They say when America sneezes the world catches a cold. Today has proven that cliche is true once again as we see the terrible illness that is infecting the world markets. The Dow Jones fell 512 pts. Marc Faber stated that the world has gone crazy with panic selling. He states the "whole world has gone mad!" The European and Asian markets tumbled more than we did today. Some were saying to get out of the way of the oncoming freight train. Many are predicting a severe recession and some say maybe depression. It appears that we are headed for some very bumpy times for awhile as the world economy is slowing down. That means there won't be growth. That means there will be more job loss. Some are predicting another crisis like 2008. Others are asking if it is now time to consider "global austerity?" (Austerity: severe, forbidding, without excess, luxury or ease, without ornament, simple, grave, sober, solemn, harsh, rough, and bitter)
Reasons for the severe downturn:
1. Already distressed markets.
2. Over-sold markets.
3. The fall-out from Capital Hill escapade.
4. Sovereign debt problems now spreading to Italy.
5. Worsening job market.
6. Lack of consumer confidence and spending.
The way the can has been kicked down the road makes me think that Ben Bernanke will ride in on his white horse and fire up the cannon with Quanative Easing 3. Although, most economist don't believe that QE 1 & 2 fixed anything. It has done one thing...postponed the PAIN. We will see what tomorrow will bring. But it doesn't look too good right now. Nevertheless, we did get beyond the 2008 crisis. And who would have thunk it!
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