Financial markets: "this time it's serious"

The Wall Street Journal Europe headlines: “Two terrible weeks” and has a photo of European Central Bank President Jean-Claude Trichet staring glumly at plunging stock indexes in the UK, US and Italy. They show sharp declines, nine percent or more since July 25th. A comment piece in the Sydney Morning Herald warns: “This time it’s serious”. “If you thought it was rough three years ago, that was just a dress rehearsal,” says business writer Ian Verrender. “It finally dawned on traders that there is almost no way to avoid economic calamity,” he says.

The Guardian International leads “World markets in turmoil” and has an editorial entitled: “State of Emergency”, which says “the conventional wisdom is that August is a sleepy month with politicians, policymakers and investors all at the beach”, but that conventional wisdom is “wrong”. The paper reminds readers that the credit crunch kicked off four years ago, on August 9th 2007.

One consequence of the turmoil is a surging gold price. The London online paper London 24 has a story entitled: “Gold price spike puts London women in danger of crime”. It reports thefts of jewellery have jumped in recent months in the British capital. Police are warning that women wearing gold in the British capital are at “extra risk”.

And can America handle it? After the 11th-hour brinkmanship on the US debt crisis just last weekend, there’s no respite. The USA Today International edition has a cartoon showing President Barack Obama with the debt deal in his hand, as he falls off the edge of cliff labelled “jobs”, “credit rating” and “recession”. A cartoon in The International Herald Tribune/New York Times shows a couple saying: “So we got the debt ceiling fixed” as they stand in front of a federal government building which does indeed have a ceiling and a roof but no walls. The ceiling is propped by a pile of chairs one of top of the other, labelled “bond rating”.

Italy is on the front line of the turmoil. Il Giornale headlines “Euro in coma” (“Euro in a coma”). The paper is owned by Silvio Berlusconi’s brother Paolo and the message is that the turmoil is due to speculators and “the credibility of the Berlusconi government doesn’t enter into it”. Ireland, too, is vulnerable. The Irish Times headlines: “Market rout as Berlin rejects call for more EU action”. On the inside pages, comment writer Miriam Lord takes a tongue-in-cheek look at the impact of austerity and recession in Ireland with a visit to the Dublin Horse Show. Her headline is: “Flagellation and sock tax on budget agenda as recession fashion proves winner”. Public Expenditure Minister Brendan Howlin was among the judges for the best-dressed lady competition. He chose a dress made of leather and studding. The columnist tells him that with all the spending cuts and his choice of best-dressed lady you are: “Minister for Bondage”. He laughs back saying it is not bondage, “it’s flagellation”. Lord says another judge for the best dress competition interviewed contestants without his socks on. The columnist wonders whether there could even be a tax on men’s socks given the current state of things. And the actual winner of the Dublin Horse Show’s best-dressed lady was...Yvette Byrne from Carlow, who wore a dress designed herself - using Paris lace and curtain material - to become a symbol of recession fashion.