Mike Pouraryan
"Outsiders" Economy Watch Special Edition (9/22/2011): Scary Times
These are truly scary times.
The US S&P lost 3% after the US Federal Reserve came out with its' economic outlook. Right now, Asian Markets have been falling as well. This is after the US Congressional Republican Leadership wrote the Federal Reserve to warn against any "easing" by the Fed.
Australia's market lost 31 BIllion Australian Dollars and fell below the 4000 mark. Australia is now officially "bear market territory". Australia's Economy is commodity-driven, which means that it will be one of the first to suffer in my view because the demand of its' raw materials will be tempered as the World Economy slows down.
I view the biggest problem, right now, to be Greece. Greece has just accelerated additional spending cuts that has brought people back out on the street. It has been done in order to help get an additional tranche from the IMF and the European Central Bank. But, the cost to Greece will be immense. The people are aroused and I view Greek default as being only a matter of weeks. Greece may well be the Lehman of the Sovereign Debt unraveling.
Rating agencies, in the meantime, are busy downgrading everyone. The latest casualty, of course, is Bank of America. I don't put much stock in ratings these days in light of what they did during the boom years. But, still, they do matter. The implications of a rating downgrade was made so clear by Robert Reich not too long ago:
I wonder if the Republicans are truly listening.
The US S&P lost 3% after the US Federal Reserve came out with its' economic outlook. Right now, Asian Markets have been falling as well. This is after the US Congressional Republican Leadership wrote the Federal Reserve to warn against any "easing" by the Fed.
Australia's market lost 31 BIllion Australian Dollars and fell below the 4000 mark. Australia is now officially "bear market territory". Australia's Economy is commodity-driven, which means that it will be one of the first to suffer in my view because the demand of its' raw materials will be tempered as the World Economy slows down.
I view the biggest problem, right now, to be Greece. Greece has just accelerated additional spending cuts that has brought people back out on the street. It has been done in order to help get an additional tranche from the IMF and the European Central Bank. But, the cost to Greece will be immense. The people are aroused and I view Greek default as being only a matter of weeks. Greece may well be the Lehman of the Sovereign Debt unraveling.
Rating agencies, in the meantime, are busy downgrading everyone. The latest casualty, of course, is Bank of America. I don't put much stock in ratings these days in light of what they did during the boom years. But, still, they do matter. The implications of a rating downgrade was made so clear by Robert Reich not too long ago:
I wonder if the Republicans are truly listening.
