The fear of a regionwide fallout from a Greek default, an upcoming referendum in Ireland over whether it will accept the terms of a bailout, and a believe that the financial crisis could spread to Portugal and Spain, all sent the markets into tail spins.
The French CAC 40 was down more than 2%, not much of a vote of confidence in the plans of President Hollande. The Germany Dax was down over 2% as Angela Merkel’s party was defeated in a key regional election and the most powerful nation in the region, economically, has been repeated called upon to relent on the severity of austerity pressed upon its neighbors.
The FTSE 100 fell 1.6%. Austerity measures are only partially in place. Many economist believe that once they are in full force, the economy, already in recession, will move toward a vicious double dip.
All of this news has weighed on U.S. futures and American equities are likely to sell of sharply at the open.
Douglas A. McIntyre