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Spectre of Greek default continues to stifle world markets


Spectre of Greek default continues to stifle world markets


New York markets felt the force of the speculation that Germany is preparing for a Greek default.

Morgan Stanley, the Goldman Sachs Group and JP Morgan Chase and Co. slumped at least one point three per cent following losses in European banks. Meanwhile Citigroup Inc. slashed its third quarter profit estimates for the US lenders.

Companies like Caterpillar, the world largest construction and mininng-equipment maker, lost over two per cent.

“There is troubling news in Europe with anxiety among investors,” is how one investment banker summed it up.

In Europe, shares in Société Generale, BNP Paribas and Credit Agricole slumped by more than 10 per cent. There are expectations of an imminent downgrade by ratings agency Moody due to their exposure to Greek debt.

The storm forced Société Generale – the hardest hit lender in recent weeks – to announce further drastic measures which include speeding up asset disposals and more cost cuts. Their shares were trading at an historic low.

The euro suffered a seismic blow as well hitting a 10-year-low against the yen and a 7-month-low against the dollar.

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