No Time To Sit and Watch
What we have on our hands here, folks, is a full-blown, global financial crisis comparable to the junk bond collapse of 1987, the S&L crisis of 1990 or the Asian financial crisis of the late '90s.</br></br>On major stock exchanges, stock prices have fallen roughly 10 percent in a matter of weeks in volatile, high-volume trading. And in the past days, the sell-off has been extended to developing markets, where the declines have been even steeper.</br></br>The yen has recorded its biggest jump against the dollar since 1998 as traders unwind a massive "carry trade" that for five years had allowed them to profit by borrowing at 2 percent in Japan and lending at higher rates in places like the United States or Australia. Meanwhile, the Australian dollar recorded the sharpest declines since it started trading freely in 1983, forcing the central bank Friday morning to intervene in markets to stabilize the currency.</br></br>And so many investors are flocking to the safety of the U.S. Treasury that the yield on the three-month bill has fallen nearly three-quarters of a percentage point in just two days, the sharpest decline since the October 1987 stock market crash.</br></br>In Canada, a group of banks have gotten together to provide short-term credit to business after the freeze-up in the market for commercial paper.