The world's financial markets have given a vote of no confidence in the ability of political leaders on both sides of the Atlantic to rise to the fiscal challenges facing them.
As a result they fear that at best the major economies will pause in their growth and at worst they may slither back into recession.
Markets are always incoherent in their response to events and no more so than now.
But two things are telling. One is the fall in US share prices despite the outline deal in Congress on increasing the debt limit and cutting federal spending. The US economy has been staging a slow recovery but it is still not back to its previous peak. Unless it can grow faster, unemployment will stay close to 10 per cent and consumers will remain fearful.
The other thing is the sharp rise in interest rates on Italian and Spanish debt, to more than 6 per cent. The second Greek bail-out was supposed to stop European sovereign debt fears from spreading to larger economies.
The situation may be retrieved but the markets seem to think Italy and Spain may need bail-outs too. Were that to happen the bill could be immense – threatening the eurozone itself.Reuse content