Financial markets in the U.S. and Europe extended their losses Thursday after Morgan Stanley put out a report saying that the U.S. and euro zone economies are “dangerously close to a recession.”
The Dow Jones Industrial Average (DJIA) opened sharply lower and continued sliding in early morning trading, falling 355.37 points, or 3.1%, to 11,054.84 as of 8:49am ET.
Risk aversion surged, as the CBOE Volatility Index (VIX) climbed 18.0% to 37.26.
The U.S.-based investment bank reduced its global gross domestic product (GDP) growth forecast to 3.9% from 4.2% for 2011, and to 3.8% from 4.5% for 2012.
Joachim Fels, co-head of Morgan Stanley’s global economics team, wrote in the firm’s report that ”Our revised forecasts show the US and the euro area hovering dangerously close to a recession — defined as two consecutive quarters of contraction — over the next 6-12 months.”
Although Fels noted that a recession is not the firm’s base case scenario, “it won’t take much in the form of additional shocks to tip the balance…A negative feedback loop between weak growth and soggy asset markets now appears to be in the making in Europe and the US.”
The full report from Morgan Stanley is available at Zero Hedge
Fortuna Silver’s Cash Flow Surges 75%
- Operating income of $10.7 million, compared to $9.6 million in Q2 2010.
- Silver production of 474,979 ounces, up 1% over Q2 2010.
- Cash cost per silver ounce, net of by-product credits, was negative $4.42.
