The reason that the malaise has gone from the US markets to the European markets can be summed up in one chart. The writer of the Financial Times article I'm linking calls this "The most important chart in the world" and may be right:
So the fact that the US is not borrowing money, which means not issuing Treasury Bonds, combined with the fact that there is also no ECB debt to invest in, means that there's lots of money out there that can't be invested. (The US Treasury Bond situation is much simpler than the European one, and would make a bigger difference, but the essence is the same).
And that's why governments are borrowers of last resort. The US government isn't going anywhere. We could easily issue more debt, and not only would we fix our economy but the rest of the world would breathe a sigh of relief. We could fix our infrastructure at bargain-basement borrowing rates, and help the economic crisis overseas, and fix our own economy at the same time.
But the Republicans are in control of the House of Representatives, and they don't want to fix the economy. They want to get the scary black guy out of the White House and punish the evil people for voting for him. And that's reality.
Read all about it.
Everyone is entitled to his own opinion, but not his own facts. -Daniel Patrick Moynihan
The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. -Thomas Jefferson
