Saturday, June 5, 2010

Double-dip likely for stock market says 40-year veteran

Down day on Wall Street

Start issuing DOW helmets says Art Cashin, director of floor operations at UBS Financial Services. Cashin (what an appropriate last name) with 43 years on the NYSE floor is always ready for prime CNBC time. His turn of a phrase can make the grumpiest floor trader wince.

Friday as volatility picked up in the closing hour of trading the DOW plummeted over 100 points to close at 9932. The DOW was unable to hold above 10,000.

FUD (Fear Uncertainty and Doubt) was brought on by a lack-luster job report. Most of the 431,000 jobs created in May were attributed to government census takers. Less than 40,000 were added by private industry.

On top of that Hungary’s debt troubles added yet another European country to the list of struggling countries. It started with Greece and spread to Spain and Portugal. The fear is a domino effect as one bank owns assets in another country’s bank.

This scenario was played out last year in the U.S. as the housing bubble burst (and still struggling) leaving banks with foreclosed properties and diminished asset values. These mortgages were held by foreign banks in Europe and in some cases met with their demise.

Posted By Valerie Garner

Categories: Business, Finance



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