What To Expect Today?

by Chris Sturr | October 24, 2008

From Nouriel Roubini

…I was accused yesterday of being alarmist arguing that policy makers may have to shut down financial markets. But today Friday Asian markets and in free fall and European markets are also in free fall. And US equties futures have fallen so much today before the US markets have opened that trading in the S&P futures index and the DJIA futures index has already been suspended in Europe as these indices reached their daily limits of a 5% drop. So it has taken only one day for my prediction that markets will be shut down to start to be realized. If – as possible -the free fall will continue today once US markets open then automatic circuit breakers on the S&P 500 may be triggered and trading may be stopped; and if – as likely – the capitulation panic continues today and in the next few days authorities may be forced – as I argued yesterday – to close down financial markets for a week or more in the next few days. We have reached the scary point where the dysfunctional behavior of financial markets has destructive effects on the financial system and – much worse – on the real economies. So it is time to think about more radical policy actions and government interventions of the type I discussed in my London talk yesterday (see the video below that may be worth to watch in its entirety of 48 minutes).

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