Tuesday, August 9, 2011

Rise and Fall of Stock Markets

Rise and Fall of Stock Markets. Last week and on Monday, North American, English and German stock markets went though a serious smouldering. The Republicans were quick to point out it was because of S&P downgrading US credit rating from AAA to AA+, and blame President Barack Obama and Obama's fellow supporters.
Last week and on Monday, North American, English and German stock markets went though a serious smouldering. The Republicans were quick to point out it was because of S&P downgrading US credit rating from AAA to AA+, and blame President Barack Obama and Obama's fellow supporters.

The fact of the mater cannot be further from the truth, that it the markets experienced a mini-crashed because of two main reasons. One of which had nothing to do with the US debt crisis, and that was Central Bank of Europe had to "bailout" Spain and Italy out their economic calamities after Greece was taken care of. This clearly lowered the confident of investors.

Other primary reason is for loosing investor-confidence in the markets is that there's lack of consumer confidence here in US. USA accounts 70% of its GDP for consumer spending. Consumers can't spend if they don't have money, thus preventing companies from selling their products. One one wants to invest in a company that's unable to sell their products, and quite frankly, investors don't care as to why companies can't sell. If companies don't perform up their god-damn expectations, they simply walk away. And that's exactly what happened last week and on Monday.

Today, however, and to everyone's surprise, markets rebounded. Dow closed above 400 points. This further proves the fact that S&P downgrade had minimal effect on investors. If any Republican were to say, or as they have already, that credit downgrading caused the crash, they are completely and utterly false!
Search Obama'12 Articles ▼

OBAMA and Economy