Global Markets Tumble on Continued Worries Over Europe’s Debt Crisis

Financial markets reflected rising fears that Italy could become the next victim of Europe’s debt crisis.

Comments: 65

  1. Tumbled? It's still well over 12,000. The market is artificially high as it is, what Greenspan would have referred to as irrational exuberance. Considering everything from the European debt crisis, to the U.S. debt crisis,continued weak employment numbers, and another looming foreclosure wave, there's no way the market should be above 10,000. The only way to turn this around is real austerity measures, coupled with economic incentives for job creation here in the US and in Europe.

  2. In order to gain control of the debt crisis Europe must have a Bear Stearns moment. A country must go into actual default to prevent others from doing so.

  3. Market Fears? Come again. Hedgefund speculation grand style is more likely the main cause for the instant sellout; investors follow each other like sheep running over the cliff.

  4. We are in a mess

  5. We're next.

  6. Short-selling needs to be banned. It is a strategy available to and employed by almost exclusively by very wealthy investors and can cause great damage to everyone. The right to borrow money and bet against a currency owned and used by the population at large, or a stock held by small-time investors who are naively guided to utilize buy and hold strategies is fundamentally unfair. Futures, options, derivatives, credit default swaps, have come to dominate global financial activity and have caused one crisis after another. the wealthy have been allowed to play filthy little games with the future, that are unavailable to the rest of us, behind closed doors. This must be stopped.

  7. These days the state of global stock markets eerily remind me of the state we were in before the September 2008 meltdown.

    These indicators might be foretelling a relapse into recession. Not good unless you own a few 'Put' options.

  8. Who needs to worry about al Qaeda when our own Western politicians are over-spending us all into Socialist bankruptcy?!

  9. And tomorrow it will go back up on some number. 401ks provide unlimited funds. Right?

  10. From the on-line edition of today's "American Banker"...

    "Fed Up With Talk, Bankers Push To Constrain Regulators...

    After months of complaints about overzealous examiners, frustrated bankers took it a step further by pressing a House panel to pass legislation forcing regulators to be more lenient."

    Did Sheila Bair leave the FDIC parking garage yet?

  11. Austerity measures without tax increases for the rich will send us into an economic tailspin that could last a decade or more. If the Republicans won't negotiate, we're in for a long and devastating downhill ride. May their children forgive them!

  12. The global economy is for the birds. For stock in some little Wisconsin manufacturer, with only a regional market reach, to tumble dramatically because of a comment some Brit makes about the mess in Greece is insane.

  13. The vultures are circling! They smell blood. Who will be the next victim? I guess Greece wasn't enticing enough. Looks like the vultures have turned their noses up at Spain and Portugal. Will it be Italy next or the USA? I'm sure they can hardly wait to start picking at the carcass of the USA. We're staggering like a sick cow now, but maybe they'll like the dead meat better after it has rotted a bit!

    I get the feeling the 2008 financial crisis was only the first act.

  14. Think of this as a conspiracy where all the financial players have time to bet against everything to make money.

  15. Excessive spending and debt accumulation will continue the economic decline for many years.

  16. Other experts said to look at the market for an indication of how the American debt talks were going. If markets are cool, that's a good sign. If markets become volatile, then that's bad news for America.

    And here other experts say it's all about Italy.

    Maybe the other experts misinterpreted the oracle who said turmoil was being cause over worry about the country that is easily distracted with sex scandals and terrorism, and which has total debt approaching annual GDP.

    That would be America, not Italy anymore.

  17. Is anyone surprised by an Italian default? French? Polish? English and eventually German and the US? If they are, they need a serious reality check. Government overspending, overborrowing, overpromising and overeverything will be around for now and along time to come. I Got The Power! Yeah!!

  18. 11:49 a.m. ET - Obama: "This recession has been hard on everybody, but it's harder on folks who've got less," adding that he is "obsessed" with all the families in the county who are doing the right thing every day and feel like "they're falling behind no matter how hard they work."

    From an opposite view; “those that have much are seeing the declination of material, currency and patriotism.” In short and a realistic view, “because of the strict monetary policies of growing economies the western wealthy cannot re-invest for gain as before. And, western economies will not generate as long as that wealth sits and decays. The global currency balance has to be a unilateral acceptance, “reality.”

  19. There's a system under construction, before our eyes, behind a veil. One in which wealth flows up to the top of the pyramid, be damned the lot of us. One in which politics = paid for by corporations. The interests of the people are being subverted, in fact, out right sabotaged. We will watch as everyone we have constructed collectively, is taken for the privilege of a few individuals.

  20. Why do international events have a greater impact on the markets then the continued failure of our government to reach an agreement on the debt ceiling? If I was a cynic I would believe that the ongoing public debate between Obama and Boehner on the debt ceiling is just a dog and pony show; the Market bosses have already instructed their bought and paid for lackeys in Congress and the Executive to reach an agreement to increase the debt ceiling.

  21. If you think Italy's looming debt crisis poses a threat to global financial stability, wait till Britain's debt-ridden, un-productive economy starts to unravel

  22. A 1% LOSS IS HARDLY A TUMBLE. AS PAPPY WOULD SAY "STOCKS GO UP, STOCKS GO DOWN" Look, it's all a con game anyway. The big boys make and break the market, and the ordinary person is played like a puppet on strings. Listen to the coming news....Invest in GOLD. $1500 and more for an ounce (about the size of a fingernail). Boy, don't get me started on that one!

  23. We talk about the bear market and the bull market constantly.

    Has anybody checked the mathematical formulas behind the Dow Jones Industrial Index?

    In the real world, the trillions of dollars cannot be created overnight and they can not evaporate suddenly due to somebody’s mood swing.

  24. During the last 150 years Italy has always paid back her debt, interests and principal, at due times. Italy is mostly indebted with the Italians, who buy Italian treasury bonds. Italy is inside the euro zore, and it means no currency devaluation risk. The real nightmare is that the savers are sitting on the dollar volcano, a mountain of notes and bonds, that have been printed without a correspondent in assets, goods or gold. I suggest to the American saver 'buy Italian Bonds, it is the dollar that will explode not the euro.' Sapodilla

  25. Is this doomsday?

  26. Global financial reforms are long overdue. And the mega-banks had to be stabilized, they are too interconnected in the financial system we are all dependent on. Now they should be broken up into smaller pieces so this cannot happen again.

    - Balkingpoints / www

  27. Good luck to Italy reining in the short sellers. They claim they are doing good by exposing weakness in various entities and hope simultaneously to make big bucks just doing their civic duty. Meanwhile, on the home front, why do I get the willies every time Obama talks condescendingly about what's happening to "folks."

  28. Take short term profit from the stock markets, worldwide, and return to the concept of business capitalization. Make investors keep holding for long-term appreciation. Remove all speculation and gambling.

  29. Kenan Porobic @ 23 says:

    "In the real world, the trillions of dollars cannot be created overnight and they can not evaporate suddenly due to somebody’s mood swing."

    That's a faulty understanding of stock markets.

    Value of an asset (i.e., how much to pay for) is in the eyes of a beholder combined with the magnitude of supply and demand of and for that asset.

    That perceptive value of an asset fluctuates and that's what drives the stock market's valuation up and down.

  30. The US government should start to check on the speculators and manipulators of the money marks (for starters) and this time send then to jail! didn't some of the largest US stock brokerage and bond houses short the Greek currency, just as they were selling their bonds for them?


  31. This is how our treasury, wall street, white house but particularly Congress is clueless about , there will be something worse than what we have now.

    Apparently it is happening, Greece virtually defaulted, belive it or not.

    Italy is slipping its grasp. If italy cannot get low interest loan, Ireland and portugal and spain is automatically face up degraded debt market problem.

    When it comes to USA, Our dumb right wing guys which spent more than anybody in the countries history in our best economic times, now pushing poisonous austerity measures have no clue what they are up to. if greece italy debt crisis blown out America cannot do anything its jobless and ailing economy.

    Watch and see, how dumb this GOP is.

    2012 election will be burial ceremony for GOP.

  32. Those who claim that the current market weakness is the fault of "short sellers" and "speculators" are in a state of denial and/or blissful ignorance. Short sellers did not create the current fiscal and solvency crisis that is plaguing Europe (or the US). Short sellers did not compel banks to create bloated balance sheets with unreasonable leverage. They may be convenient boogey-men for governments unwilling to confront the harsh and frightening truths of today's economic challenges but to point to them as the main cause is a sign of further willful ignorance (and lack of accountability) that created this crisis in the first place.

  33. Do you suppose if it went down to 8000 again the bankers who run this country would consider implementing Glass Steagall again and supplement with a lemonade stand on the side????
    As I drive around and see all the older vets pushing their belongings in shopping carts, and whole families pinching pennies in thrift shops, and children locked out of summer school, and food prices going through the roof, I wonder just what would get the attention of Wall Street.
    Hovering around twelve thousand is not going to do it....

  34. This is the consequence of socialist governments and greedy people spending money they do not have. Time to let the ponzi scheme collapse, punish the politicians, start rewarding hard workers and savers

  35. A new domino theory is in order. The western countries, America included, will begin falling like dominoes. It's only a matter of when and how, not if.

  36. Time for all indebted countries including our own to DEFAULT now.

  37. Geez, if we only raised taxes on the rich, everything would be peaches and cream.

  38. European governments have sky-high tax rates (much higher than the U.S.), plus heavy consumer taxes (20% or greater VAT/sales tax in the EU), and single-payer health care. Half or more of the EU is now on the verge of insolvency (only Germany and some of the Nordic states are indisputably solvent).

    The US is not (yet) cursed with aggregate debt levels (relative to GDP) as high as EU member states, has lower tax rates, and no single payer health care system.

    Given what is now unfolding in Europe, why in God's name would we want to - at this very moment - begin (by raising taxes, having already moved towards expanded health care access) to move TOWARDS that indisputably bankrupt social model? Once any government devolves mostly/simply into a wealth redistribution mechanic, the society so governed becomes doomed, and all economic debates center on how great popular majorities support taxing the 'rich'. Why do people on this board, and NYT boards generally, view that as proof or vindication? People with less always can be relied on, to approve taking from those with more. Just because you do it with your votes, as opposed to, say, Hugo Chavez's cruder methods, doesn't make it right.

  39. 11.MonaNew YorkJuly 11th, 20112:08 pmAusterity measures without tax increases for the rich will send us into an economic tailspin that could last a decade or more. If the Republicans won't negotiate, we're in for a long and devastating downhill ride. May their children forgive them!
    ******************
    Sorry Mona but there are no plans on the table to tax "the rich." The only plans on the table are to increase taxes for the middle class who earn a little bit more and are hoping to some day become rich. Rich people like liberals Bill Gates, Warren Buffet, George Soros and Mark Zuckerberg will remain untouched.

  40. Since 1960 the U.S. debt has never gone down. Try - should you dare - to calculate how much money was spent on the military occupation of the world and the Forever Wars since.

  41. Something is seriously wrong in Europe, and it's not just debt. Yes, Italy's debt is 119% of its GDP, but its budget deficit is only 4.5% of GDP, about half the US's, while the US has a debt equal to 100% of GDP. Germany, who loves to point fingers at other countries for fiscal imprudence, itself has a debt to GDP ratio of 83%, and its budget deficit (yes, Germany's budget is in the red) is 3.3% of GDP, not a whole lot better than Italy's. And while Italy's banks stayed out of the toxic subprime mortgage mess, Germany's got fully involved - witness Deutsche Bank, which lost billions.

    Spain is also a target of criticism, but its debt:GDP is only 60%, far less than Germany's, France's or the UK's, and half of Italy's. Its budget deficit is worse - about 9.2% of GDP - but not quite as bad as the US or the UK.

    The facts don't support the market's fears and conclusions about either Italy or Spain. Yes, each has its problems, but so do a great many countries, yet not all are being touted as the next basket case.

    What the facts do support, I think, is that investors see a chance to make a lot of money by causing fear and panic about those two nations while shorting their bonds - yes, it can be done and I'm certain it is being done. Bond prices drop as interest rates rise, and spreading fear about an entire nation's fiscal condition is a great way to force the interest rates up. As this Times article (http://www.nytimes.com/2011/07/12/business/global/italy-evolves-into-eus... says, "Investors are taking aim at any country suffering from a toxic combination of high debt, slow growth, and political dysfunction." Not because these countries are on the verge of collapse, but because they see a way to make tons of money, and short-selling is notoriously successful.

    Short-sellers have driven businesses to bankruptcy, and they're now doing it to entire nations.

  42. You know what - We need a depression. People love it when they have to scramble, look for work, get down and dirty with the ground. Maybe people will start planting veggies. Instead of going to the casinos they will have to spend their money on basics. Pennsylvania is alive and well with gambline proceeds. Maybe people will find Christ in prayer, and stop giving to those who live in spendor while claiming to help the poor, but certainly help themselves first. Families would have to be home more, drive less, and instead of playing supreme court approved computer horror games, they might learn to play checkers. Do we really need all of that electricity - when if it is turned off we can save money and go for a walk. Have you ever seen those extraordinary obese people in those motorized wheel chairs. Well, they were supposed to aide in getting the handicapped to places, not make them total invalids. Instead, the owner just became bigger, and bigger and more health problems. Getting back to regular wheelchairs where the person has to wheel themselves or get someone to push them will be the thing. And, airplane fares? They would be reduced because of the weight loss. How many times have you gotten on a plane and realized your sky high fare was paying for that 300 pounder, and you were 150. Oh, I can see it now, the closing of all of those fast food places, because people wouldn't need fast food because they weren't going anywhere - and gas prices would fall. The health of America is at stake. Don't raise the debt limit in America - the crash will make us healthier. Sorry Europe you apparently have lived in the lap of luxury too long. A new world is upon us - and like most of the Republicans who are running for political office, those who claim to be but are not, and those who are not but just maybe thinking about it for recognition - we can all thank God. I wonder why he's usually mentioned and we are in and have always been in - a mess.

  43. The entire world is cooked. Stick a fork in it.

  44. Serious deficit reduction in the US will slow our economy, whether by spending cuts and/or increased taxes. So much for our anemic recovery.

    Europe is teetering, talk of a Greek default is now being heard (can the other PIGS be far behind?). Failure of even one european bank will bring on another 2008 like paralysis of the banking sector.

    A US default, for even one minute, will cause our borrowing costs (not just the Feds but throughout our economy) to leap, and will be the beginning of the end of the dollar as the world's currency (read significant inflation to the US).

    Gee... I would love any suggestion as to where to invest!

  45. The real problem is Wall Street trying to invent a crisis to make a quick buck...which means that there is nothing else better to bet on out there. Pathetic really.

  46. Greece and Italy today, USA tomorrow - if we don't get our spending under control soon. Thank God for the tea parties; they have given us one last shot to get our act together before we drive over the cliff into oblivion.

  47. The blame Game is ON, as nobody knows the Culprit/s.

    The last decade of financial mess is not going away that easily.

  48. For #11

    Republican lawmakers' grandchildren will be tomorrow's plantation owners, which is precisely what they are trying to force on the rest of us.

  49. sorry to say it, and live it (i'm unemployed), but the financial crisis was a house of cards that fell only partway. the whole thing needs to crash before there's any real hope of sustained improvement

  50. Is this how it is going to be, we start to make some headway here in our markets, then another European country announces its crisis? Which one next after Italy. Maybe they should all vent their anxieties together and then we move on, instead of one this week, one next week, one two weeks from now. I am no economist, but this patterns seems very odd to me.

  51. What the Democrats always do is they start screaming about some crisis they claim is coming. Of course it's not really, but they rearrange some things with the economy and make their trumped up crisis come. That way conservative economic policy never is given a chance to work. In Europe it's the Socialists and Marxist run governments who are in more control of their economies than we have it in America can turn the economy off and on at will. In America it's a bit harder to turn the economy off or on whenever the liberals want the American people to believe something liberals are saying exists, but doesn't unless they pass a law stopping any growth conservative economic policies produce. The debt ceiling can't be raised because if Republican's do it will open other opportunities to spend more money brought in by the debt ceiling being raised gives them the opportunity to borrow, from who I can't imagine, and I believe the Democrats will find out the hard way there are no lenders left who would trust American treasury notes. There is plenty of money coming into our Treasury to pay for everything, but any more new spending to the tune of trillions of dollars. That is the difference between Obama's debt ceiling raises and the ones from past Republican raises is the amount and what was done in return for raising the ceiling. Most of the past raises were given with significant cuts in spending. The Democrats haven't had a budget in almost three years because they were getting all they wanted from bills signed by Obama and the House in the hands of Democrats. Why have a budget when you get all you want from bills dug up from the 70's spending that was bad then, but passed now under the insane Nancy Pelosi and Harry Reid. Even if this was Russia she would be taken out back and shot in the head. When the Chinese tell Obama to be more like conservatives in his budgeting what is that telling you? America needs to be given time for conservative policy to work.

  52. Glenn Beck is buying gold.

  53. Right before Obama was elected and Freddie/Fannie had done the damage it was designed to do by the Democrats, Barney Frank said "Conservative economic policy has failed." Sure, it would if not ever given a fair chance to do what it's designed to do. Democrats have always do that, and that is they scuttle conservative economic bills by long ago passing Congressional rules that say that the Republican's have to let the Democrats put as many amendments on the bill as they want, but not the other way around for Republican's. That way any good economic bills the conservatives come up with will be watered down so badly by all the destructive Democrat amendments conservative economic policy would never work. That way Democrats can go to the American people and say, "See, those ideas would never work because look at what they did." and what that was when the destructive amendments of the Democrats kicked in damage to the jobs market took place the Democrats could blame on the Republican bill in general. Of course Democrats never tell the public what destructive or obstructive amendments they stuck in the bill that kept the conservative parts from working.

    I've seen this so many times and I screamed at the Republican's to find some way to tell the people what the Democrats did to their bill, but they won't do it because they say it would embarrass their Congressional associates, and they wouldn't want them to do that to them. But Democrats always do that to Republican's because of what they do to the bills Republican's write that Dems. keep from working.

    Wouldn't you vote for a Republican who made it better to find a job if the bill they had passed had not stopped jobs from being found? If Democrats passed a bill that took jobs away would you still vote for them? Then why do you liberals keep voting for Dems who kill jobs and stop Republican bills that would create jobs, but you never hear about that part because Dems don't want you to know about it.

  54. I fail to see how EUROPEAN FEARS can bring us down... FEARS??? REALLY!?! We're supposed to be strongest nation on Earth, and we're scared of a little EUROPEAN debt? perhaps this would be more understandable if the title had American Debt Cisis... But I see no such thing!

  55. Ways to cut spending should focus on 1) the waste and duplication in government agencies, including cabinet offices, no need to have 5 agencies doing the same or overlapping jobs; 2) do away with departments that are not adding sufficient value and have the work done at the state level (e.g. Dept. of Education; 3) remove military from Europe, they can pay for their own protection; 4)cancel extra perks for government employees such as limo service and no unnecessary trips (especially for veiled campaign activities; 5) institute strict evaluation of productivity of government workers, can we do the same job with more efficient workers like the private sector does. Obviously we do not need things such as tread mills for shrimp, etc. so it is critical that priorites must be established for how tax money is spent. There is a spending problem (not an income problem) and a serious lack of respect for the taxpayers (only 53% of the population) who pay the freight.

  56. A 1.2% decline is not a tumble. Wait till you see the post-default plunge!

  57. As that greatest of cinematic rebels, Josie Wells, noted "vultures have to eat same as worms." The problem is not the vultures or the worms swarming for a meal, the problem is that the meal is dead meat-over spending, over borrowing until the goose is carrion. Cosmo Mognic

  58. Time to act now to save mankind from extinction. The USA spends over $60billion a year on cosmetics. Ladies, please stop wasting resours on hairdyes, straighteners, curlers, whitenerts, lip jobs, eye tucks,nail polish and remover. We can survive without coloured toilet tissue, plastic flowers and ornaments, trash from communist regimes, polyester clothes, rap, vice, illegal drugs, casinos and tobacco. East less, work more and help others to live happily ever after.

  59. So much for the Capitalism and the pseudo wealth it creates. After all it turn out that its just a high game played by wealthy with their lies, deceit and manipulations on the expense of common people.

  60. When the EU starts digging into Italy's financial condition, it'll make Greece, Ireland and Portugal look like models of economic propriety. Italy has a rich history of concealing fraud; where did you think Carlo Ponzi originated? It will certainly collapse the Euro Zone and perhaps the European Community. But Hey, that's just Italian!

  61. maybe it's not only europe's debt crisis that's freaking out the markets. maybe it's ours.

  62. It's the Euro!

    The Euro, once a symbol of unification, has instead become a symbol that represents all that is wrong with Europe. Many in Europe now see a collapse of the common currency as their emancipation from a Europe that has turned into an exclusionary club for high-minded bureaucrats in Brussels who no longer hear the voices of the people. The Euro may survive with the help of it's advocates, as they feverishly move to patch and/or repair the broken aspects of their failing symbol, but, the warning signs that the zealots of Europe's common currency fail to see is that a collapse of the Euro has become the goal for all those who demand to be heard. In other words, it's not about the numbers anymore. No matter what is done to prop up or secure the Euro's future, or convince those who use it that a breakup is not in their best interest, a Euro demise is seen by a growing number of European citizens as their way to regain a life and a future that seems to be slipping away. The great irony of the whole European project is that the symbol of unification has become for many a symbol of division.

    If the Euro endures it will do so at the expense of more internal strife and division. If it fails, many millions will rejoice and revel in the fact that despite the negative consequences [if any], they will have regained control of a future that was wrongfully taken from them by a detached and unyielding centralized EU government.

  63. The problem is not Europe but it is us. We have large debt and nobody wants to pay for it. The rich have the money but the house of representatives is dead against increasing taxes on the rich. Now how is it that the peoples house is protectiong the small minarity of the wealthy. Who are the people that voted them in and how foolish can you be that you vote to hurt yourself and many of your fellow citizens by being supportive of republican policies.

  64. No comments on where Wall Street Banks get their money? "Money" in the form of US $Dollars can be conjured into existence with a mouse click.

    Ben Bernanke has been clicking his mouse as fast as his little fingers can move in a desperate attempt to reflate the housing bubble. The money has to go somewhere, speculators are chasing the hot markets and in the process bidding up the price of basic goods like corn, wheat and oil.

    While financial regulation is clearly in order, it should start with the guy in the FED Chair giving $Billions of free Dollars to speculators.

  65. Childs play. Wait until we have to invoke the 14th amendment, to keep social security checks flowing. If I have it right that Amendment can be invoked by the Pres to meet our obligations but does not allow him to pile on more debt.