The worst financial crisis in 80 years has severely impacted emerging markets, leading to emergency measures by central banks and calls for international assistance to prevent further investor panic. In the United States, Wachovia Corp reported a record $23.9 billion loss in the third quarter as it prepares to be acquired by Wells Fargo & Co. Emerging market stocks, debt, and currencies have all been affected as investors pull out funds due to concerns about the global economy. Despite efforts by authorities to stabilize the financial system, fears of a global recession persist. Hungary raised interest rates by three points in an attempt to protect its currency, the forint. Belarus's central bank has requested credit from the International Monetary Fund, while Ukrainian Prime Minister Yulia Tymoshenko anticipates substantial financial aid from the IMF for her country next week. The IMF is also prepared to assist Pakistan, which is facing a balance of payments crisis, and Iceland, whose banks have failed due to frozen credit markets. Neil Dougall, chief emerging markets economist at Dresdner Kleinwort, noted that capital is now shifting back from emerging markets to developed markets, despite the fundamentals remaining stable. Various officials expressed optimism about the financial crisis despite some ongoing problems. Governments worldwide have implemented rescue and liquidity packages amounting to billions of dollars. U.S. Treasury Undersecretary David McCormick predicted a challenging few quarters for the U.S. economy, but suggested a potential recovery late next year. Bringing confidence back to the financial market is crucial, according to McCormick. Bank of England Governor Mervyn King, a key figure in Group of Seven nations' discussions on the crisis, believed that the worst may be over for the financial system, although stability is still a long way off. The strategy to restore the financial strength of our banks, both domestically and internationally, is likely to be viewed as the turning point in the recent banking crisis. This positive outlook was reinforced by a decrease in U.S. dollar short-term funding costs in London and Asia, indicating that banks are starting to rebuild trust in one another. Russia, a growing economic force, also showed signs of progress in bank lending, with interbank lending gradually returning to normalcy and interest rates on the decline. Banks have resumed lending to sectors, but First Deputy Prime Minister Igor Shuvalov stated that it will take two to three weeks for the situation to improve. Despite efforts to combat financial collapse, the main concern is the worsening global economic climate. The Bank of England's recent meeting minutes revealed a significant decline in the UK economy, with Governor King suggesting that the country may be facing its first recession in 16 years. These concerns have caused turmoil in financial markets. Wall Street seemed poised for a rough start as Dow Jones industrial average futures dropped 259 points, or almost 3 percent. European shares were also down by over 4.4 percent, while Japan's Nikkei average closed 6.8 percent lower. In emerging markets, MSCI's sector index hit its lowest point since June 2005, and sovereign debt spreads widened to over 700 basis points beyond Treasury yields for the first time since early 2003. Apart from the forint, other currencies were also struggling, with the Turkish lira hitting a more than two-year low and South Africa's rand at its lowest point in over six years against the dollar. Sanjay Mathur, an economist at the Royal Bank of Scotland in Singapore, expressed concerns about the challenges that may arise from a business cycle downturn, which he predicted could be quite severe. A variety of US companies reported their quarterly results on Wednesday, offering a glimpse into the state of different industries in the world's biggest economy. Tobacco companies Philip Morris International and Reynolds American Inc, along with fast-food chain McDonald's Corp, exceeded analysts' expectations with their profits, providing some positivity in an otherwise challenging environment.