Morning Brief: Financial houses on sand

Top Story Mario Tama/Getty Images It was another ugly Monday on Wall Street and in markets around the world. The Dow Jones industrial average dropped below 10,000 points for the first time in four years, while the S&P 500 fell 3.85 percent. London’s FTSE suffered its largest points fall in history. All told, some $2.5 ...

592222_081007_dow5.jpg
592222_081007_dow5.jpg

Top Story

Mario Tama/Getty Images

It was another ugly Monday on Wall Street and in markets around the world.

Top Story

Mario Tama/Getty Images

It was another ugly Monday on Wall Street and in markets around the world.

The Dow Jones industrial average dropped below 10,000 points for the first time in four years, while the S&P 500 fell 3.85 percent. London’s FTSE suffered its largest points fall in history. All told, some $2.5 trillion in shareholder value was wiped out.

Now, according to the New York Times, the $700 billion U.S. bailout “looks like a pebble tossed into a churning sea.” Major, coordinated international action may be needed to shore up confidence.

Credit markets remained nearly frozen as British lenders sought emergency funding and Iceland nationalized Landsbanki, its No.2 bank.

“Deceleration of growth and deteriorating financial conditions, combined with monetary tightening, will trigger business failures and possibly banking emergencies,” warns World Bank President Robert Zoellick.

Nearly 60 percent of Americans believe a “depression” is likely.

Even the pope is weighing in, saying yesterday, “He who builds only on visible and tangible things like success, career and money builds the house of his life on sand.”

Decision ’08

John McCain, taking a harsher line against the Democratic nominee yesterday, asked, “Who is the real Barack Obama?” His running mate, Sarah Palin, also got rough.

Republican strategist Mike Murphy is not impressed.

Obama is taking the lead in the key swing state of Ohio.

Americas

In Brazil, wiretapping is becoming a tool of first resort.

Tijuana’s notorious Arellano Felix drug cartel is being massacred. But by whom?

Asia

Even Burma is now warning its people to stay away from Chinese dairy products.

China is suspending military and diplomatic exchanges with the United States.

Thai police used tear gas at a mass rally against new PM Somchai Wongsawat.

A suicide bomber killed at least 20 people in Pakistan Monday.

Middle East and Africa

In Saudi-brokered talks, the Taliban is said to be severing its ties to al Qaeda.

The Arab League is dispatching an envoy to Iraq in a sign of warming relations.

Iran is building a car especially designed for women.

Europe and the Caucasus

Britain’s climate-change watchdog wants the country to nearly end its use of fossil fuels for power in 20 years.

The U.S. military will remain in Kosovo through 2009.

Plucky Georgia is falling short when it comes to press freedoms.

Today’s Agenda

U.S. President George W. Bush speaks on the economy at 1:45 p.m. ET.

The U.S. presidential candidates hold their second of three debates at 9 p.m. ET.

The boards of World Bank and the International Monetary Fund begin their annual joint meetings in Washington.

Yesterday, Lehman Brothers CEO Richard S. Fuld Jr. got an earful before the House Committee on Oversight and Government Reform. Today, it’s former AIG chief Maurice R. Greenberg’s turn.

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