The most severe financial crisis in 80 years has severely impacted emerging markets, leading to emergency actions by central banks and calls for international assistance to prevent investors from fleeing. In the United States, AT&T Inc and Boeing reported disappointing earnings, Merck & Co announced job cuts, and Wachovia Corp suffered a record $23.9 billion loss in the third quarter. Emerging market stocks, sovereign debt, and currencies experienced significant pressure as investors liquidated positions due to concerns about the weakening global economy. Despite efforts by authorities to stabilize the financial system, fears of a global recession persisted. Hungary raised interest rates by three percentage points in order to protect its currency, the forint. Belarus's central bank requested financial assistance from the International Monetary Fund, while Ukrainian Prime Minister Yulia Tymoshenko anticipated significant financial aid from the IMF for her country. The IMF is also prepared to assist Pakistan and Iceland, as they face financial challenges. Neil Dougall, chief economist for emerging markets at Dresdner Kleinwort, noted that capital is now shifting from emerging markets back to developed markets. Optimism appears to be overshadowed by various officials' positive outlook on the financial crisis, despite the challenges it poses. U.S. Treasury Undersecretary David McCormick mentioned that the U.S. economy may face difficulties in the coming quarters but could potentially see recovery by late next year. Mervyn King, governor of the Bank of England, also indicated that the worst may be over for the financial system. Bringing confidence back to the financial market is crucial in this situation. He mentioned on Tuesday that we still have a long way to go before reaching stability. However, the plan to strengthen our banking system, both domestically and internationally, will likely be recognized as a turning point in the banking crisis of the past year. This was supported by a decrease in U.S. dollar short-term funding costs in London and Asia, indicating that banks are starting to rebuild trust among themselves. Russia, a strong emerging market that has been heavily impacted by the crisis, also reported improvements in bank lending, with interbank lending returning to normal levels. The rates are decreasing after being high, and banks are beginning to lend to sectors again. However, First Deputy Prime Minister Igor Shuvalov stated that it will take two or three weeks for the situation to improve, according to the Financial Times. Despite efforts to combat financial collapse, there is a looming fear of recession due to the deteriorating global economic climate. Minutes from the Bank of England's recent meeting indicated a significant decline in the UK economy, with Governor King suggesting it may be entering its first recession in 16 years. Financial markets were filled with concerns, leading to a poor start on Wall Street. Dow Jones industrial average futures were down 259 points, European shares dropped over 4.4 percent, and Japan's Nikkei average fell by 6.8 percent. Emerging markets were also affected, with MSCI's sector index hitting its lowest point since June 2005. Sovereign debt spreads widened beyond 700 basis points over Treasury yields for the first time since early 2003. Various currencies, excluding the forint, experienced declines, with the Turkish lira reaching a low not seen in over two years and South Africa's rand dropping to its lowest level in more than 6 years against the dollar. Sanjay Mathur, an economist at the Royal Bank of Scotland in Singapore, stated that we will need to address the challenges of a business cycle downturn, which is likely to be quite severe. Various US companies reported their quarterly results on Wednesday, providing a glimpse of the economic conditions in different industries and sectors in the world's largest economy. Although tobacco companies Philip Morris International and Reynolds American Inc, as well as fast-food chain McDonald's Corp, exceeded analysts' expectations with their profits, they were exceptions in an otherwise gloomy picture.