In the past three trading days, U.S. markets recovered everything they lost last week. In the wake of S&P’s disastrous and ludicrous downgrade, the major indexes lost about 8 percent; since then they’ve gained that entire amount back and then some.
Read moreMarket Crash: Wall Street’s Credibility Gap Causes Freak-Outs
In case you stepped away for a few bucolic summer days, emulating Nicolas Sarkozy and much of France itself, you probably noticed that global markets swooned yet again on Wednesday to the tune of nearly 5 percent down before staging an equally impressive comeback on Thursday.
Read moreFlash Crash: Markets No Longer Reflect Economic Reality
Over the past 48 hours, global markets have lived a life cycle, from panic and fear through uncertainty and confusion, and then, finally, euphoria. The individuals and machines placing the trades have been along for the ride, and if you stepped away for lunch or coffee, you risked exiting the movie at a crucial plot point, asking distracted friends and colleagues, “What just happened?”
Read moreFlash Crash: Markets No Longer Reflect Economic Reality
Over the past 48 hours, global markets have lived a life cycle, from panic and fear through uncertainty and confusion, and then, finally, euphoria. The individuals and machines placing the trades have been along for the ride, and if you stepped away for lunch or coffee, you risked exiting the movie at a crucial plot point, asking distracted friends and colleagues, “What just happened?”
Read moreMarket Collapse 2011: How Crashes Are the New Black
Welcome to the crash of 2011. With stunning speed, global markets have sold off to a degree not seen since the worst days of late 2008 and early 2009. In fact, only three times in the past 40 years have stocks sold this hard this quickly, with a 16 percent decline in the S&P 500 in a 10-day period surpassed only by drops in the Octobers of 1987 and 2008.
Read moreDebt Default: How the U.S. Has Ceded Global Economic Power
So there you have it. The debt deal is done, and all that remains is for a ritualistic i-dotting and t-crossing, along with the howls of protest from left and right that their bedrock principles were violated in order to save the U.S. credit rating. But make no mistake: While Washington muddled through at the witching hour and avoided sending the global economic system into the vortex, what unfolded over the past few weeks will have repercussions, and they are not good for America.
Read moreMarkets Spooked by S&P Downgrade but Have No Alternative to U.S.-led System
And the beat goes on. Global markets have begun to digest the fallout from Standard & Poor’s scurrilous downgrade of American sovereign debt, and equity markets in Asia and Europe opened lower. Odd pockets of perceived safety rallied, like Swiss francs, and of course gold soared, as investors attempted to win the game of musical chairs on the deck of the Titanic.
Read moreWall Street Markets Collapse After Jobs Report and Double-Dip Recession Fears
U.S. stocks finished with mixed gains and losses on Friday, as investors responded to progress in today's jobs report and in the eurozone's debt crisis. The Dow rose 61 points as investors learned that Italy will speed up austerity measures. Prime Minister Silvio Berlusconi pledged that Italy would balance its budget by 2013, one year earlier than originally planned.
Read moreMarket Crash: Why Developing Countries Will Save the Old World
Carnage on Wall Street came fast and swift Thursday, triggered in part by a raft of European selling on the heels of less-than-reassuring remarks by the president of the European Central Bank. But that alone can’t account for a day that saw stocks down almost 5 percent—the worst day since the nasty days of February 2009.
Read moreDebt Ceiling: Unaccountable Credit Ratings Agencies Go Rogue
As the debt-ceiling storm intensifies, some reports indicate that the White House, and perhaps the global financial markets, are less concerned with paying bills after Aug. 2 than with credit-rating agencies imposing their first-ever U.S. government downgrade, from AAA to AA+.
Read moreDebt-Limit Debate: Wall Street Might Freak Out Today
For the past few weeks, as the debt-ceiling crisis has intensified in Washington, financial markets have been acting on the assumption that a deal will be done. This weekend, that changed.
Read moreDefault Risk: Wall Street’s Shocking Debt Denial
"The United States is not going to default on any obligation. We are not a credit risk, believe me." Calm words, coming from the financial sage of Omaha, Warren Buffett, and words meant to keep the markets calm in the face of mounting hysteria in Washington over the debt ceiling and potential default of the U.S. government. This perception—that Washington may go to the wire on Aug. 2 but that in the end, sanity will prevail—is widely shared on Wall Street and on bourses throughout the world. That is almost as disturbing as the debt mania, because if Buffett and the financial community are wrong, they are wholly unprepared for the consequences.
Read moreUnemployment Report: Why Jobs Won’t Be Coming Back Soon
So yesterday’s monthly employment report, which showed a net gain of merely 18,000 jobs, once again confounded the expectations of economists—and sorely disappointed those in Washington by showing precious little job creation in the United States.
Read moreLarry Summers’ Stimulus Dream Right—But Impossible in Current Political Climate
Larry Summers, former treasury secretary, former president of Harvard and the former head of President Obama’s National Economic Council, made waves yesterday with an unequivocal and passionate call for a new round of stimulus to address what he rightly perceives as a weak recovery for American jobs and economic activity in general. In his view, the U.S. economy is hobbled by weak demand for goods and services, compounded of course, by high unemployment.
Read moreBudget Debate and the Deficit Friendly Tax Cut
Washington is entering its summer of discontent, with no resolution of the budget and debt issues that will push the federal government to the brink of insolvency in early August. Among the many divisive issues: what to do about taxes in general and corporate taxes in particular.
Read moreObama and the GOP's Risky Gamesmanship Over Debt Ceiling Could Spur Another Credit Crisis
It’s official: the United States government is overdrawn on its debt limit of $14.294 trillion as of yesterday. Well, not technically overdrawn, as the U.S. Treasury directed by Secretary Timothy Geithner has taken a variety of measures to forestall any actual federal defaults on its operations—which range from keeping the lights on at the Smithsonian to maintaining combat forces in Afghanistan. These accounting sleights-of-hand will delay any actual defaults to early August. But still, after months of inconclusive wrangling by both parties, a new Rubicon has been crossed.
Read moreAT&T and T-Mobile: A Deal That Will Create a Friendly Cellphone Monopoly
After months when markets have oscillated on the ebbs and flows of political tumult in the Middle East and natural catastrophe and near-nuclear disaster in Japan, the business world was pleasantly rocked by the announcement of a mega-deal: the planned $39 billion acquisition of T-Mobile USA by AT&T. If the deal is approved, AT&T will add nearly 35 million new subscribers and vault past Verizon to become the largest wireless carrier in the United States with about 129 million customers, surpassing Verizon’s 100 million or so.
Read moreOil Price Increases Are Irrelevant to the Recovery
With gas prices approaching $4 at the pump and turmoil roiling Libya and other parts of the oil-rich Middle East, the past week has seen multiple warnings that rising oil prices imperil the American economy. David Rolley, a money manager who helps oversee $150 billion for the firm Loomis Sayles, is typical of the breed, declaring that higher prices at the pump
Read moreBen Bernanke ’60 Minutes’ Interview: What He Got Wrong
When Ben Bernanke and the Federal Reserve announced last month that it was initiating another round of $600 billion in “quantitative easing,” the reaction was swift and negative. The supposed profligacy of the Fed was yet another arrow in the Tea Party quiver and was used to support the contention that government spending is out of control.
Read moreObama's Misfire at the G-20 Summit in Seoul
With the leaders of the world gathering for two days of economic points and counterpoints under the aegis of the G-20, Seoul has become the scene of a showdown between a testy set of European and Asian powers and a rather flummoxed and flat-footed America represented by President Obama in all his post-Nov. 2 glory and malaise.
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