Why the Market is Plunging
Here’s the Wall Street Journal, ladies and gentlemen, on what’s happening with the stock market. “US stocks tumbled to fresh session lows as noon approached, pushing both the Dow Jones Industrial Average and the Standard & Poor’s 500 index into correction territory, as worried investors staged a broad flight from risky assets.
The Dow slumped 351 points, or 3%,” midday. “Treasury yields hit fresh lows for the year. The benchmark 10-year notes rose 14/32 in price to yield 2.549%. In Europe –” and this is a key “– stock markets were sharply lower amid growing fears the euro zone debt crisis could intensify as the European Central Bank failed to provide help for the beleaguered Spanish and Italian economies,” meaning the European Fed didn’t bail ’em out.
Now, the European Central Bank, despite not bailing out Spain and Italy, they did have to pump a bunch of cash into the system today to keep it operating. They also borrowed money from us, if you can believe that, because the European Central Bank has access to the Fed window. The European Central Bank can go to the Federal Reserve and get money. We don’t have it. We’re printing it. Snerdley, you’re asking the right question. Where are we getting the money to loan? This is all a sick horror movie joke. So the euro zone is a failure. Got 17 countries, no common allegiance. They tried to replicate the United States by doing the European Union, and it’s a mess. Germany is the leader, they’re failing now, too, it’s ugly. We bailed ’em out in 2008. In the midst of our own financial crisis, we bailed ’em out in 2008. So, anyway, what’s happening in the euro zone is also a factor in addition to everything else that I have mentioned previously on today’s program.