After a spectacular 100% rise from 2008 levels, the markets moved into a bubble territory. The Greece debt downgrading to junk status might be the needle that would prick the bubble.
For an ordinary man on the street, its a disaster. For the newscasters, its breaking news. For a long term investor, its a good time to buy some great stocks at fabulous prices.
The junk rating, unusual for a developed nation, deepened fears that big fiscal deficits and debt burdens elsewhere could threaten the economic recovery in Europe. Stock markets on both sides of the Atlantic tumbled about 2 percent or more after the downgrade by Standard & Poor’s.
The downgrade fanned investors’ doubts that the proposed economic reforms in Greece will go far enough to prevent the country from spiraling into even deeper trouble. It also presented a new obstacle to the planned $60 billion bailout from European governments and the International Monetary Fund.
Full news here
As i write, the BSE Sensex is more than 250 points down from yesterday’s close. Portugal also has been downgraded. With Ireland, Italy, Spain also in the line, there seems to be long dark days ahead.
Hope the Sensex collapses some more over the next few weeks to settle around 15-16k. So that i can do some bargain hunting 😀
Above picture source: Tribune