Equity Markets Deep Freeze; The NY Giants Won!

The temperature is 15 F here in the Northeast but that seems rather balmy compared to the arctic temperatures the world equity markets are ushering in this Monday morning. Overnight world equity markets are down 3% - 7%. Since the US markets are closed due to the Martin Luther King Jr. holiday there is no 'cash' trading but the US equity futures are mirroring the sharp declines with losses of around 3%.

My plan for today was to continue writing on the topic of counterparty risk. Counterparty problems popped up out of the wood work last week in so many directions it was hard to catch them all. Investment Bank Merrill Lynch wrote off $3.1 billion from their counterparty exposure, and insurers' problems mounted as ACA faced capital problems and ABK and MBIA faced credit ratings down grades. However the steep overnight decline in equity prices world wide will be my focus for today. Thanks to Yahoo Finance I was able to gather the data pretty quickly. Since declines like this don't happen every day I thought it worth while to document them in this space here.

Overnight Changes in Worldwide Markets (From Yahoo Finance):

Argentina Merval = -4.87%

Australia All Ordinaries = -2.91%

Brazil Bovespa = -5.07%

Shanghai = -5.10% (From article "Chinese Bank Shares Fall Sharply" - Yahoo Finance)

Hong Kong = -5.50% (From article "Chinese Bank Shares Fall Sharply" - Yahoo finance)

France Cac 40 = -5.09%

German Dax = -5.83%

India BSE Sensex = -7.41%

Italy = -3.59%

Japan = -3.86%

Singapore = -6.03%

Spain = -5.00%

UK FTSE = -3.61%

Ireland = -3.54%

* Disclosure: At the time of this report I hold no positions in the names mentioned here, the firm I advise may or may not have positions in the names mentioned here.

**********************************************************************************

On a lighter note the NY Giants (American football for you international viewers) won a classic NFC championship game last night in overtime. The game was played in -4 Degrees F with a windchill of - 30 F. A field goal won it in overtime and the Giants will now play in the Superbowl against the New England Patriots in 2 weeks.