Courtesy of John Nyaradi
Much has been written about the problems with the PIIGS and the recent U.S. rating downgrade by S&P.
Clearly too much debt in the world is an issue that just won’t go away and today we’ll take a quick trip around the world to take a look at the global debt nightmare that just doesn’t want to end.
In Europe, the “no Eurobonds” decision by France and Germany puts decidedly more pressure on the fringe countries and their overall potential for survival as an economic unity.
At home, the bad news keeps coming regarding debt and debt ratings as New Jersey was downgraded from AA to AA- over concern regarding its ability to remain fiscally solvent.
Out in the heartland, President Obama talked about new spending and stimulus to increase employment while at the same time calling for larger spending cuts as the just ended deficit ceiling debate seems to be restarting already.
Newly minted Presidential candidate suggested that it would be “treasonous” to print more money and that he wants to cut taxes while Dallas Fed President Richard Fisher says that Fed policies shouldn’t be designed to protect the stock market and its participants which put something of a damper of hopes for QE3 at the looming Jackson Hole meeting.
And in a very interesting article, analysts at BlackRock take a look at which countries are weakest and strongest and rank them in The BlackRock Sovereign Risk Index.
Meanwhile, investors have taken notice of the global debt problem and recent volatility and have headed for the door in recent weeks with near record mutual fund outflows.
It was a quiet day in the markets as Dell dragged on the tech sector and markets wait for tomorrow’s unemployment reports.
Global Market Summary:
Dow Jones Industrials (DIA): +4.3; +0.04%
S&P 500 (SPY): +1.1; +0.09%
NASDAQ (QQQ) -12; -0.47%
Russell 2000 (IWM): -0.7; -0.1%
Tomorrow’s Action:
Tomorrow brings the weekly unemployment reports, July consumer prices, July existing home sales, July leading indicators and August Philadelphia Fed report.
Have a great evening,
John
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