Wall Street panic rolling over consumers worldwide
By Michael Conlon
CHICAGO (Reuters) - A London businessman may have to put off his wedding. A baker in Paris fears customers will disappear. A student in Slovenia sees an automobile loan fall out of reach. And a real estate agent in Chicago says she's just plain scared.
The worst financial crisis since the 1930s was stark reality for millions on Wednesday as retirement savings evaporated, jobs disappeared, stock market values slipped again and a dramatic cut in interest rates by central banks from Europe to Asia did little to stem three weeks of near panic.
The Dow Jones Industrial Average sank another 2 percent on Wednesday, closing 189 points lower at 9,258.
Over the past 12 months, more than $12.4 trillion of global stock market wealth has been wiped out, as measured by the MSCI main world equity index. More than a third of that loss -- about $4.6 trillion -- has come in just the past three weeks as credit market turmoil deepened after the bankruptcy of giant U.S. investment bank Lehman Brothers.
What the International Monetary Fund termed a major downturn for the world economy was already evident to many, like the elderly Illinois couple who said this week they'd stashed $100,000 in cash fearing a bank failure or U.S. automobile dealers hit with the worst sales slump in 15 years.
"I'm scared, really scared," said Cathy Ivcich, 45, a Chicago real estate agent. "People have stopped buying houses. I've got a lot of buyers who have secure jobs or who have money, and I'm sure I could get them a loan. But they're just scared. Their feet are stuck."
She's stopped going out to dinner and "all those canned goods in the pantry, we're trying to find a way to use them," she said.
In London 39-year-old Neil Taylor worried whether the money he's earned from his scaffolding business is safe in the bank, and he may take it out. In the meantime he's cut back spending and is "thinking about putting off my wedding." Continued...