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- EU Economic Affairs Commissioner Olli Rehn said the EU is working
"night and day" to finalise details of a "milestone" plan to stem
contagion but "such a ... complex agreement requires time to implement"
as current problems have "global repercussions and ramifications".
- In Brussels, European Commission president Jose Manuel Barroso said it
was clear that we are no longer managing a crisis just in the euro-area
periphery" and talked of widespread doubts regarding "the systemic
capacity of the euro area to respond to the evolving crisis".
- Moneycorp analysts said Barroso’s comments "rattled the markets as
investors interpreted this as an admission that the plans to resolve the
European debt crisis are too complex and incomplete".
- Goldman Sachs economist Dirk Schumacher said the ECB "does not like
buying bonds as it does not want to fund governments -- but things are
different in a liquidity crisis where there is a risk of systemic
events."
- Jean Michel Six, Europe economist at Standard & Poor's, said that
the "only truly efficient fireman capable of leaving the firehouse at a
moment's notice is the European Central Bank", which he said had "played
its role admirably since the beginning of this crisis to calm the
markets".
- Citi Economics analyst Willem Buiter said that the ECB had to step
into the markets or accept the "biggest banking crisis since 1931."
Buiter said that the 440 billion euros promised for the European Union
emergency funds were "woefully inadequate" leaving "only the ECB as
lender of last resort ... for sovereigns".
- Michael Hewson said dissappointing data on both sides of the Atlantic
as well as a surging bond yields in Spain and Italy meant "pessimism
about the global recovery" was taking hold "with a vengeance".
- After Italian Prime Minister Berlusconi addressed parliament in order
to calm fears, Stefano Folli, a columnist at Il Sole 24 Ore, wrote that
the speech was over-ridden with "generic references" to "those eternal
reforms that are always evoked but never implemented."
- Italian trade unions said in a joint statement that "the situation is
grave" and that it "must be confronted with maximum determination and
without excuses or shortcuts."
- Financial markets are still not convinced that "politicians have a
strategy for dealing with Italy and Spain, said Will Hedden, trader at
IG Index.
- In London, the Centre for Economics and Business Research commented:
"Realistically, Italy is bound to default but Spain may just get away
without having to do so."
- Chinese state television criticised a last-minute agreement to raise
the US debt ceiling as "a political performance which has more pomp and
ceremony than substance" in a rare editorial broadcast on its evening
news bulletin.
- Russian Prime Minister Vladimir Putin accused the United States of
acting as a "parasite" on the world economy as it "is not living within
its means".
- Charles Robertson at Renaissance Capital said the US Federal Reserve
may have to act soon to face weak household demand in the US, but the
"real problem" is that "southern Europe might never grow strongly
again".
- Giles Watts, head of equities at City Index, said traders are growing
"increasingly concerned" about a sharp US slowdown just as the US
embarks on a sharp series of public spending cuts.
- Hugh Johnson of Hugh Johnson Advisors said markets were showing a loss
of confidence "in the economy, confidence in the market, confidence in
the policy makers. It's all showing up."
- At ING Rates Strategy and Research, Alessandro Giansanti said that
"the equity market starts to fall on average six months ahead of the
recession."
- If countries do not grow, their "debt becomes unsustainable", said
Chiara Corsa, an economist at Italian bank UniCredit. "This is a crucial
point and is the reason why Italy and Spain have become targets."
- "The bipartisan compromise on deficit reduction was an important step
in the right direction. Yet, the path to getting there took too long and
was at times too divisive," White House spokesman Jay Carney said.
- Washington needed to "come to terms with the painful fact that the
good old days when it could just borrow its way out of messes of its own
making are finally gone," Beijing said in a commentary carried by the
official Xinhua news agency.
- Investing guru Warren Buffett said his Omaha, Nebraska-based company
would hold onto its considerable trove of US Treasury bills. "In Omaha,
the US is still triple-A. In fact, if there were a quadruple-A rating,
I'd give the US that."
- Republican presidential candidate Tim Pawlenty said he would use the
ratings downgrade to portray Obama as hapless and presiding over
American shame and decline. "What we should be talking about is
downgrading Barack Obama from President of the United States."
"night and day" to finalise details of a "milestone" plan to stem
contagion but "such a ... complex agreement requires time to implement"
as current problems have "global repercussions and ramifications".
- In Brussels, European Commission president Jose Manuel Barroso said it
was clear that we are no longer managing a crisis just in the euro-area
periphery" and talked of widespread doubts regarding "the systemic
capacity of the euro area to respond to the evolving crisis".
- Moneycorp analysts said Barroso’s comments "rattled the markets as
investors interpreted this as an admission that the plans to resolve the
European debt crisis are too complex and incomplete".
- Goldman Sachs economist Dirk Schumacher said the ECB "does not like
buying bonds as it does not want to fund governments -- but things are
different in a liquidity crisis where there is a risk of systemic
events."
- Jean Michel Six, Europe economist at Standard & Poor's, said that
the "only truly efficient fireman capable of leaving the firehouse at a
moment's notice is the European Central Bank", which he said had "played
its role admirably since the beginning of this crisis to calm the
markets".
- Citi Economics analyst Willem Buiter said that the ECB had to step
into the markets or accept the "biggest banking crisis since 1931."
Buiter said that the 440 billion euros promised for the European Union
emergency funds were "woefully inadequate" leaving "only the ECB as
lender of last resort ... for sovereigns".
- Michael Hewson said dissappointing data on both sides of the Atlantic
as well as a surging bond yields in Spain and Italy meant "pessimism
about the global recovery" was taking hold "with a vengeance".
- After Italian Prime Minister Berlusconi addressed parliament in order
to calm fears, Stefano Folli, a columnist at Il Sole 24 Ore, wrote that
the speech was over-ridden with "generic references" to "those eternal
reforms that are always evoked but never implemented."
- Italian trade unions said in a joint statement that "the situation is
grave" and that it "must be confronted with maximum determination and
without excuses or shortcuts."
- Financial markets are still not convinced that "politicians have a
strategy for dealing with Italy and Spain, said Will Hedden, trader at
IG Index.
- In London, the Centre for Economics and Business Research commented:
"Realistically, Italy is bound to default but Spain may just get away
without having to do so."
- Chinese state television criticised a last-minute agreement to raise
the US debt ceiling as "a political performance which has more pomp and
ceremony than substance" in a rare editorial broadcast on its evening
news bulletin.
- Russian Prime Minister Vladimir Putin accused the United States of
acting as a "parasite" on the world economy as it "is not living within
its means".
- Charles Robertson at Renaissance Capital said the US Federal Reserve
may have to act soon to face weak household demand in the US, but the
"real problem" is that "southern Europe might never grow strongly
again".
- Giles Watts, head of equities at City Index, said traders are growing
"increasingly concerned" about a sharp US slowdown just as the US
embarks on a sharp series of public spending cuts.
- Hugh Johnson of Hugh Johnson Advisors said markets were showing a loss
of confidence "in the economy, confidence in the market, confidence in
the policy makers. It's all showing up."
- At ING Rates Strategy and Research, Alessandro Giansanti said that
"the equity market starts to fall on average six months ahead of the
recession."
- If countries do not grow, their "debt becomes unsustainable", said
Chiara Corsa, an economist at Italian bank UniCredit. "This is a crucial
point and is the reason why Italy and Spain have become targets."
- "The bipartisan compromise on deficit reduction was an important step
in the right direction. Yet, the path to getting there took too long and
was at times too divisive," White House spokesman Jay Carney said.
- Washington needed to "come to terms with the painful fact that the
good old days when it could just borrow its way out of messes of its own
making are finally gone," Beijing said in a commentary carried by the
official Xinhua news agency.
- Investing guru Warren Buffett said his Omaha, Nebraska-based company
would hold onto its considerable trove of US Treasury bills. "In Omaha,
the US is still triple-A. In fact, if there were a quadruple-A rating,
I'd give the US that."
- Republican presidential candidate Tim Pawlenty said he would use the
ratings downgrade to portray Obama as hapless and presiding over
American shame and decline. "What we should be talking about is
downgrading Barack Obama from President of the United States."
