Great...just in time for my trip to Europe... GuardianUK: (h/t Gregory) Central banks on both sides of the Atlantic pumped billions into the financi
August 9, 2007

Great...just in time for my trip to Europe...

GuardianUK: (h/t Gregory)

Central banks on both sides of the Atlantic pumped billions into the financial system to calm nerves over an impending credit crunch today - but their actions only served to heighten alarm, prompting a fresh plunge in global share prices.

The European Central Bank injected an emergency €95bn (£64.5bn) into the markets in its first intervention since the turmoil triggered by the 9/11 terrorist attacks on New York and Washington DC in 2001.In America, the Federal Reserve added $24bn (£12bn) in temporary reserves to the US banking system to shore up liquidity and bring down short-term interest rates, while the Bank of Canada mounted a similar operation.

The moves, however, seemed to fuel a sense of crisis over defaults in America's mortgage lending industry which are causing a ripple effect through the banking industry as much of the debt is bundled up and sold on.

On Wall Street, blue chip shares suffered their worst day for four months as the Dow Jones Industrial Average plummeted by 387 points to 13,270. Stock prices swung wildly and trading volumes hit an all-time record with 2.8bn shares changing hands. Of the Dow's 30 component stocks, 29 ended the day lower.

Bonddad looks at the problems with hedge funds and recommends this post to wade through the hype of conflicting information on the status of the market.

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