US Deficit Up: Dow and Euro Nosedive
US Deficit
On June 1, 2010 the US Treasury Department released the deficit figures for May; the United States national debt is close to $13 trillion dollars. Quite a staggering statistic, that equates to over $40,000 of debt for every man, woman and child in America. How long can America sustain this kind of debt?
European Debt
On Friday, Hungary was the latest European Union nation to issue dire debt warnings. Hungary now joins a growing list of European countries in financial distress. Greece, Portugal, Italy, Ireland and Spain all have major debt problems.
Although the Euro is not the currency of Hungary, their debt warning sent the Euro into a tailspin. The Euro closed at a 4 year low of below $1.20.
The Dow Tanks
On Friday June 4, 2010 the Dow closed below the 10,000 mark at 9,931.97 down 323.31 points; this is a 3.15% loss of the market. The Dow has not closed this low since February and is down 10% from the April highs.
Wall Street took a dim view on the weak jobs report released on Friday. Overall there were 431,000 jobs created which was below expectations; the problems with the jobs numbers was the bulk of new hires (over 400,000) were temporary government Census positions. The Department of Labor reports 15 million Americans are unemployed but due to the temporary Census workers the unemployment rate is down slightly to 9.7%.
The widening of the European Union debt problem and the sinking of the Euro also had a significant impact on the markets.
To a lesser extent, the BP oil spill and the natural disaster it is creating in the Gulf is probably adding jitters to the market.
Global economic stability will be on the agenda for the G-20 summit later this month; let's hope they can develop some constructive financial solutions.
There appears to be no end in sight to the rising US debt, European economic woes and market volatility.
Global economic deficits and wide market swings do not encourage private sector job creation.
Sources:
www.dol.gov
Dow drops 324 points as euro sinks
By Alexandra Twin, senior writer June 4, 2010: 7:19 PM ET
CNN Money
http://money.cnn.com/2010/06/04/markets/markets_newyork/index.htm
Private employers hold back on hiring in May
Associated Press June 4, 2010
G-20 finance chiefs mull deficits, banking rules
Associated Press June 5, 2010
Elaine Kurtenbach, AP Business Writer, On Saturday June 5, 2010, 2:24 am
Published by James Fenelius
I am a life long New Yorker who moved to New Jersey in 2009 to be closer to family. I have worked in the Telecommunications/IT industry for over forty years. I was an instructor at the South Shore Adult Educ... View profile
- Euro on the Ropes as Greece Debt Crisis Grows ContagiousEuro hits five-month low on S&P 500 tumbles. Fear of Greek debt crisis spreads to Spain and Portugal, sends Euro lower. Forex futures and options forecast for Euro shows many fear further losses.
The Debt Crisis in Greece Threatens the Global EconomyHow does the Greece Debt Crisis affect the United States? It is important and every American needs to understand why.- The Myth of the U.S. Trade DeficitOverblown fears about the burgeoning trade deficit, along with a slowing U.S. economy, could spark protectionist policies in Washington, which could then trigger retaliations around the globe.
Adult Attention Deficit Disorder (AADD) and Money: Turning a Setback int...Adult Attention Deficit Disorder is a disorder which affects millions of Americans and it comes out in their finances. Learn how you can mitigate it and get your finances back o...- The Deficit and Why it Won't Go Awaya look at some of the reasons the U.S.'s enormous deficit will not soon be solved.
- The Euro Weakens as Spain's Debt Grows and Greece Still Struggles
- G20 Economic Summit - Whither the Global Economic Future ?
- Understanding the National Debt
- Deflation: The Next European Crisis?
- Attention Deficit Disorder, Autism or Just Active?
- Current Economic Depression Requires a Debt Default by Next Election
- Worries Mount that Dubai World May Default on $60 Billion Debt
12 Comments
Post a CommentGreat article James!
YOu know James, if this nation ran households with the same kind of debt structure that the U.S. and other nations did, the world would be in chaos. I shudder to think of the world we are leaving behind for my children and grandchildren.
Excellent business report! Thanks!
Very scarey! Good report.
I'm hoping the economic turmoil gets less rocky and that they get on top of that BP oil leak, too. So much seems to be happening at one time!
Yet, the current Party in power continues the tax and spend formula. I guess, in today's world, up is down and down is up.
Shocking, isn't it? Thanks for the update. LOL > David
GE stock is going at a great price as a result.
Years ago when sailors saw a storm coming at them at sea, the expression of alarm was "Thar she blows!" Today, we should be shouting the same thing as the apocalyptic collapse of the global economy lands right on us.
good write, James