Stocks Collapse Due to Draghi, Not Obama: Mohamed El-Erian

By on November 7, 2012

Stock futures were flat this morning after Obama’s successful bid for re-election. However, around 7 a.m. comments from Mario Draghi, president of the European Central Bank (ECB), sent the market significantly lower.

PIMCO’s Mohamed El-Erian, interviewed on Bloomberg TV, relayed Draghi’s proclamation that Europe and Germany continue to weaken. Not only is Germany slowing, but their unemployment rate is going up. This raises questions about how Germany will react and an insular Germany would be a negative, El-Erian added.

Not only are the markets worried about Germany, but they are worried about Greece, El-Erian said. There hasn’t been enough attention placed on these two key issues, El-Erian stated.

Back in September, El-Erian correctly predicted the Fed would engage in QE3 [link].

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