Subscribe to Print Edition | Wed., October 08, 2008 Tishrei 9, 5769 | | Israel Time: 01:36 (EST+7) web haaretz.com   Back to Homepage Haaretz Toolbar Diplomacy Defense Jewish World Opinion National Print Edition Car Rental Books Haaretz Magazine Business Real Estate Easy Start Travel Week's End Anglo File

Last update - 01:34 07/10/2008 The crunch has come By Eytan Avriel Now we know: Every country in Europe has its own financial skeletons in the closet. After failing to create a pan-European rescue a la America's $700 billion bailout, each country is trying to solve its own troubles alone. Germany is looking at a $50 billion rescue of its second-biggest lender. Italy is trying to shore up Unicredit, its biggest bank. Similar drives are underway from Belgium to Iceland to Greece. Advertisement Generally, the European answers are not like America's: Instead of a giant kitty to buy sick assets, they involve capital injections into rickety banks, whether government money or through mergers. But just as in the United States, investors and savers are losing faith. Germany's Angela Merkel vowed to guarantee the public's deposits, but the public was not wowed. Iceland is talking about national bankruptcy and wondering if anybody will come to its rescue. The credit crisis is worsening. And the markets are reacting. Yesterday, Europe's investors dumped bank stocks at any price. Dozens of financial institutions lost vast value and sent the exchanges into a downward spiral. Stock exchanges from Asia to Latin America lost 10% and more, their sharpest drops in 20 years. Tel Aviv stocks were surprisingly resilient, but when Wall Street started with losses, local sanguinity evaporated. Local indexes lost as much as 6% before rallying, to a degree. These days, Tel Aviv indexes are not being affected by local events much: They are dancing to the tunes of Germany and Wall Street. The crisis in global banking is not the end of the story. Yesterday, it emerged that the crisis has spread to the rest of the economy. The global economy is sinking into recession. The evidence is everywhere. Industrial and service companies cannot find financing, and if they do, they are paying sky-high prices. Companies, even those that deal in commodities or staples, are lowering their revenue and profit forecasts. Leaders, including U.S. President George Bush, admit that the trouble has hit small business. The German software giant SAP published an earnings warning and its stock crashed, losing 17% in a day. Now the crisis is here. It is reaching all companies, all workers, all consumers. Nobody can rule out any scenario, any collapse - or any need for government intervention. Bookmark to del.icio.us   Asleep at the wheel Sharon told 1973 probe that IDF top brass was clueless in Yom Kippur War. Laughing at Hitler Clips parodying film The Downfall make their way onto the Web.

Read & React Security officials: Time running out on deal for Shalit release Responses: 100 Lebanese union to sue Israel for 'claiming ownership' of falafel Responses: 138 Avi Primor: It's time for the IDF to leave the West Bank Responses: 66 The Holocaust, Tarantino-style: Jews scalping Nazis Responses: 55 Hamas: Jewish Lobby in U.S. to blame for global financial crisis Responses: 178 More Headlines 21:40 Olmert wins no firm pledge from Russia on arms sales to Iran, Syria 00:54 Footage shows freed terrorist Kuntar training with Hezbollah 23:16 Trailing in polls, McCain seeks to gain ground on Obama in second debate 01:21 Experts offer tips on how to make the Yom Kippur fast a bit easier 16:28 Hamas: 'Jewish Lobby' in U.S. to blame for global financial crisis 19:50 VIDEO / YouTube pranksters have Hitler raving about Obama, Xbox 20:30 Settlers to Barak: Don't give PA security control of Hebron 01:30 Newborn heads home to Gaza Strip, leaving mother in coma in Israel 01:04 Surprise rate cut lifts TASE; real estate stocks jump 20 percent 22:59 Angola seeks to halt Gaydamak's Paris arms trafficking trial 19:47 Ariel Sharon told 1973 probe: IDF top brass was clueless in Yom Kippur War 22:02 Deputy FM protests gov't delays in funding of Druze sector 16:24 Dutch lawyers seek arrest of Minister Ayalon for 'war crimes' 20:36 Food giant Tnuva fined NIS 55m for adding silicone to milk 13:25 Israeli security officials: Time running out on Shalit deal Previous Editions Select Day 07 oct 06 oct 05 oct 03 oct 02 oct 01 oct 30 sep 29 sep 28 sep 26 sep 25 sep 24 sep

Special Offers Advertisement Fattal Hotel Chain Perfectly located hotels on best resorts of Israel. Dial 013 for your long-distance calls and get all your money back US CITIZENS Vote for real change. Request your ballot today! Eldan Rent a Car Israel's leading car rental company offers you a 20% discount on all online reservations Jewish Singles Personal Ads Find the love of your life on JDate.com Israel's Premier Real Estate Website www. israel-property.com Hebrew Summer courses From $39.95 Junkyard Junk a car - get free towing nationwide and a tax-deductible receipt

Home | TV | Print Edition | Diplomacy | Opinion | Arts & Leisure | Sports | Jewish World | Underground | Site rules |

Real Estate in Israel | Travel to Israel with Haaretz | Hotels Israel | Restaurants Israel | Tourist attractions Israel | Shops Israel

birthright Israel | Search engine marketing

Haaretz.com, the online edition of Haaretz Newspaper in Israel, offers real-time breaking news, opinions and analysis from Israel and the Middle East. Haaretz.com provides extensive and in-depth coverage of Israel, the Jewish World and the Middle East, including defense, diplomacy, the Arab-Israeli conflict, the peace process, Israeli politics, Jerusalem affairs, international relations, Iran, Iraq, Syria, Lebanon, the Palestinian Authority, the West Bank and the Gaza Strip, the Israeli business world and Jewish life in Israel and the Diaspora.

© Copyright  Haaretz. All rights reserved