Global markets dropped sharply overnight, but the real test will be
what happens today. CNN analyst Christine Romans notes that markets
have basically remained calm and that stocks in some of the banks rose,
as investors had months to prepare for the Moody’s review of the banks,
which started in February. In the long run, though, the lower rating
will force banks to pay higher costs for lending and borrowing, which
will make both more difficult while these largest banks try to
strengthen their asset positions.
But that’s only a secondary worry, as Romans explains. The ratings
change and the weak position of the banks reflect a weakening global
economy that looks just about ready to tip over into another recession......
Read the whole thing, and then be sure to ask the Democratic party and President Obama
how the private sector is doing.
