Holy Shit, Wall Street takes a dump on itself

[DGuller]

Enough for 31 strollers and still have change to feed your family at a decent restaurant 

And Ed needs those 31 strollers. 

[Valmy]

Around 63K.

Man I am so poor.  That is almost my family's entire annual income.

[Barrister]

Around 63K.

Man I am so poor.  That is almost my family's entire annual income.

Well based on the evidence from Languish, it is clear you should either forget this engineering nonsense and go to law school, or break your legs in a horrible workplace accident.

[alfred russel]

Around 63K.

Man I am so poor.  That is almost my family's entire annual income.

That may just mean you aren't old/aren't a good saver/don't put lots of money in financial markets. If the market falls 10%, and you have 10 years salary saved up and in the market, you are going to lose a year's salary.

[Richard Hakluyt]

Of course, unless someone has taken particularly bad decisions, then these paper losses are merely reducing the paper profits made in 2009/10.

[DontSayBanana]

Well based on the evidence from Languish, it is clear you should either forget this engineering nonsense and go to law school, or break your legs in a horrible workplace accident.

I thought he was already pretty well up there in supply chain management by the time of the leg break, which wasn't actually that long ago.

[KRonn]

http://money.cnn.com/2011/08/11/news/international/europe_debt/index.htm?hpt=hp_t1

Europe pushes the panic button

NEW YORK (CNNMoney) -- The debt crisis that started in the outskirts of Europe took another step toward the continent's core economies on Thursday as lawmakers scrambled to put policies in place to stem the bloodletting.

European stock exchanges closed higher. But the trading sessions were volatile. And in a manifestation of the sky-high levels of fear pumping through the markets, speculation ran unchecked.

The result is a continent on edge.

"There is a great deal of nervousness, and a great deal of uncertainty in the markets," said Nick Matthews, a senior European economist at the Royal Bank of Scotland.

At its core, the crisis in Europe is the result of heavy debt burdens taken on by countries that are bound by a common currency and central bank. (Read: European markets surge, slump, and surge again!)

The high government debt loads threaten to trap countries in a vicious cycle: The debt weighs on economic growth -- and austerity measures aimed at attacking the debt only put a further drag on their economies.

Greece and Ireland stumbled last year, and billions of dollars were spent by their neighbors in an effort to contain the panic. The lending and bond-buying efforts undertaken by Europe's stronger economies prevented a default, but systemic reforms remain elusive.

And now, after evolving for more than a year, the crisis is knocking on the door of Italy and France, two of the continent's largest economies.
Arrivederci, rally! Why Italy is latest worry

France has a relatively high level of sovereign debt, and is one of the few remaining countries with a AAA rating -- a distinction that has been called into question in some quarters after Standard & Poor's downgrade of the United States' rating.

Despite affirmations from rating agencies, rumors that a downgrade to France's credit rating was imminent sparked an all out assault on the country's banking sector over the past two days.

Adding fuel to the flames, Reuters published a report Thursday citing anonymous sources that an unnamed Asian bank had suspended lines of credit to French lenders.

European policymakers, some of whom have already cancelled their summer vacations, have started to pull levers in a bid to turn the tide.

French President Nicolas Sarkozy and German Chancellor Angela Merkel said Thursday they were calling another emergency meeting to discuss the crisis.

And over the weekend, the European Central Bank signaled that it would begin buying Italian and Spanish bonds -- a move that has successfully lowered borrowing costs for the two governments.

But bond yields remain elevated across the region as investors demand higher interest rates in exchange for holding government debt.

The yield on Italian and Spanish 10-year notes is above 5%, while Greece sits above 15% and France's rate has spiked above 3%.

Coupled with weak growth, the sharp increase in interest rates only adds to the countries' debt and makes it even more difficult for them to dig out of their holes.

The chaos has led policymakers to consider extraordinary measures that would have been unthinkable only weeks ago.

would have been unthinkable only weeks ago.

European fear: The wolves are at the gate
http://money.cnn.com/2011/08/05/news/economy/europe_debt_crisis/?iid=EL

There was speculation that European regulators are considering a ban on short selling -- a bet against a stock that can quickly drive shares lower.

And Switzerland's central bank hinted it may temporarily peg the value of the Swiss franc to the euro in an effort to stem the franc's rapid strengthening -- an unprecedented move.

The Swiss franc is a safe-haven currency, and its value has been driven ever-higher by fear in Europe. A senior official at the country's central bank said the currency is now "massively overvalued" compared to the dollar and euro during an interview with Tages-Anzeiger newspaper.

The panic is not only manifesting in bond yields and currencies -- it's also hitting equity markets.

Shares trading on the main French (CAC40) and German (DAX) exchanges have lost almost 20% of their value over the past month, while even Britain's main exchange has dropped 14% over the same time period.

Matthews said the debt worries are one thing, but S&P's decision to downgrade the United States and economic indicators that point to a global slowdown are further complicating matters for investors.

"Given some of the indicators we've had, this is a justified concern," Matthews said. "There is a clear slowing down."

[KRonn]

Getting even more worrisome. I figured we were all, (our respective nations), slowly stumbling along but gradually making slow recoveries. But seems that things are, or could, become a lot more problematic everywhere.   

http://money.cnn.com/2011/08/05/news/economy/europe_debt_crisis/?iid=EL

NEW YORK (CNNMoney) -- A sharp drop in manufacturing, a towering debt-to-GDP ratio and a jaw-dropping decline in equity markets.

No -- not the United States. Europe!

Many of the underlying tremors that led to this week's steep sell-off in the U.S. have been festering in plain sight in Europe for a year or more.

Consider a few figures:

European indexes have been hammered over the past month, with the main exchanges of England (UKX) off 12.9%, France (CAC40) 17.6% and Germany (DAX) 16.7%.

The economies of Italy and France -- two of the continent's largest -- expanded by only 0.3% and 0.2% in the second quarter.

The problem?

Developed countries piled on massive amounts of debt during the recession.

Advanced economies worldwide increased their debt burden from $18.1 trillion in 2007 to $29.5 trillion in 2011, according to researchers at the Brookings Institution. And that's not the half of it. The number is projected to grow to $41.3 trillion by 2016.
Throw 3 coins in the fountain. Italy needs them

The bill collector has already come for some. Billions have been spent propping up Ireland and Greece, and investors have not been shy about sending yields through the roof when they smell blood in the water.

Investors lending money to Spain are now demanding interest rates of 6%, while Greek bonds carry a 15% rate and yields on Italian notes spiked this week to 5.5%.

Coupled with weak growth, the sharp increase in interest rates only adds to the countries' debt and makes it even more difficult for them to lower their debt-GDP-ratio.

There is some evidence that politicians are waking up to the scale of the crisis.
What's going on with Italy?

German Chancellor Angela Merkel and French President Nicolas Sarkozy planned to interrupt their summer vacations -- a hiking holiday in Italy and a three-week excursion to the French Riviera -- to confer by phone about the growing economic unease.

That's welcome news, because while the crisis started at the continent's periphery, it has now arrived at the gates of Italy and Spain.

And that, according to Domenico Lombardi, a senior fellow at Brookings and former International Monetary Fund executive board member, should worry policymakers in the United States.

"Italy has been hit," Lombardi said. "It's the third largest economy in the euro area, and there is no organization that can bail Italy out. It's just too big to swallow."

If the situation in Italy were to worsen, the impact could lead to weakening demand for U.S. exports, uncertainty in global currency markets, and consequences for U.S. banks that are exposed to the European banking system.

The timing couldn't be worse for the United States, which is about to engage in some fiscal belt-tightening as a result of the debt ceiling deal negotiated in Washington.

With the government pumping less money into the economy, policymakers need to find a way to increase demand for U.S. exports, Lombardi said.

"But this is certainly not going to come from Europe," he said.

The tremendous instability in Europe is yet another drag on an already weak U.S. economy and could increase uncertainly, spark a rush to safe-haven assets or delay major investments by American businesses.

"The economic recovery in the U.S. is inherently fragile," Lombardi said. "And this could have a dramatic effect on the job market outlook."

On Friday, EU Economic and Monetary Affairs Commissioner Olli Rehn tried to calm the swirl of rumors as markets bucked up and down.

"The market unrest witnessed in the last few days is simply not justified on the grounds of economic fundamentals," he said, having broken off his holidays to return to Brussels. "It is not justified for Italy. It is not justified for Spain."

But try telling that to bond markets.

[CountDeMoney]

That's nothing. Many people lost 401k.

[Ideologue]

Asia is strongly up this morning. 

Sometimes I get strongly up for Asia in the morning.

[The Brain]

Asia is strongly up this morning. 

That's just the heat of the moment.