It seems that another economic downturn is on the way in Europe and the financial market was reacting. On two of the most famous finance websites, both Yahoo! Finance and MSN Money addressed the current environment of the financial market in Europe in specific and in the world as general.
On the MSN Money website, heading with the title “Get Ready for the Next Crash,” Jim Jubak, reporter of MSN Money, explains what is going in the economy of Europe and its potential affect to the US and the world economy. According to the article, the financial market is expecting a replay of the US crisis in 2008 as many American giant banks went bankrupt in short time, starting with the Lehman Brothers. As the result, a heavy intervene by European Central Bank to bailout some major banks is expected by the financial market. In explaining the situation, the article reports that the root of the crisis came from debt crises in Greece, Italy, Germany, and Spain, and Protégée. Indeed, European banks have hold a huge amount of debt from the governments of these countries. However, because of series of mistakes by bank regulators, and central banks, Greece is showing its difficulty of carrying its debt. As Greek government debts are likely to be default, investors are expecting an expanding European crisis could take place as Greece finally declared default. So what is the suggestion for investors. It is get away from banks. So, investors now should pull money from banks to secure or low risk investment such as US bond because the crisis is taking place.
Similar to MSN Money, Yahoo! Finance also address the economy in Europe. Heading with the title “Fear of Greek default hurts markets in US, Europe,” Pan Pylas, the reporter of Yahoo! Finance also revealed that a fear of an expanding European crisis is taking place. Anyone is concerning with whether or not Greece will declare default on its government debts. Indeed, the market believes it will be a default eventually. From what is happening on the market currently, the article conclude that the market is expecting a same story of the US recession in 2008. What it means? It means that investors are expecting European Central Bank will do what the US Central Bank did before in 2008; they bailout some major banks. However, the reporter also point out that it is a little difference in the two story because the European Central Bank would not have enough power to intervene as much as the US Central Bank did before. From the article, countries such as Germany, Italy, Spain, and other European countries are preparing to face the upcoming crisis if Greece declare default on its government debts. They are all pessimist and be conservative to save themselves. So what is the suggestion for investors. Not surprisingly, the article agree the article from MSN Money that investors should pull money from banks to invest in secure low risk investment such as US bonds. Anyone should play conservative in bad time.
From the market overview page on both websites, the current indexes for DJIA is 11.061.12 up .63% from previous day, S&P500 is 1162.27 (up .70% from previous day), and NASDAQ (2,495.09 up 1.10% from previous day) . Below are the charts:
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