The United States’ Federal Reserve has intervened dramatically to cut base rates by a whopping 75 basis points or 0.75 percent, indicating that it regards recession as a real threat to the US economy. This is the single biggest cut by the Fed in 20 years.

Despite the out-of-synch announcement, the markets are currently less than impressed, regarding it as a panic measure. The White House has also weighed in with the President saying he is considering an even bigger fiscal stimulus than the recently announced $150billion.

London markets have lost around 13 percent of value in only three weeks, heralding a worldwide bear market.

Syntagma has an in-depth analysis of the upcoming recession. Here’s a taster :

As we’ve been saying here in Syntagma for some months, a long, deep worldwide recession now looks more likely than not. Opinions are hardening among key players, principally in America and Britain.

Yesterday, the Wall Street Journal proclaimed : “U.S. warning signs point toward deep recession”.

Now even the insurance companies, or Monolines, that underwrite possible defaults, are also in trouble, with two of the biggest in the U.S. said to be close to Chapter 11 status (a form of bankruptcy protection against creditors).

Clearly, with the Fed and the White House in fighting mode something nasty is moving in the undergrowth.

NYSE-Euronext suffered its first major setback last week as CEO John Thain, 52, looked poised to replace Stan O’Neal as boss of Merrill Lynch.

Wall Street was shocked at the news as Larry Fink had seemed quids in for the post. Thain was formerly President of Goldman Sachs.

The move leaves a hole at the top of stock exchange group NYSE-Euronext as the man who forged the transatlantic merger jumps ship.

Chief operating officer Duncan Niederauer looks poised to take control.

Merrill’s share jumped 5 percent as Wall Street absorbed the news.

CurrencyTrading.net has an interesting piece titled, 12 Surprising Implications of London’s Replacing New York as the World’s Financial Center by Jessica Hupp.

Here’s just one of the “implications” :

“Financial regulation: After scandals like Enron, the financial industry is more heavily regulated. The Sarbanes-Oxley Act required lots of tightening of financial controls. As a result, it’s less attractive to do business in a country where every transaction is scrutinized.”

Read the whole article here.

American regulatory filings show that 35 foreign companies have delisted from American stock exchanges since April.

Rising costs, over-regulation and a culture of litigation have been cited as reasons for the exodus. In addition, US investors are preferring to buy stocks directly in overseas markets rather than from secondary listers in America.

British Airways, Danone and ICI have all described multiple accounting standards, lower trading volumes and near-draconian compliance under Sarbanes-Oxley law as reasons for turning away from secondary listings.

London is seen as the main beneficiary of this trend.