And someone is just noticing now that the economy is in turmoil?
"...a risk of a global and dramatic economic meltdown cannot be ruled out..."
–seems a bit hyperbolic to me. After a tragic event like 7/27, one would expect the markets to drop. But they'll bounce back.
Only 90 shopping days till Christmas, after all.
From yesterday's Asia Financial Week–
GLOBAL ECONOMY IN CHAOS
The worst terrorist attack in history –carried out earlier this year on a series of Southeast Asia targets by anti Globalization, right wing militia– has created escalating chaos in global financial markets. As a result, exchanges are paring down operations while investors panic. Additionally, in light of a nervous Muslim population in the United States and grumblings abroad, the U.S. dollar has plunged against other major currencies.
U.S. financial regulators are not declaring a market emergency for the time being, but trading is likely to be disrupted on an intermittent basis for several days at a time. This move suggests that the U.S. dollar will not play its traditional safe-haven role, although the Fed has said that it will provide as sufficient liquidity as necessary. But given the potential and probable further disruption to the U.S. financial system, the knee-jerk reaction will be to get out.
In terms of safe-haven assets, gold has already received a boost. The Bank of England gold auction is still set for tomorrow, but given the chaos in global markets, it is thought likely to be cancelled.
Meanwhile, the Indonesian Rupiah is rising against the dollar. The most immediate reaction is in oil and gas markets with the Muslim and South East Asian connection as tension heightens. With these attacks increasing tensions in the region, a risk of a global and dramatic economic meltdown cannot be ruled out.
© 2006 Asia Financial Week