European debt fears rattle markets

Amy Scott Feb 5, 2010
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European debt fears rattle markets

Amy Scott Feb 5, 2010
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TEXT OF INTERVIEW

Bill Radke: Stock markets around the world are continuing to fall today as investors worry that a debt crisis in Greece may spread to other European countries. Marketplace’s Amy Scott joins us live from New York — good morning.

Amy Scott: Good morning.

Radke: So first of all, Amy, will you bring us up to date on what’s happening in Europe?

Scott: Yeah, Greece has been struggling with a huge budget deficit. And now there are worries that countries like Spain and Portugal and perhaps Ireland will have trouble financing their deficits as well.
Analysts say that’s led to a global sell-off in stocks and commodities, like oil and even gold, and investors are taking shelter in the dollar.

Radke: So Amy, all of this is happening an ocean away. Why are U.S. markets reacting so strongly?

Scott: Well I asked David Morrison, who follows the markets at GFT in London. And he says, you know, all of the world’s major economies, including the U.S., have racked up deficits to try and pull out of this recession, and now there’s a lot of concern about how we’re going to pay for it. So investors see what’s happening in Europe and worry that the economy crisis isn’t over.

David Morrison: You know it’s not just the eurozone that’s going to have problems. I mean here in the U.K. as well, we have got huge issues with our budget deficits. And I think that no doubt in the U.S. you’re looking at these and saying “well, you know, we’ve got similar issues.”

Of course, U.S. invesotrs have their own worries right now — the weekly jobsless claims news yesterday helped send the Dow down, and there is some concern that the January unemployment report coming out later today won’t be great news.

Radke: Marketplace’s Amy Scott. Thank you, Amy.

Scott: Thank you.

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