World Business
El-Erian: Europe crisis may spread
By Sree Vidya Bhaktavatsalam (China Daily)
Updated: 2010-05-08 11:11
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BOSTON, Massachusetts - Pacific Investment Management Co's Mohamed El-Erian and Loomis Sayles & Co's Dan Fuss said the Europe's debt crisis may spread across the globe because of investor concern that governments have borrowed too much to revive their economies.
"After morphing into a regional dislocation, the Greek crisis is now going global," said El-Erian, the chief executive officer of Newport Beach, California-based Pimco. El-Erian shares the title of co-chief investment officer of Pimco with Bill Gross, who runs the world's biggest bond fund.
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Mohamed El-Erian, chief executive oi cer of Pacifi c Investment Management Co. [JOSHUA ROBERTS / BLOOMBERG] |
US stock markets plunged by the most in a year on Thursday on concerns that the debt troubles in Europe will bring the global economic recovery to a halt. The Dow average slumped as much as 9.2 percent during the day before paring losses. European Central Bank President Jean-Claude Trichet resisted pressure to take steps to fight the spreading crisis, and said the bank didn't discuss buying government debt when policy makers met on Thursday.
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Fuss, whose Loomis Sayles Bond Fund beat 96 percent of competitors in the past year, said the euro crisis had reached a "critical" point.
"It's a liquidity issue, so it's not just over there, it's over here," Fuss said in an interview.
The Dow Jones Industrial Average lost as much as 998.5 points before paring its drop to 347.80 points in New York. The Standard & Poor's 500 Index fell 3.2 percent to 1128.15. The declines for both gauges were the most since April 20, 2009.
