Stock markets across Europe took a pounding this morning, following a dramatic market dive in Asia that saw the Tokyo exchange suffer its worst loss in 20 years. In London the FTSE opened down 10%, with similar losses in Paris and Frankfurt. Banking stocks were among the biggest losers in Europe.
All told the MSCI World Index, an average of global stock markets, suffered its worst week in history, falling by 19%. One major source of fear among investors is the unraveling of credit default swap positions in Lehman Brothers. Those could be worth up to $400 billion and could further depress a bear market.