Tuesday, August 9, 2011

Downgrade Spooks World Markets

US stocks plunged yesterday, directly taking the cue from the historic downgrade of the country’s pristine triple-A credit rating. Panicked selling on heavy volume resulted in the S&P 500’s worst day since December 2008, with every stock in the benchmark index ending in negative territory.

This alarming anxiety about the US economy is already matched by escalating misgivings about Europe’s debt problems. And this will, of couse, feed on the growing dread of a disagreeable recession that can potentially engulf the whole world.

At a time when the US is expected to take further confidence-boosting measures to calm everyone’s frayed nerves, worryingly, Barack Obama is singing the same old tune – that he inherited much of the country’s problems with high debt and deficits when he entered the White House – and besides, he seems more interested in focusing his attention on his 2012 re-election campaign than on fixing the badly-bruised economy.

Of course, Asian markets which have been panicking since last Friday – the day of the US credit rating downgrade – got even more spooked when US and European trading endured heavy losses on Monday. And as speculations run high on a fresh US economic downturn and a deteriorating EU debt crisis – financial markets everywhere are now barfing, retching and puking as their share prices spectacularly collapse all around the world.

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