Wall Street's Window Sills Becoming Crowded

New York's brokers are not flinging themselves into the Street, at least not yet. But they were pushing stocks from the windows all day yesterday after the jobless figures showed another alarming rise.

Coming up to Christmas (the politically correct Americans insist on referring to this Festival as "the holidays") there was blood on the Street yesterday as almost the whole of the NYSE turned red. In a new twist on "The Baby Blues" companies producing nappies and children's clothes picked up and these few stocks stood out in a sea of red. Grocers were OK leading up to Christmas but everything else, from retailers, the whole motor vehicle sector and all but one or two financial services businesses fell. The falls were not massive - typically around 1% of share values. It was how widespread the falls were that is causing concern.

What is going on? Pat Dade, who has provided background data and analysis for The Anti Money Laundering Network's consumer profiling tool Risk Values told World Money Laundering Report; Online "it's about how people see themselves and their future. Uncertainty means they don't spend money on discretionary items other than treats for the children at festivals." That explains the falls in the Ford, GM, Harley Davidson, etc. as well as most retailers. But what about those stocks that rose? "Sad and worried people have sex and that leads to babies. This isn't a difficult concept to read," says Dade.

Hit badly were banking stocks, ranging from blue chip to chipolata. No one in the financial services sector was safe from decline, including those who have already announced massive job losses.

The picture elsewhere was no more rosy: in the UK, reports of a further 2,000 job cuts at the UK subsidiary of Australia's troubled AMP surprised many. UK shares were unsettled by Barclays' announcement that its profits would be affected by its under-allocation of funds to bad loans.

And in Japan, the banking sector continues to stumble along as uncertainty there has led to several foreign banks ceasing lending operations.

This is going to mean a reflective fall as first Far East and then European Markets follow the US down. Even before Wall Street's shivers yesterday, Malaysia's KLSE was down almost across the board.

In Hong Kong, identified by World Money Laundering Report several months ago as over dependent on credit which was showing signs of turning bad, falling share prices are adding to the gloom. Where house prices have fallen, stock prices, which have had a gradual upward trend for several months, have been seen as the only glimmer of hope in an otherwise miserable financial market. And the share holding have been providing security for some lending. If those shareholdings now fall, then lenders are going to be more exposed to unrecoverable balances.

The cycle of bad debt leading to credit tightening leading to business failures leading to more bad debt is seemingly developing.

And this means an increase in financial crime, fraudulent loan applications and "creative accounting."