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The week Wall Street capitulated

In October the credit crunch finally devastated global equity markets as investor panic threatened to bring down all but the very strongest banks. Alex Chambers was pounding the sidewalks of New York just as the crisis entered its most tumultuous period and perhaps its denouement.

IT WAS AN inauspicious start to the week of October 6: Hank Paulson had finally got his Troubled Assets Relief Program and yet there was no relief to the sell-off in stocks – far from it. US stocks sold off the previous Friday despite Congress finally agreeing to contribute to the administration’s $700 billion begging bowl. Could it be that the bowl was not big enough?

Waking in the wee hours in New York – as is the way for the traveller from London – the early morning news programmes were fevered in tone. Worse was surely to come given London’s awful opening, hardly a surprise given that the price action from Asia was so bad: in Japan the Nikkei was down 511 at 10427 while the Hang Seng hung low at 17090, off by 593 – the UK’s Footsie was to end that day 391 points lower.

Even the adverts offered no respite from the awful tales of the ticker tape and fears of systemic risk. "Worried that your Wall Street broker is no longer sound? Then let us take their place – we’re the largest independent broker, we have $1 billion of capital and no structured credit, sub-prime or leveraged loan exposure for you to worry about! Call us now on..."

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