Markets dip, no massive losses

tiffiant

Markets dip, no massive losses
Canadian dollar loses 0.92 of a cent to 101.32
News1130 Staff Aug 08, 2011 07:43:40 AM
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VANCOUVER (NEWS1130) - Although there were losses, the bloodbath some investors were afraid would sweep Asian and European financial markets didn't happen.  The markets are down just slightly.

Central bankers from G7 countries, including the Bank of Canada, have agreed to work together to avert another downgrade to the United States' credit rating.

They agreed to work together to take whatever measures are needed for any and all circumstances that may develop this week.  The G7 said current market pressures threatening Spain and Italy didn't reflect the economic fundamentals in those two countries.

Federal Finance Minister Jim Flaherty says Canada is well-positioned to withstand the global headwinds with its strong banking system in place.

Meantime, the White House is pushing back against the Standard & Poor's downgrade of its credit rating.  US Treasury Secretary Timothy Geithner, who was on that emergency conference call, says the S & P's got their numbers wrong.  However, the agency's managing director tells CNN that not only was the downgrade warranted, but they may do it again.

"We have a negative outlook which sticks to a longer time-frame from six months to 24 months.  If the fiscal position of the United States deteriorates further then that could lead to a downgrade."

Officials at S & P's are downgrading the credit ratings of Fannie Mae and Freddie Mac and other agencies linked to the US debt.

The agency says it has also lowered the ratings for: farm lenders; long-term US government-backed debt issued by 32 banks and credit unions; and three major clearinghouses, which are used to execute trades of stocks, bonds and options.

tiffiant

Canadian Markets

The Toronto stock market tumbled a little when the markets opened this morning.  The TSX Composite was about 400 points in the red right off the bat.

The Canadian dollar dipped just slightly, losing 0.92 of a cent to 101.32 cents.

Local investors

So, do you run for the hills or just pace yourself?  One coffee shop owner figures the future of our savings will be the big story on his shop floor today.

"It's going to be a little hard to face today.  I deal with a lot of brokers, and business people and obviously they're not going to be very happy.  I think they can still afford to buy a good cup of coffee."

Not everyone is handling this morning's market instability with optimism.  "I don't even look at them.  I don't look at my pay right now.  I'll look at it when I decide where the bottom is and then it becomes a buying opportunity, but I think people are crazy if they try to sell right now," says one man.

Most investors on Howe Street have been through dramatic volatility before, and for the most part, the mood on the street is stoic.

News1130 will have updates with Richard Dettman in Money News at :26 and :56.

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