New York - Arabstoday
Global markets continued to fall as US stock markets opened with a loss following the Asian and European slump on the first trading day after S&P’s kicked America out of the AAA club. US stocks continued falling, with the Dow Jones industrial average down more than 300 points in morning trading. The weekend was an anxious time for investors who had been awaiting Monday\'s market opening after Standard & Poor\'s dropped its bombshell on Friday night. Fears were realized when leading stock indexes in Asia fell more than two per cent. Most European stock markets were recently down more than three per cent, in a sign of the climate of uncertainty worldwide. Johan Van Overtveldt, editor-in-chief of Trends magazine, Belgium’s leading business monthly, says the mood on the global markets remains negative. “In any case the market is falling further and I can refer to what we saw in Europe this morning, where we saw for brief period of something like one to two hours even slight increase in the markets that went away after that. So, overall it is difficult to judge hour from to the hour but overall we can say the negative sentiments that were there last week very pronounced are still there,” he said. On Monday, S&P’s also estimated that there is at least a one-in-three chance the US rating could go lower still within the next six months to two years. The agency believes that not enough has been done and Washington needs to halt the ongoing cycle of borrowing and spending. Also on Monday, S&P announced that it was also downgrading the debt of mortgage giants Fannie Mae and Freddie Mac, which rely on US government guarantees. And though the current plunge is not as sharp as the 2008 fallout, when America’s fourth-largest investment bank, Lehman Brothers, declared bankruptcy, the two still bear comparison, Van Overtveldt thinks. “I think we are approaching that kind of situation, with the exception that Lehman Brothers was a kind of big bank. Now we are in a situation where we are on a gradual path down in terms of growth prospects in the United States, in the eurozone,” he declared. Now many lawmakers and average Americans believe there is an imbalance in spending by the US government. They say the priority is still on military spending – wars, arms and equipments – and spending money overseas, outside national borders, while people in the US need jobs and funds most of all. However, Harlan Green, editor and publisher of PopularEconomics.com, believes that the actual numbers on the economy are better than the figures now making the headlines.