EU Leaders First to Back Banks
Growing Chorus in United States of Government and Economic Leaders Calls for Following Suit
But amid all the panic, some optimism is starting to emerge. Stocks in strong companies have also been brought down by this crisis and some investors see a buying opportunity.
"If you have a long time horizon," Sorkin said, "I think the problem is in this environment everyone is looking at their account literally on a day-to-day, almost hour-to-hour basis. And so if you can stomach it, this is the time to be investing, because this is when people make money."
Soros Backs Plan to Buy Equity in Banks
In an appearance on "World News," billionaire investor and philanthropist George Soros expressed cautious optimism for a reversal of fortunes.
"I'm afraid that a lot of time has been lost and a lot of altitude has been lost," Soros told ABC News' Dan Harris. "But eh, I think that if they announce a coherent plan now and if they also act -- and I think they probably need to take action on Morgan Stanley right away -- then I think the market will stabilize and they will have time to implement the scheme."
Soros said getting money to banks would have cascading benefits for the economy.
"Well, putting money at the level of the capital injection is much more high-powered money, because you only need to maintain 8 percent capital for your balance sheet," Soros said. "If you're putting money at the level of the balance sheet, you, you know, need to put in 100 percent. Here you only need to put in 8 percent. So $700 billion would be sufficient to recapitalize the banks, but it wouldn't be sufficient to take off their hands all the bad stuff that they've accumulated.
"In addition, if you make the terms right ... then I think you could attract private capital. Existing shareholders and giving them rights to subscribe, which they could sell to others. Other investors, to come in, and you may not even need taxpayers money for this.
"I think that also the European governments realize that they have to fix their system. And, you know, when you go to the brink as we are right now, then something happens to pull you back. Because the alternative of allowing this to continue is so horrendous that even people who don't want any government intervention realize that such intervention is necessary."
Shockwaves Around the World
The bad news out of Wall Street continued to reverberate worldwide over the weekend. The Asian markets, which were first in the world to open, got off to a bad start this Monday, according to ABC News' Stephanie Sy.
On Friday, indexes in South Korea, Singapore, and Hong Kong plunged to their lowest levels in years. But Japan's Nikkei index was the worst hit, losing nearly a quarter of its value last week. Investors expect a U.S. slowdown to trigger an economic downturn in Asian countries, which depend on U.S. consumers to buy their exports.
Russia suspended trading on both of its stock exchanges yet again on Friday, Clarissa Ward reported from Moscow, as markets around the world continued to plummet. Because Russia is largely a commodities-based economy, it is suffering enormous losses as commodity prices, particularly oil, continue to fall. The Russian government says on Monday it will invest nearly $7 billion into Russian stocks, that's part of a wider financial rescue package totalling more than $200 billion.
Perhaps the one bright spot?
In Baghdad, prices on the Iraqi Stock Exchange were actually rising, John Hendren reported. The Iraqi stock index is up 25 percent for the year, and bank stocks aren't tumbling here because there's no mortgage crisis, for the simple reason that Iraqis pay for their homes in cash.
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