Connect with us


Global Greek Freakout




|| By FITSNEWS || The Dow Jones plunged 350.33 points on Monday – nearly a two percent drop. Meanwhile the S&P 500 plunged by 43.85 points – or 2.09 percent of its volume.  The tech-heavy Nasdaq? It was down 122.04 (or 2.4 percent).

Those are the biggest point declines of 2015 …

America wasn’t the only country taking a beating.  Asian and European markets were also battered – with Germany and France’s key stock indices losing more than 3.5 percent of their value.  Japan’s Nikkei index was down 2.9 percent – roughly the same as Hong Kong’s Hang Seng index.

What’s prompting the global selloff?  The “Grexit,” a.k.a. the increasing likelihood that Greece will default on its obligations and leave the Eurozone.

Greece is supposed to make a €1.5 billion ($1.7 billlion) payment to the International Monetary Fund (IMF) this week – part of the €330 billion ($367 billion) it owes to creditors.  That payment isn’t happening.

So … what happens now?

Um … good question.

Greece represents just two percent of Europe’s gross domestic product, but there’s growing concern that a default and subsequent “Grexit” will contaminate the broader European market – a process known as “contagion.”  The greater the panic in the bond market, the more likely Greece’s problems will infect other European countries like Italy, Spain and Portugal – which are in similarly dire straits (and in need of the same debt relief Greece is demanding).

It’s the sort of domino falling that could easily lead to a broader global economic downturn …