Hello. Today, Standard & Poor's warned that it may downgrade the credit ratings of 15 of the 17 Euro Zone countries if leaders cannot deliver a convincing agreement on Friday regarding how to solve the region's debt crises. Click here to check out a full article by Reuters on the subject.
This is a huge move by S&P. Imagine the effects this would have on the global markets. When S&P downgraded the U.S., albeit the largest economy with the most power, the Dow tumbled between 500-600 points. (I can't remember exactly how much.) If they downgraded the credit ratings of 15, yes 15, countries, I can't even fathom what the result would be. Down 1,000? I'm not really sure. Maybe people don't give as much weight to S&P downgrades after the U.S. debacle. There was talk of that, but I don't think that is the case. I think there is no doubt this downgrade would come with horrendous effects.
Hopefully the Euro Zone leaders can piece together a real plan. This has failed in the past, but perhaps with a looming threat from S&P, leaders will figure it out this time. They need to tighten up their belts in the form of rigid austerity measures in order for these massive levels of debt to begin to dissipate (be paid off).
This is the last post for me between now and the end of finals. I hope everyone has a great day.
Cheers,
EZ
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