Morning Brief: The banksters, the debt and interest rates; the press and football at loggerheads over coverage
For months now a certain segment of the political spectrum has been crying out for higher interest rates to defeat inflation that doesn’t exist. The Fed hasn’t raised rates since the reality of the situation is that inflation is nonexistent due to the sluggish economy. But now, thanks to S&P downgrading U.S. government bonds, it looks like those folks will get their wish.
The sad fact is, however, that the downgrade will increase calls for more budget cuts, which will depress the economy even further, leading to the inevitable next downgrade. It is a vicious cycle that we may be in.
The European Central Bank stepped in today and bought Spanish and Italian bonds, driving the yields down significantly on the 10-year bonds of both countries.
The move will be appreciated by both governments, but it is not doing much to lessen the fears of investors. European stock markets fell again today with the German DAX currently down two percent, the sixth straight trading day that the German markets have fallen by two percent or more. Asian markets all fell badly in trading Monday as the Hang Sang fell over 455 points, or 2.17 percent, while the Sanghai Composite fell almost 100 points, or 3.79 percent.
Dow futures indicated that the U.S. markets will open lower, as well. (Of course, that could simply be in response to the news that the worst Treasury Secretary in the history of the republican, Timothy Geithner, has agreed to stay on.)
The start of the British Premiere League season was this weekend, but press coverage was limited due to the continuing dispute between the league and The Newspaper Publishers Association, which includes the The Telegraph, The Guardian. The Independent, the Financial Times and other U.K. papers.
“We are sorry we are unable to bring you full coverage of the opening weekend of the Football League season, as we had hoped,” read The Telegraph’s story of the dispute. “This is due to an ongoing dispute between the media and the Premier League and the Football League over terms of accreditation.”
Speaking of football (soccer, that is): the Tottenham Spurs say they will play their opening home match this Saturday despite riots that occurred in the north London neighborhood which included damage done to the Spur’s ticket office.
The ticket office will remain closed until Wednesday. “As a major employer and business in the area, the club is deeply saddened by recent events,” a spokesman for the Spurs said yesterday. “We are concerned about the disruption to local people’s lives and the effect on the community as a whole.”
If you haven’t been keeping up with the news this weekend, London exploded with riots following the shooting by the Metropolitan Police of Mark Duggan, a 29-year-old father of four. The shooting at first led to protests in the community that soon spiraled out of control and has led to two nights of rioting in several north London neighborhoods.