- Art Cashin Warns Stock Rout Will Turn Into Full-Blown Panic If Contagion Spreads!
On the heels of a more than 330 point plunge in the Dow and a $3 drop in the price crude, which took the oil market below $50, today legendary Art Cashin warned King World News that the rout in stocks will turn into an outright panic if contagion spreads.
Eric King: “Art, people are becoming increasingly concerned with the action in the stock market and also the crude oil market. What should we expect from here?”
Art Cashin: “Oil was almost in virtual freefall today when West Texas Intermediate (crude oil) went below $50. That put extra selling pressure on stocks. You will also notice that it put pressure on things like the high yield market, which has roughly a 15 percent exposure in the oil area.
The other concern is Europe and the rumor circulating that Greece might consider exiting the eurozone, and that Germany might consider letting them. Now that may be people calling each others bluff, but the market was frightened enough to think that if Greece does it, then there is a strong likelihood that Italy, Spain, or Portugal might say, ‘Hey, we don’t want this austerity either. We’re willing to get out (of the euro).’
So that spread the contagion throughout the zone and put the euro in real danger, which is one of the reasons it broke the 1.20 level so readily today.”