Pressure in Greece, Leads to Pressure at Home

8 05 2010

Wow, the last week has been full of newsworthy situations… the Greece Bailout, and the protests along with it. The elections in the U.K. The financial reform sessions in the Senate. And as a result, the 1,000 point drop in the Dow on Thursday. This dramatic drop can is being viewed as a wake up call for further potential drops based on U.S. debts.

What is unfolding now in the E.U. regarding the burdened economies in Greece, Portugal, Italy, Ireland and Spain will likely have an effect on U.S exports to those countries in the upcoming months. Is there room to lose even a penny on an economy that is still in recovery itself? Traders may feel that the U.S will not be able to pay up in the event of further unfavorable economic conditions.

It is good to consider that the U.S. is at potential risk when it comes to European exposure, but it does not guarantee that something negative will actually happen. Especially if the U.S. is able to stabilize and minimize the debt in the budget.

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