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Monday, August 8, 2011
In an exclusive interview with Press TV, Pietropoli, an economist with RM Wealth Management, said, “The markets, in many ways, have been completely misaligned with economic fundamentals over the last couple of years.”
“The markets are finally starting to price these matters in,” he added.
US, Asian, and European stock markets suffered heavy losses on Monday, with Friday's unprecedented US credit rating downgrade adding to the financial crises.
“We were living in this bubble territory where we perceived that governments can carry on running massive budget deficits forever, and that Mr. Bernanke will keep printing money and propping up asset prices,” Pietropoli stated.
On Monday, the Dow Jones industrial average fell 634 points, or about 5.55 percent, in one of its steepest declines ever in the first full day of trading since Standard & Poor's downgraded the US credit rating on Friday.
European stocks also continued to fall as fears grow that Europe's debt crisis is spinning out of control, with Greece, Ireland, and Portugal having already received bailout packages from the European Union and Italy and Spain in danger of becoming the next victims of the crisis.
Tokyo's Nikkei stock market fell 1.4 percent before making slight gains on Monday while Australia's S&P/ASX-200 index shed almost 2 percent in early trading, and indexes in New Zealand plummeted more than 3 percent.
On Sunday, the Saudi stock market rose slightly after diving 5.46 percent earlier in the day, while other Arab stock markets all plunged.
Last week, China's top ratings agency slashed the US credit rating from A+ to A, after having downgraded the US credit rating from AAA to A+ in November.
Image Source | Getty Images
Even U.S. Treasuries soared, despiteStandard & Poor's downgrade of the United States' prized triple-A credit rating, a move that unsettled investors already worried about festering debt problems on both sides of the Atlantic.
"We're in a skittish market and the market is looking for a some sort of circuit break. Chinese data today might potentially do it," said Grant Turley, senior currency strategist at ANZ in Sydney.
August 8, 2011
In this 8/8/2011 special report, Alex Jones covers the United States’ downgrade from AAA credit rating, the dramatic stock plunge, and the related exploding price of gold. He also touches upon other news stories he was unable to get to during the radio show, including the comments of former first lady Jackie Kennedy about LBJ concerning the JFK assassination.
The Infowars Nightly News airs nightly starting September 1st; Become a PrisonPlanet.tv member today and be the first to get exclusive updates, special news reports, rants and more…
The dollar’s back is close to being broken. Despite near-term interventions and extreme volatility, the heavy dollar selling that follows will be highly inflationary. . . “
The Guardian reports that while Western media has been silent on the issue Greece is in an absolute state of panic facing a Great Depression style run on the banks as people race to withdrawal their cash.
Aug 8, 2011
A number of economists, investors and financial experts have weighed in on the US debt crisis today, following Friday’s S&P downgrade, warning that economic meltdown is close.
Renowned Economist Nouriel Roubini, who predicted the 2008 crash and has been predicting a double dip recession for some time, noted in the Financial Times today that the recent media driven impression of a short term “recovery” was a “delusion that has been dashed.”
“Even before last week’s panic, the US and other advanced economies were odds-on for a second severe recession.” Roubini writes.
“America’s recent data have been lousy: there has been little job creation, weak growth and flat consumption and manufacturing production. Housing remains depressed. Consumer, business and investor confidence has been falling, and will now fall further.”
The New York University professor, who recently warned of a “perfect storm” of fiscal woe converging on the global economy in 2013, states that he believes avoiding another severe recession is tantamount to “mission impossible”.
“Until last year policymakers could always produce a new rabbit from their hat to trigger asset reflation and economic recovery.” Roubini writes. “Zero policy rates, QE1, QE2, credit easing, fiscal stimulus, ring-fencing, liquidity provision to the tune of trillions of dollars and bailing out banks and financial institutions – all have been tried. But now we have run out of rabbits to reveal.”
In comments to CNBC, legendary investor Jim Rogers noted that The US does not even deserve a AA+ debt rating, much less a AAA rating.
“It seems to me it’s physically, humanly impossible for the U.S. to ever pay off its debt ,” Rogers said. “They can roll it over and continue to play the charade, but the U.S. is bankrupt.”
S&P Executive John Chambers told Fox News that a partial reason for Friday’s downgrade was due to the fact that the US political system has proven itself to be “dysfunctional”.
“I think that’s a good word.” Chambers said. “We got to a position where we were within ten hours of having a major cash flow problem. This is not what happens in other countries.”
HSBC chief economist Stephen King weighed in, suggesting that “The downgrade by S&P, the ratings agency, merely confirms what everyone already knew,” namely that “fiscal rot set in years ago” in the US.
“Even before the financial crisis, the fiscal path was unsustainable: an ageing population combined with extravagant social security commitments suggested either the need for massive tax increases or draconian spending cuts,” said King.
Stocks have dramatically slumped this morning with The Dow Jones Industrial Average decreasing 328.92 points, or 2.9 percent, to 11,115.69.
“The U.S. credit rating downgrade extended a rout that wiped out $1.94 trillion in market value from the country’s stocks.” reports Bloomberg.
Asian stocks tumbled with some of the biggest US debt holders warning that the US is acting “immorally” and “irresponsibly”.
Presidential candidate Ron Paul, for years the leading voice for sound monetary policy in the US, responded to the downgrade yesterday, noting “I’m surprised it took them so long to downgrade, I didn’t think (S&P) should have had that rating for a long long time.”
“it’s interesting that when we were working on raising the debt limit, over my objection, they can say ‘well if you don’t raise the debt limit, we’re going to downgrade you’, so we raise the debt limit and they downgrade anyway.” The Congressman added.
Warning of a coming inflationary dollar crisis, Paul stated “The Congress is making even bigger mistakes because they keep talking about slashing and cutting and all this, but there have been no suggestions of cutting anything at all.”
EL PASO, Texas, Aug. 4 (UPI) -- U.S. officials let the Sinaloa drug cartel smuggle tons of cocaine into the United States in exchange for intelligence about rival cartels, court documents say.
The claim was made by attorneys in defense of Mexico's Vicente Zambada-Niebla, who was extradited to the United States to face drug-trafficking charges in Chicago, the El Paso (Texas) Times reported.
If the claim is true, it could prove to be as damaging to federal investigators as the Alcohol, Tobacco and Firearm's "Operation Fast and Furious," that let U.S. weapons get into Mexico, the report said.
Documents filed in U.S. federal court said the Sinaloa cartel was allowed to bring tons of cocaine into the United States in exchange for information about rival cartels, The Houston Chronicle reported.
The documents also said Zambada-Niebla worked as an informant for the U.S. government while he was a known fugitive.
Read more: http://www.upi.com/Top_News/US/2011/08/04/Court-documents-say-US-knew-about-coke/UPI-87601312468705/#ixzz1US3pHI4j
Taliban Spokesman Zabihullah Mojahid claimed responsibility for the crash, which occured in Zarmat city on Monday, saying 33 American troops were killed in the downing, a Press TV correspondent reported on Monday.
Separately, another NATO chopper made a hard landing in the same area in eastern Paktia province late Sunday, Afghan witnesses and officials told Press TV.
The US-led NATO forces have cordoned off the scene of the incident, witnesses said.
The incident has reportedly left some casualties, but there are no words yet on the exact number of the killed or injured.
The main cause of the incident is not clear yet.
Meanwhile, the US-led alliance issued a statement and confirmed that the helicopter made an emergency landing. The statement said no one was injured and that it has launched an investigation into the incident.
The incident came in the wake of a similar incident on Saturday, which claimed lives of 31 US forces.
Taliban claimed responsibility for Saturday helicopter crash, but NATO said it has started an investigation into the incident.
WSWS, August 6, 2011
The Obama administration is preparing a new military intervention in Somalia under the pretext of humanitarian concern for starving drought victims. The media has fallen into line with a campaign mixing crocodile tears and hand-wringing with denunciations of the Islamist movement al-Shabaab, which is blamed for the deepening crisis.
Just as the bombing campaign in Libya was launched with appeals to save the civilian population of Benghazi from slaughter, so now a fresh intervention is being prepared in Africa supposedly to save the starving children of Somalia. This is a cynical exercise in public deception.
Al-Shabaab is at most 10,000 strong, according to a report produced for the US Council on Foreign Relations. Its most loyal forces probably amount to only a few hundred fighters. It has no organisational connections to Al Qaeda, according to the National Counterterrorism Center.
When Standard & Poor's reduced the nation's credit rating from AAA to AA-plus, the United States suffered the first downgrade to its credit rating ever. S&P took this action despite the plan Congress passed this past week to raise the debt limit.
The downgrade, S&P said, "reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."
It's those medium- and long-term debt problems that also worry economics professor Laurence J. Kotlikoff, who served as a senior economist on President Reagan's Council of Economic Advisers. He says the national debt, which the U.S. Treasury has accounted at about $14 trillion, is just the tip of the iceberg.
By ROBERT PEAR
Published: August 7, 2011
WASHINGTON — The downgrade of the United States government’s credit rating by Standard & Poor’s is almost sure to increase pressure on a new Congressional “supercommittee” to mute ideological disagreements and recommend a package of deficit-reduction measures far exceeding its original goal of at least $1.5 trillion, lawmakers said Sunday.
Even before the panel is appointed, its mission is expanding. Its role is not just to cut the annual budget deficit and slow the explosive growth of federal debt but also to appease the markets and help restore the United States’ top credit rating of AAA. Otherwise, taxpayers may eventually have to pay more in interest for every dollar borrowed by the Treasury.
The report certainly got the attention of Capitol Hill. “I think this is one of the most telling, important moments in our country’s history right now,” Senator John Kerry, Democrat of Massachusetts, said Sunday on the NBC program “Meet the Press.” He added: “This poses a set of choices not just about a recession. It’s about a financial crisis and the structure of our economy, which really has been misallocating capital.”
In the S.&P. report on Friday outlining the reasons for removing long-term Treasury debt from its list of nearly risk-free investments, the company cited doubts about the ability of the two political parties to bridge their gulf on fiscal policy.
Credit rating agencies have thus emerged as a powerful constituency whose concerns are taken seriously by Congress.
Representative Joe Courtney, Democrat of Connecticut, said he had “read and reread the S. & P. report” several times since it was issued Friday night, and he said it could spur action by Congress. If the 12 members of the committee, to be appointed by Aug. 16 by Congressional leaders of the two parties, could agree on a deficit-reduction package, and if Congress approved it, Mr. Courtney said, “that would surprise a lot of skeptics” and could disprove the company’s criticism of the United States political system.