On the heels of weekend trouble at European banks, markets in Asia and Europe are selling off this morning. At the weekend, we learned that Hypo Real Estate, a finance behemoth in Germany with $700 billion in assets was feared to collapse. Later the German government rescued the bank and guaranteed all German private savings deposits, a sum the German blogger egghat informed me amounts to 568 billion euros (update 6 OCT 2008 1130 ET – the Bundesbank now claims this figure is $1,6 trillion).
The French and Belgians stepped into the European meltdown breach as well selling the Belgian-Luxembourg portion of failed Dutch-Belgian Fortis to French bank BNP Paribas. Whether this will count as a bankruptcy in the Credit Default Swaps market, I do not know.
And Denmark got into the act as well, guaranteeing all bank deposits.
Nevertheless, stock markets, at a minimum, are getting hammered. I haven’t looked at the credit markets yet. The FTSE in London is down over 3%. The DAX in Germany is down over 5%. The CAC-40 in Paris is also down over 5%. In Asia, the Hang Seng, the Nikkei and the Straits Times indices all closed down over 5%. And Dow Futures are trading down over 250 points right now.
So, brace yourself for a rough ride today. It could get ugly.
Related posts
Germany: banking system collapse possible due to Hypo Real Estate
The Germans guarantee all savings deposits
BNP takes over Dutch-Belgian bank Fortis
Denmark gets on the deposit guarantee train: all aboard!