Confidence in the global economy plunged in October after a deepening freeze in financial markets increased the chances of a recession, a survey of Bloomberg users on six continents showed.Third quarter numbers are coming in and they are dismal, and while it took trillions to get us through this heart attack, the economy is still in the ICU.The Bloomberg Professional Global Confidence Index fell to 4 from 11.3 in September, the lowest reading since the survey started in November. Sentiment dropped the most in Asia and Europe and was weakest in Japan. The results reflect responses from 3,764 Bloomberg users in more than 100 countries.
Stock markets slumped the most since at least 1970 last week as concerns about a potential collapse of the banking system reverberated through the world economy. That's sapping confidence just as the U.S. and Europe hurtle toward recession, forcing central banks to slash interest rates in tandem and governments to rescue financial institutions.
``There's a vicious circle developing between the financial sector and the real economy,'' said Martin van Vliet, an economist at ING Group in Amsterdam, who took part in the survey. ``Further economic weakness is certainly in the pipeline.''
Bloomberg users from Dubai to New York posted responses to the survey between Oct. 6 and Oct. 10 after the U.S. Congress's decision to approve a $700 billion rescue plan for banks. The U.K. unveiled plans to buy stakes in banks as well as lending guarantees on Oct. 8. The survey didn't reflect a decision by euro-region governments on Oct. 12 to back similar measures.
Numbers will continue to drop long term. We've given back half of Monday's gains. We'll give back more. I wouldn't be surprised if this was a down week by Friday afternoon.
[UPDATE] Dow closes down 733 to 8,577, and in 2 days that huge Monday gain is now gone in a flash.
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