Title:
Debt, Recession Worries Bring Volatility to World
Markets
Description: This is
a VOA Special English Economics Report.
See text below
Text:
A "rollercoaster ride" is one description for the
days of historic ups and downs in stock markets
recently. If you want to use a more technical term,
the markets have experienced volatility -- in a big
way. Major measures of United States markets closed
with their biggest one-day losses since the
financial crisis of two thousand eight. Asia and
Europe also had sharp declines.Volatile markets can
react suddenly in wild and unpredictable ways.
Usually some kind of shock, or more than one, is
involved. For example, on August fifth, one of the
three major credit rating agencies downgraded
long-term United States government debt. Standard &
Poor's lowered its opinion of Treasury securities
one step from the highest rating, triple-A, to
AA-plus. But shocks like a hopeful jobs report or
good earnings results can stop a fall and send
prices higher. Also, when prices fall, investors may
find good deals and start buying. The United States
held S&P's top rating for seventy years and never
had a downgrade. But many investors were expecting
that to happen even after the budget deal in
Washington. In early August Congress agreed to
increase the government's borrowing limit in return
for steps to cut spending and reduce the deficit.
S&P says it thinks America's debt will only increase
in the future. President Obama disagreed, saying:
"The fact is, we didn't need a rating agency to tell
us that we need a balanced, long-term approach to
deficit reduction." He said markets still consider
United States credit "as among the world's
safest."Still, there have been growing worries of
another recession -- a double dip. On August ninth,
policy makers at the central bank said economic
growth so far this year has been "considerably
slower" than they had expected. The Federal Reserve
said it would likely keep short-term interest rates
near zero for at least two more years.Borrowing
costs for the United States remain very low. But
debt worries in two of Europe's biggest economies
have increased costs for their governments in recent
weeks. On August eighth, the European Central Bank
began buying debt securities from Spain and Italy.
These efforts helped push down interest rates for
those countries. But Europe must still deal with the
rescues of Greece, Ireland and Portugal. For VOA
Special English, I'm Carolyn Presutti. For more
business news and to learn American English, go to
voaspecialenglish.com.
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Hi. I
personally reviewed this video and found it appropriate for
the news section of English Global Group. This
is a Voice of America video which covers an interesting
topic in Special English. I would appreciate some feedback from both
students and teachers about this video. You can comment in
the window below using any of a number of different services
including Facebook, Yahoo, AOL, and Hotmail.
