Dow drops below 10,000 as confidence remains shaky; Iceland looks to Russia for bailout loan; Car bomb in Bangkok; Iraqis close to US troop deal; and more

Top of the Agenda: Market Woes Worsen

Steep market declines have refocused attention on what is rapidly emerging as a severe global crisis of confidence in financial markets. The Dow Jones Industrial Average suffered heavy losses yesterday, dropping below the 10,000 mark (WSJ) and falling nearly 8 percent at one point, before regaining some of those losses in a late-day bounce. Asian and European markets had a mixed open (BBC) this morning in volatile trading.

The New York Times reports fears of a major global recession are growing and says just days after the United States passed a $700 billion bailout deal it looks like a "pebble tossed into the churning sea." The Washington Post reports the U.S. Federal Reserve is considering making loans to a wider range of businesses beyond the financial sector after saying yesterday that it would inject an additional $900 billion into the banking system to try to thaw credit markets.

Meanwhile, problems in Europe continued to bubble. With a succession of EU countries announcing individual rescue plans, the Wall Street Journal reports on greater call for a coordinated response to the crisis threatening the bloc's financial system. Iceland, one of the countries hardest hit due to its highly developed banking sector, says it has arranged for a 4 billion euro ($5.43 billion) bailout package from Russia, though the FT reports Russia thus far has denied reports of the loan.

Background:

• In a new interview with CFR.org, economist Nouriel Roubini discusses the near-term market outlook and what needs to be done to free up credit markets.

• A new Daily Analysis looks at financial firestorms erupting across Europe.

• A panel of experts continues its discussion of the geopolitical implications of the current market turmoil in CFR Forum.

 

Pacific Rim: Thailand Unrest

Following a clash between political protestors and police, a suspected car bomb (BBC) in Bangkok killed one person as tensions mount in Thailand's political standoff. The Bangkok Post reports that members of the People's Alliance for Democracy party have locked themselves inside parliament and demanded that the prime minister dissolve the House of Representatives by day's end.

China: Xinhua reports on government efforts to increase supervision of China's dairy industry and restore confidence in milk products following a recent health scare.

 

Elsewhere

Iraqi foreign minister says U.S. troop deal close at hand.

Russia's call to action on credit crisis; Medvedev says coordinated plan to come.

This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.