President Obama’s latest stimulus plan involved some big numbers but it did little to lift the mood of investors.
Instead, investor attention shifted to Europe where a WSJ report said “stress tests”, published more than a month ago, underestimated some lenders’ holdings of potentially risky government debt.
Concern over the European banking sector was further aggravated by Germany’s banking association saying the country’s 10 biggest banks may need 105 billion euros of additional capital under Basel III.
In a light week for macroeconomic data it seems bad news overseas is translating into investors taking their money off the table at home.
More gloom comes from Nouriel Roubini, a professor at New York University. At the annual Ambrosetti conference on Lake Como he said the U.S. has run out of bullets in its arsenal to fight off a recession, writes the Telegraph.