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To: Logain Ablar who wrote (45028)	10/6/2008 6:33:06 AM
From: Johnny Canuck	Respond to of 70980

European shares fall sharply as banks dive By Sarah Turner, MarketWatch Last update: 6:14 a.m. EDT Oct. 6, 2008Comments: 59LONDON (MarketWatch) -- European shares staggered on Monday, with banks slumping as governments in Europe didn't match a $700 billion bailout package from the U.S. and instead continued to shore up institutions on a piecemeal basis. The pan-European Stoxx 600 index (ST:SXXP: news, chart, profile) fell 5.1% to 248.27, with a 6.9% drop for the banking index. "It's all down to what's going on in the banking sector or perhaps what's not going on in the banking sector," said Peter Dixon, strategist at Commerzbank Corporates & Markets. "This is markets in pure panic mode. The financial system is seizing up and I think that there are major counterparty-risk fears out there in the market. Investors are cutting risk left, right and center," he said. "Investors are dumping commodities, they're dumping equities. Anything with a cyclical or a risk-based element in the returns is somewhere not to be," he added. The share move follows an extraordinary weekend in which Germany backed its retail deposits, Iceland reportedly tried to hammer out a plan to rescue its distressed banking industry and the Danish financial sector agreed on a two-year guarantee scheme with the government to shore up confidence. But a Paris meeting Saturday of top EU leaders -- French President Nicolas Sarkozy, German Chancellor Angela Merkel, British Prime Minister Gordon Brown and Italian Prime Minister Silvio Berlusconi -- offered no pan-European plan for dealing with troubled banks. See full story. Policy action from individual governments followed more corporate distress. The German government orchestrated an extension of Hypo Real Estate's (DE:802770: news, chart, profile) bailout to 50 billion euros. Hypo shares fell 32.5% in Frankfurt on Monday. Read more on Hypo. Read more on German guarantee. Fortis (FORSY:FORSY News, chart, profile, more Last: Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: FORSY, , ) (NL:30086: news, chart, profile) also came in for another rescue effort a week after a coordinated government bailout of the lender. BNP Paribas's (BNPQY:BNPQY News, chart, profile, more Last: Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: BNPQY, , ) (FR:013110: news, chart, profile) (FR:013110: news, chart, profile) shares dropped 3.5% as it reached a deal to take control of Fortis's (NL:30086: news, chart, profile) operations in Belgium and Luxembourg, as well as the international banking franchises, for 14.5 billion euros ($19.8 billion). Holland's government nationalized the Dutch bank activities of Fortis. Fortis shares weren't trading. Read more on banks. Shares in UniCredit (IT:UCG: news, chart, profile) dropped 12.3% in Milan after announcing a 6.6 billion euro recapitalization plan that will include issuing shares in lieu of dividends and 3 billion euros in convertible securities. See full story. Overall, the German DAX 30 index (DX:1876534: news, chart, profile) fell 5.4% to 5,485.92, the French CAC-40 index (FR:1804546: news, chart, profile) dropped 5.5% to 3,855.67 and the U.K. FTSE 100 index (UK:UKX: news, chart, profile) slumped 5.6% to 4,700.81. U.S. stocks were pointing to another day of losses on Monday, with Friday's poor jobs data offsetting news that the $700 billion bank-rescue plan was passed. Miners and oil companies were also performing poorly in Europe as worries about global economic growth continue to build. Shares in Rio Tinto (RTP:RTP News, chart, profile, more Last: Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: RTP, , ) (UK:RIO: news, chart, profile) fell 10%, while shares in Eni (IT:ENI: news, chart, profile) dropped 5.4%. Sarah Turner is a markets reporter for MarketWatch in London. E-mail Print Disable Live Quotes Subscribe to RSS Yahoo! Buzz Recommend this story : 3 Save and tag this story Comments: 59 I don't think even the emerging markets are a shelter from this storm. Truly the Federal Reserve and men like Greenspan, Paulson, Bernanke and the others at Goldman Sachs & Company have driven the U.S.A. and maybe the entire world to the brink o... - noah3 Add Comment

To: Logain Ablar who wrote (45028)	10/6/2008 8:48:17 PM
From: Johnny Canuck	Read Replies (3) \| Respond to of 70980

We may have made a short term bottom here if the over emphasised fear that Cramer usually puts forth is any indication. In his words the sky is falling and the end of the financial world is near. I don't disagree with the call for a recession, but it does not go down in one day and does not go down in a straight line. **************************************** Cramer: Dow Could Drop Another 14%, Oil's Going to $50 by SA Editors From Jim Cramer in New York magazine (emphasis added): What will New York look like a year from now? The answer: bad and probably worse, and perhaps downright catastrophic. Three degrees of awful. The first step was passing the bank-bailout legislation. Now that it’s done—and if it didn’t get done we would have been looking at a guaranteed economic collapse—the critical issue will be presidential leadership. And while any president will be an improvement over the current one, there is a growing belief on Wall Street that Barack Obama has the capacity to lead us out of this wilderness while John McCain does not. I’ll go a step further: Obama is a recession. McCain is a depression... At this time next year, I could see the Dow as low as 8,300. That’s more than 40 percent off its October 2007 high of 14,164. On Main Street, that means a further slowdown in consumer spending, as buyers feel poorer, and another hit for 401(k) and college savings accounts. For Wall Street, it means more bank closures and mergers and still more layoffs. The two remaining independent commercial banks–née–investment banks, Goldman Sachs and Morgan Stanley, will have to fight mightily to remain independent. The bet here is that Goldman makes it but Morgan Stanley succumbs to one of the four emerging megabanks—Citigroup, JPMorgan, Bank of America, and Wells Fargo... In terms of investing between now and next fall, I’d buy the stocks of only companies you can’t not use—Kellogg’s, General Mills, Kraft, P&G. You can’t trust anything to do with financial paper—there’s still too much uncertainty (if a bailout bill does pass, at what price will the toxic bonds be marked?). And commodities have been bid up too high—demand soared as investors sought shelter from stocks—to buy for some time. Oil’s going to $50 on weaker demand; when it gets there, we can revisit the oil stocks.