FTSE drops again as recession fears grow
Published: 16 October 2008
By MoneyhighStreet Staff 1 Comment
Updated: 30 November -0001
The FTSE 100 fell sharply again today, wiping out the remnants of Monday and Tuesday''s rallies.
Growing worries that developing economies would be dragged into the economic downturn put downwards pressure on stocks, which are trading near five-year lows.
As of 16:26 BST, the FTSE stood at 3864.23 points, 215.36 points or 5.28 per cent down on the day.
Earlier, the Nikkei 225 had fallen by 11 per cent, the Tokyo bourse''s worst day of trading since 1987.
In the US, the Dow Jones has fallen by 2.16 per cent so far.
Speaking to Reuters, Marino Valensise, chief investment officer of Baring Asset Management, predicted further market turbulence, as fears of a global recession grow among investors.
"We are going from a situation in which the banks were the main actors in the crisis to a situation where the real economies will be next," he said.
"This is the end of the beginning."
With total world debt being well in excess of $100 trillion (personal, corporate, institutional and government) now and the US’s and UK’s total debt hovering towards $53 trillion and 9-times GDP respectfully, there is no wonder that we are at the start of a global recession. With such colossal figures of debt, amassed significantly over the last ¼ century and in total being between two and three years of total global economic output, we have many years to come of austerity and economic downturn to look forward to. Even worst is if we borrow even more like our politicians are doing and where we eventually end up like Zimbabwe, with hunger, lawlessness and socio-economic collapse? For the root problem is debt and common sense dictates that if we continue to borrow and borrow, eventually money becomes worthless. Therefore our politicians would be better using their time, efforts and power to start afresh and accept that the next decade is a period of fundamental change in how the development of the world proceeds. If not, they will definitely oversee the destruction of far more of what we see today than the 10-years of pain required to re-engineering the world order and crucial sustainable change. Indeed, in twenty-five years time if we do not change our development processes (capitalism, super-capitalism, globalization et al), we will look back and see that the financial crisis was just a mere storm in a teacup in comparison to what problems we shall have in 2033. The vision is of nightmarish proportions with substantially dwindling natural resources to sustain human life and climate change meeting head on with 8. 5 billion mouths to feed.
We have definitely to change for our own good to the economics of sustainability-need and to the preservation of the human experience itself
Dr. David Hill
World Innovation Foundation Charity (WIFC)
Bern, Switzerland