Financial Crisis Update: Monday, October 6, 2008

by Advisor Products Inc. 10/6/2008 6:00:00 PM

Global equity markets retreated again today as investors indulged fears that not even the world’s top government bankers will be able to shore up the credit markets and stave off recession. The blue-chip Dow industrials fell 369 points, cracking the 10,000-point barrier for the first time since 2004, and other major indices fell 3% to 4%. The market did show some resolve, however, gaining over 400 points from the session's low in the final hour and 15 minutes of trading. Once again, bond markets served their traditional role as a relatively safe haven from stock market volatility. Treasury yields sank even further as demand for government debt pushed prices upward yet again. For more, please read:http://money.cnn.com/2008/10/06/markets/markets_newyork/index.htm

World Holds Breath For Bank Bailout Now that Congress has ratified the $700 billion emergency bank rescue package and President Bush has signed it into law, Treasury officials are already hard at work to put the controversial plan into practice before global credit markets freeze over. Few of the central figures involved in the bailout expect that the next few weeks will be completely free from setbacks, but in the meantime investors around the world can at least hope that the plan works.

Investing In The Post-Bailout Future Noted finance professor Jeremy Siegel says few people are happy that the Treasury has had to resort to such extreme lengths to stimulate lending, but he also notes that the $700 billion rescue plan “can be a plus” for taxpayers and investors if executed properly. But what exactly is the government buying with that $700 billion and how will the plan work? In clear language, Prof. Siegel lays out the parameters and what’s at stake.

Digging Into The Job Numbers After the initial shockwaves from Friday’s labor report, economists are putting together a more balanced picture of what the numbers imply. American businesses may be trimming their payrolls, but wages are still edging higher, which indicates that skilled workers are still in demand. And due to the impact of Hurricane Ike and other events, the final revision to the numbers may end up telling a very different story – the revised July numbers were less gloomy than economists had expected, for example.