World will react today to US credit woes
Does continued angst about the debt crisis in Europe and this weekend’s unprecedented downgrade of the United States’ creditworthiness unleash a torrent of financial woe?
Or do global stock and bond markets, nations that hold U.S. debt and our fellow citizens simply shrug off Europe’s financial failures and the unprecedented dent to what is essentially America’s credit score?
The answer might be an uneasy, who knows? And that's especially uneasy for aspiring homeowners, 401-K account holders and the unemployed who would be hurt by a spike in interest rates, a sell-off in the equity markets and a string of bad economic news that kills job growth.
Monday is the first day global markets open since Standard & Poor’s lopped a letter off America’s coveted AAA credit rating and demoted us to a New Zealand-like AA+.
Investors will first signal their thoughts in markets overseas.
U.S. stock futures on Sunday night were down, according to Bloomberg News.
Atlanta-area economic soothsayers predict a rough day, followed by continued instability in the weeks and months ahead.
“[The downgrade] is a big deal psychologically, and psychology can be important to markets, particularly in the short term,” said Dorsey Farr,economist and partner with French Wolf & Farr in Buckhead.
The market heartburn, experts say, isn’t caused solely by short-term affects of a downgrade.
Investors worry long term about Europe’s debt struggles and those of the U.S. government, and hold broader concerns about a slothful economic recovery.
That recovery once moved in aggravating fits and starts. Now it seems to have stalled.
“I’ve had a little pit in my stomach wondering what’s going to happen on Monday,” said David Millican, co-founder and managing partner of Buckhead-based Atlanta Capital Group.
S&P's actions weren't unexpected. The ratings agency had warned of as much months ago, and finally pulled the trigger Friday after markets closed.
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Does continued angst about the debt crisis in Europe and this weekend's unprecedented downgrade of the United States' creditworthiness unleash a torrent of financial woe? Or do global stock and bond markets, nations that hold US debt
Green and grey streaks suggest the course of the flow, like the ghost of the vanished torrent. "Voilà, the waterfall!" says Philippe, lighting a cigar. We all laugh, and turn back. The next day we stop briefly at Temple-sur-Lot.
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To make matters worse, the United States has been hit by a torrent of bleak economic news, triggering fears that it is heading for a double-dip recession. Unemployment figures today could wreak further havoc in the financial markets.
This, of course, has lead to a torrent of comparisons in the press – no pressure on Villas-Boas to succeed, then. The loss of Michel Essien to injury for six months, after he ruptured ligaments, led to the signing of young defensive midfielder Oriol
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