The stock-market precipitous drop today is mostly a reaction to the deficit cuts

[Cal33]

insisted on mostly by the Teabaggers. Everybody loses -- including the
Corporatists and Neocons. If this keeps up, could this be the beginning
of a split between the Teabaggers and the other Republican groups?
Teabaggers seem to be too crazy, even for the Republicans.

[DevonRex]

1. We were the last country giving stimulus to the economy. So, yes

that is definitely part of it. But you have to combine it with Italy and Spain tanking and the ECT doing nothing to stop the bleeding. Germany can't do it all.

[Cal33]

5. Yes. When it comes to the possibility of financial loss, the general reaction

often becomes one of "everybody for himself." And this is the attitude of what
corporatism is mostly built on.

[B Calm]

2. You hit it right out of the park. This is exactly what happened today! K&R

[The Velveteen Ocelot]

3. Part of it also has to do with problems in Europe and Japan.

There is a global slowdown going on. We just added a bunch to it.

[Cal33]

7. Yes. We sure did.

[pscot]

8. Europe may be heading for another bank meltdown

That's enough all by itself to rattle the markets.

[Recursion]

4. I disagree. I think outside of the blogosphere nobody believes the "cuts" are real

Discretionary spending cuts against future Congresses have been tried for decades and never happen; there's absolutely nothing binding about them, unlike cuts to mandatory spending (which is why there are very few cuts to mandatory spending in the deal). The trigger mechanism is front-loaded, yes, but that's discretionary too and can (and probably will) easily be cancelled out. Actually my big concern with the debt deal is that it's done basically nothing to, you know, actually reduce the deficit, except for implicitly assuming the expiration of the Bush tax cuts (which is actually a pretty big victory for us).

[Cal33]

12. I agree with you that the debt deal won't do much to reduce the deficit,

but the Bush tax cuts won't come to an end for another year
and a half, that is, if Obama wins in November next year.
If a Repub. should win, you can be sure the Bush tax cuts
will continue.

[truedelphi]

16. How is an implicit assumption

That you mention in your last sentence, going to be a victory?

What makes you so cock sure that in 2013 we will have a Democrat in the WHite House.

People who wish to return for a second term do not anger their base.

Nor do they destroy the entire platformt upon which their party has existed for decades, in just a few short months.

Nor do they have economic advisers going on record to tell us that this major dismantling is what has been planned from the get go. (Google "Larry Summers" + Social Security + reform + feb 2009)

[muriel_volestrangler]

6. They didn't happen today or last night; what did happend today was EU head Barroso

saying "Euro crisis - Barroso warns debt crisis is spreading"

European Commission President Jose Manuel Barroso has warned that the sovereign debt crisis is spreading beyond the periphery of the eurozone.

In a letter to European governments, he called on them to give their "full backing" to the euro currency zone.

He also said governments should rapidly re-assess the European Financial Stability Fund (EFSF) to reduce the risk of contagion in the eurozone.

His comments further rattled the markets, which closed sharply lower.

The main London and Frankfurt indexes closed 3.4% lower, while the Cac 40 in Paris ended down 3.9%. The Dow, the main US market, was down 3%.

And in the US, the unemployment figures still look bad:

New claims for unemployment benefits in the United States edged only marginally lower last week, indicating the economy continues to stall. Applications for jobless benefits decreased by 1,000 in the week ended July 30 to a seasonally adjusted 400,000, which shows that the economy is shedding about as many jobs as it is adding, according to economists. Although the figure was better than the expected increase of 7,000 new claims, the economy has failed to show net job growth since early April.

http://news.morningstar.com/articlenet/article.aspx?id=390395

[msongs]

9. Umm Obama and the dems went along with it with gusto. lots of blame for all nt

[Dappleganger]

10. Italy and Japan.

[thewiseguy]

11. Sorry, but that is just bullshit. It is the global economy that is tanking...

and driving the stock market down.

[Cal33]

13. And we are the biggest part of that global economy.

[taught_me_patience]

14. It's the realization there will be no stimulus

just when we need it because the economy is slowing.

[gristy]

15. If anything, it was due to the planned spending cuts, not the deficit cuts

If they had cut the deficit by increasing revenue with taxes on the rich, the market likely would have gone up.

[Swede]

17. Italy,the world's 8th largest economy may default.

Spain,the world's 11 largest economy may default. Not good.