Snowmail: at the beginning of the beginning

Last Modified: 06 Oct 2008
By: Jon Snow

In tonight's programme...

Confused, baffled, worried, staggered as we have all been by the tumult, I do feel that we are still at the beginning of the beginning of this finance and banking crisis.

How do I know? Well, no-one KNOWS anything at all about the financial contagion that has swept Europe and now infected every stock market in the world. 7 per cent the average fall today or thereabouts, as I write.

Confidence has collapsed, shares in banks and other financial institutions appear to be in free fall... Iceland has suspended trading in financial stocks, the Russians have shut their market twice after it fell a staggering 15 per cent - poor oligarchs (not yet, I suspect)!

You saw it on Channel 4 News first: here

The cause? There is no natural, organic method by which banks can re-capitalise. Worse, no-one trusts any of them. Further, the reason they don't trust them is because they don't KNOW how bad their situation is. And if they do know, they may take fright about being open about it.

Take the German Hypo real estate bank. In deep trouble, the Germans managed to come up with a rescue plan last week - only to then have the bank ringing up over the weekend to say they had found another black hole of 25 billion euros.

This prompted German Chancellor Merkel last night to follow Ireland in declaring all savings guaranteed.

Only, it wasn't really clear if she had indeed followed the Irish route, or done something similar but different. Now she has had to clarify the position - or row back, perhaps - saying they will do everything they can to ensure no-one loses their savings. Which sounds more of a political guarantee than a formal specific mechanism.

The fear is that this catastrophe is heading 1929-wards. If it runs out of control, at risk would be the high street, pensions, savings - the lot. Politicians appear powerless to do enough to contain it - what are their options? We are riding the rollercoaster, at seven.

Watch today's Commons statement by Alistair Darling: here

CHALLENGING CORRUPTION

Also tonight, from Afghanistan, the story of the 30-year-old reporter who has challenged the corruption that is wrapped around the Afghan government and its associated warlords. She has been the subject of endless death threats, has intervened to protect rape victims and much else. She receives a top human rights award in London tonight. Sue Turton has been talking to her.

TAP RAP

Starbucks leaves the tap running in the interests of hygiene, but every day loses the equivalent amount that it takes to provide water for the entire population of Namibia.

WATER PLAY

And Nicholas Glass has been to see the most celebrated new playwright of his age, a 27-year-old black American who is flooding the Young Vic with water (do Starbucks know?).

But in truth, tonight is crash night, at seven, on four.

AND ON MORE4 NEWS WITH KYLIE MORRIS

And from Kylie Morris on More4 News: Boom bang-a-bust. Europe has shown a level of disunity over the current financial crisis rarely seen outside the Eurovision song contest.

So we've decided to rank some the main competitors Eurovision-style - will Angela Merkel's verbal guarantee for savers swing our in-house economic judge, or will her mixed message and the failings of Hypo bank make it "l'Allemagne, nul points"?