More Selling - But Why??

The US markets are set to open lower by 1.2% to begin the holiday-shortened week. We can turn to Europe as the usual suspect, but there are other factors putting pressure on stocks.

Europe - Moody's warns France could be downgraded due to rising interest rates and other factors. This is very much a self-fulfilling prophecy in my mind. As the fear rises, investors sell bonds and interest rates rise. As interest rates rise the fear increases because the high rates could lead to a potential default. When does the wheel stop is the question??

Asia - A Chinese politician warned of a "chronic" global recession in the future and suggests the country focus on their own growth and not rely on the US. This may be a bit far-fetched, but in combination with the other negative news it is enough to create new sellers.

North America - And finally the good ole US and the "less than-Super Committee". If a large group of politicians could not agree on a deal to cut the deficit, why would a smaller sample of the same group succeed? Exactly, the political situation is borderline laughable and that leads investors to sell stocks now and reevaluate the situation.