Fears global economy could be on shaky ground
France loses AAA credit rating
- Duration 4:56
- Date Jan 13, 2012
France loses AAA credit rating
Also in this playlist...
This transcript is automatically generated
-- -- -- -- things really are getting scary big -- already facing big problems and down now we could be minutes away.
From European countries facing even bigger problems.
Their credit ratings could be on the verge of getting its -- and I'm not just talking wandered -- may be a bonds and for president facing a tough election.
May be update bunch of trouble as well.
Welcome everybody I'm Neil Cavuto and man -- man stocks hit as Europe takes yet another hit.
France set to lose its -- AAA credit rating.
And it could happen in minutes the ratings agency Standard and -- reportedly ready to lower the boom and lower that country's rating by not in response.
French president Nicholas Sarkozy holding crisis talks today.
Which is key ministers reports also about -- -- may lose its triple A rating while Italy Spain.
Could -- their ratings drop by at least two notches and by the way it could boomerang back to us.
And we can go down a notch as well all this as banks in this country continue to face.
JPMorgan seeing its profits plummet 23%.
In the latest quarter Europe's problems being blamed -- keep in mind.
A lot of banks here -- big time to what's going on over there.
Including Bank of America now warning things are getting so tough.
That it's ready to retreat from some.
US market so.
If the president is banking not a strong US economy to win four more years.
Economic forecasts -- harried dad says well it's not looking too good -- to Harry's -- as he's been eerily prescient if not depressing on a lot of this stuff.
He did say a lot of this stuff would fall and fast.
This year -- com.
It's all coming into play here what what -- -- We are great you know Europe we've been saying this European debt prices is gonna come back -- -- keep coming back.
You know temporary band -- aren't gonna work a bond markets pull the plugs.
A good while ago about Germany as saying look you have to have austerity for us to support she would bailout unlike what the United States is doing.
Within its banks and -- problems so that means Europe is just gonna continue to move into recession mean.
Large parts of Europe to order -- -- recession the UK is now.
And in France and it's -- and people -- realized.
They're looking at the government debt the biggest private debt problems are in the UK Ireland.
Places -- -- Portugal and Spain so when Europe goes into recession it's gonna be more than just the public debt problems.
It's gonna spill over in the -- well right when baby boomers are set to go from there -- -- plateau one.
Within the last several years into their declined stages as their kids -- totally meth meth and and and guess what the Fed is caught not.
Stimulating the QE3 because the economy has been better from QE2 so I think there's a big gap here and I think Europe slows down and we slowdown it hits China and in the whole world in trouble.
Or you're a genius are just to help people who don't really get immersed in this stuff to the degree -- you do QE2 Q3 -- if you wanna call it refers to quantitative easing when the Federal Reserve.
Comes in a market buys a treasury notes and bonds and that sort of stuff that.
To keep rates very low and that's been doing the -- obviously but you say you can only go to the well so many times that.
What -- number one and number two this only works temporarily at the demographic trends are negative especially from 2012 on.
We have 42 trillion private debt that dwarfs our government debt so.
This debt wants to.
2008 baby boomers now wanna save and pay down debt -- certainly don't want to buy.
-- is -- the government stimulus only works for about.
Eight to twelve months and then economy slumps back over so QE1 did well in the late you have not in an economy slumps.
What happens analyze it yet you what are chatting about this on Fox Business with that you as you know aren't you don't get used to demand a public when you are talking about this -- -- saying.
You know Neil this is not a a a a long term -- did the did the bubbling -- this is happening.
Like now -- so we could be an issue for the president you're saying before.
The upcoming election.
Yes I mean normally you would not get a major downturn or stock crash.
In an election year 1980 was about the only time that's happened but again Fed's been in the government's been stimulating for three years now they're running out of bullets and now Europe.
It's falling apart chest when we don't need him to -- again we've been waiting for the Fed to get trapped because this is an artificial recovery.
And they're only adding more debt to debt which is not the solution so we've been waiting for the Fed becoming get trapped -- trapped because they haven't come up with QE3.
QE -- gonna Wear off.
Just when Europe -- us and I think the economy melts down before the government can react fast enough.
Well have a wonderful weekend -- -- you very much our dad.
I -- this provided you just joined us here.