Global Debt Crisis Hits Markets, The Moment of Truth is Upon Us

Stock-Markets / Financial Markets 2010
May 02, 2010 - 04:26 AM

By: Steve_Betts

We started out the week with a bang when it was announced that Goldman Sachs was being charged with fraud by the SEC. This sounds ominous at first glance, but in the end it’s a civil matter and will result with no more than a fine and a slap on the wrist. Then toward the middle of the week when the ratings agencies began to write down sovereign debt, first with Greece and then a day later with Spain and Portugal. It seems to me that these agencies no longer serve a purpose as these downgrades are nothing more than an acknowledgement of a situation that we all know existed for quite some time.

These countries didn’t fall deep into debt overnight; rather it’s a process that began years ago. The idea of the ratings agencies is supposedly to give the general public a “heads upâ€