An American Callous

Posted on November 12, 2011


In conjunction with the European debt crisis and the reduction of the United States perfect credit rating, stocks plummeted in August. In September a panic that Angela Merkel and other EU countries would fail to agree upon a second Greek bailout sent stocks further negative. Although gains were positive through the month of October news of broken deals and additional threats to abandon Greece sent stocks temporarily plummeting. Investors had good reason to fear potential abandonments of Greece as its solvency issues would surely have found its way to American markets, especially in the Wall Street banks that are supposedly driving the American Recovery. After several months of scares in the European Market, American investors seem to have cast their fears aside. In November it became clear that Italy would need a bailout. Italy’s expenditures have far exceeded their GDP for the past couple of years, and their borrowing costs are becoming impossibly high. Italy unlike Greece has a debt of 1.7 trillion Euros which is nearly too big to bailout. Despite Greece almost going bankrupt Friday and Italy showing signs of an irreparable market failure which would affect banks in nearly every European Country and the United States, it would seem American investors remain confident in a change of leadership. It is possible that the new Prime Ministers in Greece and Italy could create a solid plan to a solvent economy, but far more likely that Americans have become calloused to the likelihood of a European collapse and focused on the near certainty of an end of the year market rally.

Posted in: American News