World stock markets fell precipitously on Monday, with US indices registering their sharpest declines since December 2008. The panic in financial markets occurs amidst growing signs of a new economic downturn in the US and internationally, a worsening of the European debt crisis, and the destabilizing impact of Friday’s downgrade of US government debt.
The sell-off puts to rest any claim that the crisis that erupted in 2008 was temporary. All of the measures taken by governments and international organizations, led by the Obama administration in the US, in response to the 2008 financial meltdown have completely failed to address its underlying causes. The handing out of trillions of dollars to the banks to guarantee the bad debts of the financial oligarchs succeeded only in inflating a new speculative bubble.
The collapse of share values in the US wiped out some $1 trillion in assets in just one day. The Dow Jones Industrial Average fell 634 points, or 5.6 percent. The S&P 500 fell 6.6 percent and the NASDAQ composite plunged 6.9 percent. The S&P 500 index has fallen 16.8 percent since July 22. All major stock indexes closed near their lows for the day, portending further falls today.