Markets Tumble on Eurozone Debt Crisis Fears! Wall Street Falls As Debt Default Day Edges Closer!

• The financial quakes will get bigger and bigger. This Thursday is major event day. It is the Obama dateline for debt ceiling agreement and submission to the House for vote by 2 August. This Thursday is also the crisis summit for the 17 Eurozone countries to discuss the spreading sovereign debt crisis. I believe eventually the debt ceiling will be raised and QE3 will start. How the snakes plan to get there is another matter. They may drag this beyond 2 August, cut social security, Medicare… but pay the interest on the debts to prevent a default. This will result in social unrest, riots, tax revenue collapse and eventually a default. Got gold yet?
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  Markets tumble on eurozone debt crisis fears
  By Emma Rowley, http://www.telegraph.co.uk/
  Mounting fears that politicians will fail to resolve the eurozone’s debt   crisis sent markets sliding and Spain and Italy’s borrowing costs nearing the “point of no return”.
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  Investors are unconvinced that the euro-sharing nations will manage to reach agreement on a second bail-out for Greece before Thursday’s crunch summit in Brussels. Continued deadlock over how to contain the crisis raises the risk of Athens being forced into a disorderly default, which could wreak havoc on the global financial system, or of other, bigger economies becoming swept up also.
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  The yields, or returns, on Spanish and Italian 10-year government debt hit euro-era highs over 6pc as investors demanded greater reward to shoulder the risk. The borrowing costs implied by such yields close to the levels where governments can not afford to fund themselves and must be bailed out, said analysts.
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  “If we reach 7pc on Spain and Italy, we are probably approaching very quickly the point of no return,” said Nicola Marinelli, a fund manager at Glendevon King Asset Management. “Once the market is shut, it is   shut for good. The examples of Greece, Portugal and Ireland are clear.”
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  Gold breached $1,600 an ounce for the first time as the turmoil, combined with the row in the US over its debt ceiling, sent investors scurrying towards the “safe haven”.
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  Wall Street falls as debt default day edges closer
  By Richard Blackden, http://www.telegraph.co.uk/
  Stock markets fell on Wall Street as the prospect of the US government defaulting on its debts moved a step closer after another day of political paralysis in Washington.
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  With no signs of progress from the series of parallel debt talks on Capitol   Hill, investors moved quickly to reduce their exposure to shares in what is   shaping up to be a fraught four trading days. The S&P 500 dropped 10.66   – 0.81pc – to 1,305.48, while the Dow Jones Industrial Average was down   92.34 – 0.74pc – to stand at 12,387.39.
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  Despite a slew of America’s biggest companies, including Coca-Cola, Apple and Goldman Sachs, reporting results this week, Wall Street’s attention is now riveted on the negotiations aimed at lifting America’s $14.3 trillion (£8.9 trillion) debt ceiling.
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  The markets “continue to have whipsaw trading as macro news continues to confuse and concern investors”, said Mary Ann Bartels, a strategist at Bank of America Merrill Lynch. “Investors are understandably maintaining a low profile.”
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  The relatively relaxed attitude Wall Street has so far taken to talks that began two months ago is now being replaced by growing anxiety as the August 2 deadline approaches. US Treasury Secretary Tim Geithner has warned that if the debt ceiling – or the country’s legal borrowing requirement – hasn’t been raised in two weeks time then the government will no longer be able to pay all its bills.
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  With some politicians in Congress downplaying the significance of a temporary default on its debts, on Monday ratings agency Fitch said that America risks losing its prized AAA credit rating for the first time in its history. “Agreement on a credible fiscal consolidation strategy will secure the US ‘AAA’ status,” Fitch said. “Failure to do so will inevitably weaken the sovereign credit profile.” The warning echoes those made by Standard & Poor’s and Moody’s last week.

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