. Japan’s main stock
index is down 3.7 per cent. Australia’s is down 4.2 per cent. Hong Kong’s 5.3 per cent. And even oil futures joined in with the collective nosedive, which is continuing as the
European exchanges open this morning.
All of which adds to the catalogue of horror that was written yesterday. CoffeeHousers will read plenty of grim comparisons in the papers today, not least that yesterday’s plunge in the Dow Jones
was the worst since 2008. But FT’s Alphaville blog has another for you: that America’s S&P 500 index fell by more than "during the first trading day after Lehman
collapsed". This is clearly a momentous period for the global economy, and for our own.
What makes it worse is that there are no unambiguous paths forward. Indeed, these latest convulsions have come after two events which might, in theory, have restored some stability to the system:
the US debt deal and the renegotiation of Greece’s loans on 21 July. But in the case of the eurozone, and perhaps even in the case of the US, there is little confidence that these measures will
either be fully implemented or have the desired effect. And if Greece capitulates despite all the extra money that is being funnelled towards it, then what chance Spain? What chance Italy? What
chance that Germany and France will tap-dance away from further bailout packages for countries in need? Little wonder why Senhor Barroso is warning of the crisis taking deeper roots and spreading.
Then there’s the fact that the world’s public and private monies are still interconnected in the sorts of ways described by Robert Peston
last night — which throws up the terrifying prospect of Credit Crunch 2. Gordon Brown and Alistair Darling had to deal with one almighty crash during their time in office. It’s looking
increasingly likely that David Cameron and George Osborne will have to deal with one themselves, and without us having properly recovered from the last. A bumpy ride, indeed.
P.S. It’s as good a time as any to catch up with BSkyB’s share price which, after a short-lived rally, is now falling back below the levels it reached when Rupert Murdoch announced
his interest in a takeover last year: