Markets rise and markets fall, but the declines overnight — 512.8 points or 4.3 per cent on the 30-share Dow Jones marker, 4.8 per cent on America's 500 share S&P 500 counter, 3.4 per cent in the United Kingdom, more than 5 per cent in Italy, 4 per cent in Spain, 3.4 per cent in Spain — are rarely seen.
The Dow's descent was for the biggest one day loss since December 1, 2008.
Asian markets have plunged, too. CNBC reports "Indiscriminate selling" in Chinese markets, and the Japanese Nikkei was holding steady but down 350 pts at the time of writing.
The South Korean government was reported to be holding an "emergency meeting" in response to a stocks plunge there.
Even resource rich Australia, which has more or les defied the global financial crisis until now, saw heavy selling on its stock exchanges overnight our time.
As usual, the immediate triggers were varied and somewhat unexpected.
Coming as fears grew that Spain and Italy would be dragged into Europe's sovereign debt crisis, it was enough to contaminate sentiment on Wall Street, where traders had already realised that government spending cuts tied to the increase in America's maxed-out borrowing limit would undermine growth, and perhaps tip the United States back into recession.
The crucial near-term hurdle for the markets comes tonight, when US jobs data is released.
The Dow's descent was for the biggest one day loss since December 1, 2008.
Asian markets have plunged, too. CNBC reports "Indiscriminate selling" in Chinese markets, and the Japanese Nikkei was holding steady but down 350 pts at the time of writing.
The South Korean government was reported to be holding an "emergency meeting" in response to a stocks plunge there.
Even resource rich Australia, which has more or les defied the global financial crisis until now, saw heavy selling on its stock exchanges overnight our time.
As usual, the immediate triggers were varied and somewhat unexpected.
Coming as fears grew that Spain and Italy would be dragged into Europe's sovereign debt crisis, it was enough to contaminate sentiment on Wall Street, where traders had already realised that government spending cuts tied to the increase in America's maxed-out borrowing limit would undermine growth, and perhaps tip the United States back into recession.
The crucial near-term hurdle for the markets comes tonight, when US jobs data is released.
The weight of debt bears down on economic growth by diverting resources to debt-service.
In a low growth environment the options for getting debt loads down narrow to cuts in government spending and income tax increases, basically.
Both add even more weight to the economy in the short and medium term.
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