Now incredibly, nearly three years later and in spite of central banks and powerful governments taking unprecedented and historic measures to right the global economy, we find ourselves steadily drifting toward the white water of another financial waterfall.
1. Standard & Poor’s downgraded, rightly or wrongly, the U.S. credit rating with a negative outlook. Over the medium term, this can’t be good for equities markets or corporate profits as confidence has been damaged, interest rates will very likely rise, growth will probably slow and all of this could work together to easily tip an economy that grew at just 0.8% in the first quarter into a double-dip recession.
2. China pounced on the U.S. downgrade, but things aren't so rosy for the dragon either, as its economy slides into contraction, according to a recent purchasing-managers index from HBSC that came in at 49.3 for July — a level not seen since the end of the financial crisis in March 2009.
3. Italy and Spain continue their convulsions, so strong and persistent that an emergency weekend phone meeting was called among European leaders, a couple of whom had to interrupt their near-sacrosanct August vacations to attend. German investor sentiment and PMI are also in decline, and a slowing German economy can only add to the already dour outlook for the once-shining euro and the global economy.
Global Government's need to take action, rather than 'out-skirt' economic management and realise traditional principles of economic policy and management have failed miserably. Highlighting markets over-reacting is a cop-out and proper economic management is a MUST
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