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5 Aug/11

Global Market Spiral

The U.S. and Europe are each playing off the vicious downfall of global markets. On Thursday, American markets closed more than 500 points down, lending to a new low not seen in years. The Dow has lost all of its gains this year and financial analysts around the world are are in full-on panic. Meanwhile, close to £50bn was lost on Britain's biggest companies. Concerns are still high regarding Italy's ongoing crisis and coupled with hard-hit banks throughout the UK, the fears regarding the hastily-drawn solution to the U.S. debt dilemmas and the unexpected drop in oil prices, it's little wonder international markets are in major corrections.

Also on Thursday, Jose Manuel Barroso, president of the European Commission, added his own twist that continued to worry investors. His efforts to confront (some say "bully") other European leaders regarding their own debt crises only made a bad situation worse.

Still, in yet one more fear, the potential for the U.S. to lose its AAA credit rating still exists. Some are speculating the Dow could plummet yet once again on Friday and lost at least another 100 points, something the country doesn't need. Much will be determined by the employment numbers, expected to be released on Friday. Lay-offs are still hitting record highs as Wednesday saw a new report suggesting there are still hundreds of thousands of jobs being lost each month, even as new hiring trends are up. The variations seem to come from the way "new jobs" are classified and could include those temporary positions.

So does this mean the trigger of a double dip recession in the United States? Some, including many accountancy professionals throughout the UK, are forecasting just that as others insist the nation is still in its first recession. Regardless of what Friday delivers, it's clear President Obama has a collective set of international eyes on him. Approval ratings are at an all time low as the president celebrated his birthday on Thursday and was "partying and traveling", even as the stock market plummeted.

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