The bad week turned into a worse weekend for the world economy’s financial standings, and Monday doesn’t look much better.
A roller coaster ride for markets last week turned out to be the worst five days—for the Dow Jones Industrial Average, at least—since October of 2008, according to the Wall Street Journal.
Over the weekend, New York City Police made scores of arrests, some of them seemingly violent enough to surely raise further ire, amid the hundreds of people taking part in the “Occupy Wall Street” protests, while in Washington euro zone leaders huddled to find a rescue plan for banks.
The WSJ today says that fears of Greece’s ability to repay debt and the implications of default for the euro are combining with worries the United States may be sliding—for real this time—into a double dip recession. Neither story bodes well for Monday’s markets.
Reported fears of bank runs in Europe have also put extra pressure on the weekend’s meetings of the World Bank and I.M.F., according to the New York Times.
“Something will need to be done to safeguard the European banks, especially if Greece is about to default,” Stephen L. Jen, a former I.M.F. economist told the Times.
But as feelings about banks in Europe continue to simmer and context like the UBS rogue trader continues to put lawmakers and financial institutions at odds, the conversation about a solution to the debt crisis there has a tenor of shared sacrifice. German Finance Minister Wolfgang Schauble said over the weekend that banks that had made bad financial decisions needed to share the burden of avoiding further problems.
“Without a substantial contribution from financial institutions,” Schauble said, according to the Times, “the legitimacy of our Westernized capitalized systems will suffer.”