Courtesy of Mish.
It’s a sea of red in the US and European equity markets following the victory of president Obama and statements made by ECB president Mario Draghi. US equities are now down well over 2% and most of Europe was down between 1 and 2 %.
Things would not be any different if Romney had won.
Regardless of who won, the global headwinds would have been the same, and the global economy is in a recession already (it’s not widely recognized yet, but it soon will be).
Bloomberg reports German Stocks Decline After Draghi Says Crisis Hurting.
German stocks fell as European Central Bank President Mario Draghi said the debt crisis is hurting Europe’s largest economy and the European Commission cut its growth forecasts for the euro area, offsetting optimism about U.S. President Barack Obama’s re-election.
Draghi said the debt crisis is beginning to take its toll on the German economy. “Germany has so far been largely insulated from some of the difficulties elsewhere in the euro area,” he said at a conference in Frankfurt today. “But the latest data suggest that these developments are now starting to affect the German economy.”
Forecasts Cut
The European Commission cut its growth forecast for the euro zone as the debt crisis ravages southern Europe and gnaws at the economic performance of export-driven Germany.
The 17-nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent, the Brussels-based commission said today. It cut the forecast for Germany to 0.8 percent from 1.7 percent.
Divergences Resolved to Downside
Economists are just now coming around to position I stated in February and March, that Germany would not be immune from this.
Here is a brief recap.
February 22: Expect German-Periphery Divergence to Resolve to the Downside for Germany…
