Trade News: Global Economic Woes Result from Debt Crisis

From OECD (also appeared in the WSJ): Our Economic Woes Need a Long-Term Fix. Short-term emergency actions will only bring short-term relief. The world economic outlook has weakened. Growth is losing steam in many of the advanced economies and uncertainty has reached new highs. Public and private debts are holding back investment and consumption. Financial markets have become increasingly turbulent. The rating agencies have overreacted to compensate for their role in the crisis which adds to the downward pressure. Governments are caught in a vicious cycle. They are being forced by markets to take short-term, reactive policy measures on an almost weekly basis. But it’s never enough for the markets. A good article worth reading. It provides many implications resulting from the recent down grade.  

From MSU Global Edge: U.S. Debt Downgraded: Does This Affect Your Business? This is the first time that the U.S. economy has been downgraded since it first received a credit rating in 1917. Only 15 other countries still hold the perfect triple-A rating.  More on the same story from CNN money.

From Euromonitor: The US Debt Crisis and Downgraded Credit Rating has Global Implications. US treasuries are no longer risk free assets. As the world’s largest economy, biggest importer of goods and the US dollar being the world’s reserve currency, the downgrade has far reaching implications for the global economy.  The most immediate impact of the US debt crisis has been a loss of investor confidence and liquidity of global financial markets.  As the world’s largest consumer of crude oil in 2010, the US downgrade had an immediate impact on crude oil prices. The US downgrade came at a time when the US economy was slowing and consumer confidence continues to be below pre-crisis levels of 2007. The US downgrade is likely to worsen the EU debt situation. A good article worth reading. It also provides many implications resulting from the recent down grade.  

From MSU Global Edge: The Euro of the Future: Because of the debt crisis in Europe, many countries were left unable to fulfill the convergence criteria to have the Euro as a currency, leading to many problems throughout Europe. It wasn’t just the current crisis that brought about these issues, they have been rooted in the Euro ever since it was created. So what exactly are a few of these issues and how can they be solved?

From Euromonitor: Recession: Shifting Consumer Responses. Euromonitor International explores the latest news within consumer themes including the newest thrift news, shifting consumer loyalty and downsizing and to what extent consumers are trading up or back to normal.

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