Worldwide Market Failures

And the fear continues, this time spreading across the world. Both the European and Asian markets experienced falls this weekend, causing stress for economists worldwide. "Japan's Nikkei 225 index fell 1.2%, Australia's S&P/ASX 200 shed 1.3% and South Korea's Kospi lost 0.3%." In addition to the Asian market drops, "Frankfurt's Dax index ended the day 5.3% lower, with the Paris Cac 40 4.7% lower and the FTSE 100 down 3.6%, posting its second-biggest fall this year."

While economists believe that the markets will continue to be volatile, they have seen a rise in the prices of gold and other safer assets like Japanese bonds. Even with these gains, the mounting fear of a global economic slowdown has increased as well as the "impact of US and European government austerity measures." In addition to the worldwide economic anxiety, analysts are also concerned that the European debts will overwhelm Italy's market, which is "one of the region's biggest and most interlinked economies."

In a way, this is the TRIBE of macroeconomics. The economies are all complimentary and therefore because one dropped, the rest are all dropping as well. In addition, the income of the citizens is decreasing (due to the austerity measures) and therefore the people aren't spending nearly as much. Finally the expectations of the people for the future safety of the markets has greatly decreased. People across the globe are worried about their money and the economies.

I think the best thing people can do is have a little faith in the economies. A little faith goes a long way (and our economies definitely have a long way to go).