America in debt: a round-up of the lowlights (UPDATES)
It was a busy weekend for financial and market news. Get used to it.
A stock specialist watches prices on the floor of the New York Stock Exchange on August 4, 2011. The Dow Jones Industrial Average plunged 4.3 percent Thursday, its worst one-day drop in more than two years, as global markets melted down over fears of another world economic downturn.
It's been a dizzying few days for anyone paying attention to the U.S. economy and global markets.
And as GlobalPost has been diligently reporting, there are plenty of reasons to be concerned about the health of the fragile global economy right now.
Here's a quick recap of all the action:
- On Friday, Standard and Poor's downgraded America's AAA credit rating a notch.
- U.S. Treasury Secretary Timothy Geithner called that decision "really terrible judgement."
- Warren Buffett said S&P got it wrong.
- In an interview with CNBC yesterday, Geithner went a step further: "There is no risk the United States of America would ever not be in a position to meet its obligations."
- Treasury also accused S&P of being off by $2 trillion in its "basic math."
- China demanded that the U.S. cure its "addiction to debts."
- Meanwhile, the European Central Bank intervened on a handful of sovereign debt markets, hoping to avert a collapse of Italy, Spain and the euro.
- Group of Seven (G7) finance ministers and central bank governors early today put out a statement, saying that they would ensure liquidity and support the efficient workings of global markets: "These actions, together with continuing fiscal discipline efforts will enable long-term fiscal sustainability."
- Asian markets fell today, and Europe's stock markets are also sharply lower. Wall Street, too, is bracing for an ugly start.
UPDATE: Stocks on Wall Street continued to drop Monday in afternoon trading, with the S&P 500 Index falling 3.6 percent, and the Dow Jones Industrial average down 3.3 percent.
If you can stomach it check out the New York Times' Lede blog, which is offering good, up-to-the-minute coverage of today's market carnage.
As for the future, don't expect this global unease to end anytime soon.
According to influential investor Jim Rodgers, the debt downgrades are only just beginning.
"The idea that the U.S. is downgraded and the UK is not is lunacy. There are many countries, Belgium, Spain, lots of countries in Europe, that should be downgraded just as the U.S. has been downgraded," Rogers said in an interview with Reuters Insider.