SAN DIEGO (CNS) - A University of San Diego business professor said Monday that the stock market dive is a result of the failure of the nation's political leaders to act cohesively when solving the debt ceiling issue in recent weeks.
Alan Gin, known for his monthly San Diego Index of Leading Economic Indicators, told City News Service that today's drop of nearly 635 points by the Dow Jones Industrials was prompted by Friday night's lowering of the U.S. credit rating by Standard & Poor's, which cited concern over the "political discourse" and "intransigence" in Washington, D.C.
S&P lowered the long-term sovereign rating on U.S. debt from AAA to a still-strong AA+, but it had a huge impact on investors.
The firm said the way the debt ceiling negotiations went led to doubts that future progress could be made in corralling public spending or raising revenues.
Gin said "ideological rigidity" in the federal government made him "pessimistic," as well.
"The ideal solution is if politicians take this as a wake-up call and moderate some of their positions," Gin said. "The market is really concerned about the economy and the debt situation."
The giant drop in the stock market follows a 513-point fall last Thursday. The market is 2,000 points below its high point of 12,810 on April 29. The value of another major index, the S&P 500, has decreased 18 percent from its 52-week high.
Kelly Cunningham, of the National University System Institute for Policy Research, said investors were also reacting to poor economic news, including an employment report Friday that he called "pathetic." He said the slight increase in the number of jobs was "spun" because far more positions need to be created to make a dent in unemployment.
Cunningham, interviewed Friday by City News Service, said odds of the U.S. economy falling back into a recession are "very high," and he questioned if the last one ever really ended.
Spending by government, not business, raised the Gross Domestic Product, creating "a phony recovery," he said.
Two people were killed Monday when a roughly 75-foot-tall tree fell onto a two-story house in the Point Loma Heights area.
In Monday’s Daily Dose, we’ve got a tour around San Diego your belly will thank you for. San Diego Restaurant Week allows you to explore your favorite areas and score great deals on food along the way.
A rare spectacle in the sky captivated people around the world on Sunday night – including those here in San Diego. A lunar eclipse of the so-called “Super Blood Wolf Moon” was a stunning sight for dozens who gathered at Balboa Park.
Three San Diego police patrol vehicles were damaged Monday during a brief pursuit of a suspected drunken driver in the Point Loma Heights area.
The highest king tides of the year peaked early Monday morning. All along San Diego’s coasts this weekend, News 8 captured footage of big waves and some flooding.
County offices including libraries and animal shelters are closed Monday, Jan. 21 for the federal holiday in observance of civil rights leader Martin Luther King Jr.
A Democratic newcomer who challenged indicted California Republican Rep. Duncan Hunter last year will run again for the seat in 2020.
Kamala Harris, a first-term senator and former California attorney general known for her rigorous questioning of President Donald Trump's nominees, entered the Democratic presidential race on Monday.
Gusty winds are expected to sweep through San Diego County starting Monday and cause potentially dangerous driving conditions through Wednesday, meteorologists said.