Sovereign debt fears stalk world markets

AP/Google ^ | 12/9/2009 | Pan Pylas

[mojito]

LONDON — World stock markets fell Wednesday as investors worried about sovereign credit risks, particularly in Europe, in the wake of Greece's rating downgrade.

The FTSE 100 index of leading British shares was down 35.95 points, or 0.7 percent, at 5,187.18 while Germany's DAX fell 62.93 points, or 1.1 percent, at 5,625.65. The CAC-40 was 20.12 points, or 0.5 percent, lower at 3,765.18.

Wall Street opened lower despite earlier indications in the futures markets that U.S. stocks were looking to recoup some of the previous session's losses. The Dow Jones industrial average was 39.30 points, or 0.4 percent, lower soon after the bell while the broader Standard & Poor's 500 index fell 4.48 points, or 0.4 percent, to 1,087.46.

Sentiment in the market has been knocked in the last couple of days by worries about a global debt crisis. Moody's Investor Services said the United States and Britain must get a grip on their public finances to avoid threats to their top triple-A credit ratings and Fitch downgraded its rating on Greece.

[mojito]

No, no, the markets have it all wrong. We need another stimulus bill, just like President Bambi said. We need massively expensive socialized healthcare. We need more monitization by the Fed.

Let's keep the party rolling!

[jiggyboy]

Sentiment in the market has been knocked in the last couple of days by worries about a global debt crisis

Hah, as though we had a global debt crisis, then it was all fixed, which is why the DJII hit 10K again, and now, oh my, we could have a whole brand new global debt crisis that has nothing to do with the previous one, the one from six months ago, that was completely fixed.

[dirtboy]

Hmmm - central banks keep interest rates low. Large private banks borrow that money and buy Greek sovereign debt and make a lot of money because of the interest rates, because of the potential risk. Now, when the risk comes to pass, will the German central bank bail Greece both to hold the Euro together and to cover those private banks so they don't get hosed?

That's the entire problem here - private banks have come to expect a bailout as they make a killing on risky investments - but the high interest rates are supposed to be what covers the risk. So we instead are getting even more risky behavior.

[Zuben Elgenubi]

Greece is teetering and will most likely fail financially by Christmas. Italy and Ireland will rapidly follow the same.

[Lurker]

Greece is teetering and will most likely fail financially by Christmas. Italy and Ireland will rapidly follow the same.

Merry Christmas to you, too.

[Zuben Elgenubi]

Hey, I just Report. There are hundreds of articles written today about the financial conditions of Greece, Ireland and Italy. I just summed it up for you.

Merry Christmas to you too.

[NeoCaveman]

Not to mention: Ukraine, Estonia, and Latvia among others.