The most severe financial crisis in 80 years is causing turmoil in emerging markets, leading to emergency actions by central banks and calls for international assistance to prevent investor panic. In the United States, companies like AT&T Inc and Boeing reported disappointing earnings, while Merck & Co announced plans to cut 7,200 jobs. Wachovia Corp, a struggling US bank being acquired by Wells Fargo & Co, suffered a record $23.9 billion loss in the third quarter. Emerging market stocks, debt, and currencies are all facing significant pressure as investors react to concerns about the global economy. Despite efforts by authorities worldwide to stabilize the financial system, fears of a global recession are still looming large. Hungary increased interest rates by three percentage points to protect its currency, the forint. Belarus requested credit from the International Monetary Fund, while Ukrainian Prime Minister Yulia Tymoshenko anticipated significant financial assistance from the IMF. The IMF is also prepared to assist Pakistan and Iceland, which are facing economic challenges. Neil Dougall, chief emerging markets economist at Dresdner Kleinwort, noted that capital is shifting from emerging markets to developed markets. Despite the problems, officials expressed optimism about the financial crisis, with U.S. Treasury Undersecretary David McCormick stating that the U.S. economy could start to recover late next year. Mervyn King, governor of the Bank of England, also suggested that the worst may be over for the financial system. The goal, according to McCormick, is to restore confidence in the financial markets. He mentioned on Tuesday that we still have a long way to go before stability is fully restored. However, he expressed confidence that the plan to strengthen our banking system, both domestically and internationally, will be recognized as a turning point in overcoming the banking crisis of the past year. This optimism 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 in one another. Russia, a growing economic power, also reported progress in bank lending, with interbank lending returning to normal. The rates, although high, are beginning to decrease as banks resume lending to various sectors. According to First Deputy Prime Minister Igor Shuvalov, it will take two to three weeks for the situation to start improving. However, there is a looming fear of a recession due to the deteriorating global economic climate, despite progress made in preventing financial collapse. The Bank of England's recent meeting minutes mentioned a substantial deterioration in the UK economy, with Governor King suggesting that the country may be entering its first recession in 16 years. Financial markets were hit with worries leading to a poor start for Wall Street, as indicated by the significant decreases in Dow Jones industrial average futures, European shares, and Japan's Nikkei average. Emerging markets also experienced challenges, with MSCI's sector index dropping to its lowest point in over a decade and sovereign debt spreads widening. Additionally, several currencies, including the Turkish lira and South Africa's rand, suffered losses against the dollar. Sanjay Mathur, an economist at the Royal Bank of Scotland in Singapore, stated that the challenges of a business cycle downturn will likely be severe. Various US companies reported their quarterly results on Wednesday, offering a glimpse into the state of different industries and sectors in the world's largest economy. Despite some companies like Philip Morris International, Reynolds American Inc, and McDonald's Corp surpassing analysts' expectations with their profits, they were seen as exceptions in an overall bleak economic outlook.