Worries About Europe’s Fiscal Health Rattle Asian Stocks

[Elmore Furth]

Source: NY Times

HONG KONG — Stocks plummeted across the Asia-Pacific region on Monday and the euro plumbed fresh multi-year lows against the dollar and yen, amid disappointing U.S. jobs data and renewed fears that the European sovereign debt crisis could spread to other vulnerable economies.

The combination of worrying news from both the United States and Europe sent already deeply nervous investors around the globe heading for the exits: Wall Street fell more than 3 percent on Friday, and the Japanese stock market slumped 3.8 percent on Monday.

European stock markets also were expected to begin the week with a fall.

“Over the past week, we’ve seen U.S. economic data becoming more spotty, and purchasing managers’ indexes in Asia showing a moderation of growth there — it’s all piling on to show that the global economy is facing a more difficult growth environment,” said Emil Wolter, head of Asian strategy at RBS in Singapore.



Read more: http://www.nytimes.com/2010/06/08/business/08markets.html?src=twr

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The euro sank to four-year lows on Monday and stocks and commodities fell as increasing market volatility prompted investors to shed even more risky bets.

Disappointing U.S. jobs data on Friday and fears that euro zone debt problems were worsening spurred already nervous investors to face up to the risk the recovery of the world economy is faltering, although few see a recession as likely.

The euro's drop on Monday was caused in part by some stop-loss selling around $1.1950. Traders said more aggressive stop-loss selling may be had if the euro falls under $1.1850.

After that, some analysts said the common currency could fall all the way to $1.15.

http://www.nytimes.com/reuters/2010/06/07/business/business-us-markets-global.html?ref=business

Asian markets tumble on fears over Hungary

By PAMELA SAMPSON, Associated Press Writer Pamela Sampson, Associated Press Writer – 1 hr 52 mins ago
BANGKOK – Asian stock markets tumbled Monday, dragged down by weak U.S. employment figures and fresh fears that Europe's debt crisis is spreading to Hungary.

Oil was also buffeted, falling to near $70 a barrel, while the dollar fell against the yen and gained versus the euro.

Japan's benchmark Nikkei 225 stock average plunged 349.70 points, or 3.5 percent, to 9,552.69 with investors also cautious before Japan's new leader, Naoto Kan, forms his Cabinet on Tuesday.

The result underlined that the U.S. economic recovery is not yet picking up the momentum that investors have been looking for. The Dow Jones industrial average plunged Friday 3.2 percent to 9,931.97. Major indexes all lost more than 3 percent.

http://news.yahoo.com/s/ap/20100607/ap_on_bi_ge/world_markets

[KT2000]

1. Why Is Europe falling apart

Did they get caught up in the same house of cards that took down the US?
It this because of AIG/Goldman Sachs/ et al?

[Art_from_Ark]

2. It has to do with the euro

Smaller countries, like Greece, are having financial troubles, and Greece alone has been promised $1 trillion worth of new euros as a bailout measure. Spain, Portugal and Ireland are said to be having problems, too, so there is some concern about how long the euro, which is not even 9 years old, can last.

[Odin2005]

3. One currency, seperate countries with their own budgets = disaster.

Europe has 2 choices, either dump the Euro or centralize government spending decisions.

[GreenPartyVoter]

4. I don't see them centralizing the spending decisions.

[Art_from_Ark]

5. I would not disagree with that statement about separate budgets

But given that most of these Mediterranean countries were eager to join the euro because their own currencies were in terrible shape, I can't see them wanting to return to the old system, at least for the short-term.

At any rate, I think that separate national budgets with one centrally-controlled currency is one of the reasons why Sweden, Norway, Denmark, Switzerland and the UK have kept their respective currencies.

[Imajika]

6. Too much debt and too little growth..

Too many European countries vastly overspent and don't have the economic growth to grow their way out of it.