European, world markets plunge on Greek debt fears

[Hannah Bell]

World stock markets fell sharply on Tuesday, driven by fears that massive spending cuts in Greece will be insufficient to resolve the country’s debt crisis, which threatens to expand to other European countries.

A strike of civil servants Tuesday, to be followed by a general strike of public and private sector workers on Wednesday, underscores the clash of social interests playing out in Greece and throughout the continent. The financial elite in Europe and internationally, with the support of the PASOK government of Prime Minster George Papandreou in Greece, is demanding unprecedented austerity measures. The trade unions, aligned with Papandreou, are struggling to contain overwhelming popular opposition.

The turmoil in Greece sent stock markets down sharply in Europe and the US. Particularly hard hit were share values of banks, which own much of the debt of Greece and other countries. In Athens, the market fell 6.7 percent, in Spain 4.3 percent, and in Portugal 4 percent. Markets in Britain, Germany and France fell between 2.6 and 3.3 percent. The euro fell to a 13-month low.

Across the Atlantic, the Dow Jones Industrial Average fell more than 224 points, or 2 percent, while the Nasdaq fell nearly 3 percent. A closely watched measure of market volatility rose 18 percent, indicating that investors anticipate more steep declines in the coming days and weeks.

Concerns about a spreading sovereign debt crisis beyond Greece—and demands for attacks on the working class—are currently centered on Portugal and Spain. Ratings agency Standard & Poor’s downgraded the debt of both countries last week.

http://www.wsws.org/articles/2010/may2010/econ-m05.shtml

[ZeitgeistObserver]

1. Yeah, I told people that this morning.

But nobody was interested.

[Hannah Bell]

3. weird. usually there's great interest. maybe everyone's out of stocks. or out of money?

[Prometheus Bound]

2. Hong Kong was down 2.11% at noon Wednesday.

In Shanghai it's the bank shares that are faring worst.

[fasttense]

4. Most people are waiting to see if this is the big one.

If you are a follower of Thom Hartmann, Ravi Batra or Max Kieser, you probably believe that this economy is going to have another really big crash. But before the really big one hits, you are going to see a few sudden drops in the DJIA. The DJIA will fall but go back up several times before the final big economic meltdown.

So, I suspect that many people are just holding their breath and waiting to see what happens.