On Sunday, in what seems to be another desperate move, the Fed announced a new series of emergency measures to cope with the financial crisis. The discount rate - that is, the rate at which banks can borrow from the Fed - was lowered to 3.25% from 3.50%; new financing facilities were made available to banks; the sale of Bear Stearns to JP Morgan was approved with financing provided by the Fed.
Despite these measures and probably fearing that more bad news about banks are in the pipeline, overnight in Asia stock markets opened severely down and so did US stock futures. The dollar fell to 1.58 per euro, the lowest ever, and to 97 against the yen, the lowest in twelve years. Gold jumped above US$1020 per ounce. European and US stock markets are set for a very ugly session on Monday.
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