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  • Italy and Spain: Tremors in World Markets

    Italy and Spain are no contributing to the precipitous drop in stocks on the world markets, because analysts believe, not only is the severity of the financial issues for Italy and Spain serious – they are starting to become urgent. The other issue is that the financial community is starting to believe that the reset or rescue package for Italy and Spain doesn’t go far enough to contain the contagion, which might cause a run on European financial institutions.

    Italy and Spain are contributing to the precipitous drop in stocks on the world markets, because analysts believe, not only is the severity of the financial issues for Italy and Spain more serious than first anticipated – they are starting to become urgent. The other issue is that the financial community is starting to believe that the rescue package for Italy and Spain doesn’t go far enough to contain the contagion, which might cause a run on European financial institutions, which would be catastrophic on world markets.

    This is a grave issue, especially with the American financial system badly hobbling. In the New York Times article, Worries Rise Over Spain and Italy Debt , Liz Alederman and Matthew Saltmarsh explain how fragile the world markets are, and how the disruptions in Italy and Spain, probably couldn’t come at a worst time.

    Alderman and Saltmarsh state, “Two weeks ago, the markets seemed to be on firmer footing after the new bailout of Greece was structured to prevent contagion. But on Tuesday, traders renewed their attacks on Italy and Spain pushing their borrowing costs, at least for now, to the tipping point that led Greece, Ireland and Portugal to apply for bailouts….Some people now fear that Italy and Spain could run out of cash to meet their debt obligations in a matter of months if, like the others, they are shut out of international markets.”

    I have discussed with many Upstart: Business and Management for 20-40 Year Old Professionals members, and I think business as usual as we know it, might be forever over, which also might be a good thing. Much of this debt was created indiscriminately and wantonly, without borrowers ever considering the consequences of their ephemeral decisions: now the bill is due and everyone is broke.

    Good Luck.

    Calvin Wilson
    Founder and CEO
    Upstart: Business and Management for 20-40 Year Old Professionals
    calvin.wilson1@verizon.net
    http://twitter.com/Upstart__Nation

     

    Filed Under: Global Business

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