Equity Markets slump as credit crunch starts to bite

According to the Financial Times there are some concerns at the liquidity of certain funds held by some banks.

This is causing a bit of panic equity selling. The European Central Bank has stepped in with a massive 94 billion Euro intervention, the largest since the September the 11th 2001 terrorist attacks. There must be some concern there.

I suspect equities (shares) are going to fall a bit more. So you will see things like the FTSE 100, Dow and so on fall a bit.

The problem we have is that there is very little room for manouver at the treasury. It is already borrowing far too much considering we are in a period of economic growth, to fund public spending. If tax receipts go down too far whilst unemployment rises we will have a bigger problem.

The economy of the world has got the jitters. Lets hope it does not last.