The stock market lost190.57 points today after a report from Fitch Ratings stated what most financial experts already knew: the contagion spreading through the European Union which will collapse their continental economy will also collapse our American banks.
As detailed in an earlier report, our banks have exposure to European Credit derivatives in the hundreds of trillions of dollars. Although this exposure is well known, the federal reserve, treasury department and Congress seem to be oblivious to this situation. It is possible that our leaders have become resigned to the eventuality that they are unable to address the impending collapse of our entire financial system. If this is true, they have become the ultimate looters as in outlined in Atlas Shrugged. Since Congress will not be able to profit from insider trading once new legislation is passed, it appears that they will walk away with their fortunes and wash their hands of sworn duty to serve the country.
A classic definition of evil is serving yourself instead of serving the people who you are elected to represent. The 60 Minutes interview with Nancy Pelosi gave America a glimpse of this evil
U.S. stocks tumbled, erasing yesterday’s gains, as Fitch Ratings said further contagion from Europe’s debt crisis will pose a risk to American banks and amid concern higher oil prices will hamper economic growth.
Financial shares led Standard & Poor’s 500 Index losses as Citigroup Inc. (C) and Morgan Stanley dropped at least 4.1 percent. Dell Inc. (DELL) sank 3.2 percent as the personal computer maker told investors to expect slower sales growth for the rest of the year.Abercrombie & Fitch Co. (ANF) tumbled 14 percent as profit at the clothing retailer trailed estimates. Rambus Inc. (RMBS) plunged 61 percent after losing a jury trial against Micron Technology Inc. (MU) and Hynix Semiconductor Inc. Micron surged 23 percent.
The S&P 500 slid 1.7 percent to 1,236.91 at 4 p.m. New York time. The Dow Jones Industrial Average fell 190.57 points, or 1.6 percent, to 11,905.59. Oil rose above $100 a barrel.
“It’s fear of the unknown spooking the market,” Madelynn Matlock, who helps oversee about $14.5 billion at Huntington Asset Advisors in Cincinnati, said in a telephone interview. “There may be more exposure to Europe out there than people really think even if banks think they are covered. It’s going to be a tough market for quite a while,” she said. “Increasing oil prices is a concern because it’s like a tax on the consumer.”
Stocks extended losses after Fitch said that while U.S. lenders have “manageable direct exposures” to Greece, Ireland, Italy, Portugal and Spain, further turmoil in those markets poses a “serious risk.” Equities also fell after the Bank of England Governor Mervyn King said Britain faces a “markedly weaker” outlook for the economy as Europe’s crisis threatens global growth.