Tuesday 22nd January 2008: 10.00 pm
Another highly volatile day in the markets, much as predicted below. In the USA, the Dow Jones Industrial average fell 400 points at the opening and there was a sudden announcement from the Federal Reserve of a 75 basis point (i.e.a 3/4%) cut in the target interest rate that stunned the markets and probably saved them for a major crash. The Guardian newspaper has an article called: Federal Reserve slashes US rates on day when 'chaos reigned supreme'. That just about sums it up.
The fall in the Dow followed the Japanese markets, which were spectacularly down both on Monday and Tuesday. Japanese Stocks Plunge in Biggest Two-Day Rout in 17 Years 22 Jan 2008 Elsewher, circumstances were similar: Australian shares in Freefall, and India’s Sensex tumbles 11.5% in early minutes, trade halted. That's enough bad news!
Oh, by the way, gold was steady.