U.S. Stock Market Plummets
The Standard & Poor's 500 Index dropped by nearly 80 points, and NASDAQ and NYSE stocks all plummeted with last minute sales approaching 95%, according to Forbes.
Most experts believe the drastic plunge is at least in part a reaction to S & P's announcement Friday that it would downgrade the United States' credit rating for the first time in history.
However, some say the drop is not just a knee-jerk reaction to U.S. credit status, rather it's indicative of a much larger problem: a global lack of faith in America's troubled economy.
Investors scrambled for gold and treasury bonds, both assets considered "safe" investments in a fragile market, the L.A. Times reported.
The debt ceiling crisis that dominated U.S. economic and political news for weeks may have served as a distraction from the larger issue--how the fragile economy in the states impacts in the rest of the world.
S & P said Monday that in addition to the States' credit rating, it would downgrade the debt of mortgage brokers Fannie Mae and Freddie Mac, implying that America's financial woes are far from over.
With Europe struggling to manage its own debt crisis, a collapse in the U.S., a country historically viewed worldwide as a financial stronghold, could be a signal of further weakening still to come.
But President Barack Obama, addressing the subject from the White House Monday, insisted that the financial and credit problems in the U.S. remain surmountable.
"There will always be economic factors we can't control...but how we respond to those tests, that's entirely up to us," he said.
Obama said tax reform, creation of jobs, and massive makeovers of government programs will all be necessary to aid America's economy, thus preventing a true global financial meltdown.
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