Global markets on 'cliff edge' amid fears over European banks

Fears that government austerity packages will hinder global growth have combined with fresh anxiety about the health of European banks to hammer investor confidence.

Shares on both sides of the Atlantic dropped heavily amid warnings that markets were on a "cliff edge".

In jittery trading ahead of a crucial repayment by Europe's banks of a €442bn (£362bn) European Central Bank loan on Thursday the rates at which banks lend to each other in euros rose to their highest levels in eight months as rumours swirled that some banks were finding it difficult to raise funds in the money markets.

The FTSE 100 has now fallen 14% since its April peak after losing 157.46 points to close at 4914.22, a 3% decline on the day and its lowest level since September last year. French and German markets lost about 3%. Wall Street was down 235 points by the time London closed, about 100 points below the 10,000 level.
http://www.guardian.co.uk/business/2010/jun/29/market-turmoil-banking-industry

Lol, the excuses the EU has been giving is that their austerity programs were supposed to reassure the markets that fears of deficits were unfounded.

Looks like the markets are telling them their nuts.