Moral Outrage
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US consumer confidence drops to three decade low

The biggest one-week slump in stocks since 2008 and the threat of default on the nation’s debt may have exacerbated consumers’ concerns as unemployment hovers above 9 percent and companies are hesitant to hire.

Meanwhile, China’s central bank said that the U.S. faces “debt sustainability” risks in the medium-and-long-term, the latest expression of concern from the nation that is America’s biggest creditor. In addition, the euro zone’s debt woes may spread to “key nations,” it said.

China owns $1.16 trillion of U.S. Treasuries, more than any other nation.

And confidence among U.S. consumers plunged in August to the lowest level since May 1980, adding to concern that weak employment gains and volatility in the stock market will prompt households to retrench.

Rising pessimism poses a risk household spending will cool further, hindering a recovery that Federal Reserve policy makers said this week was already advancing “considerably slower” than projected.

[Bloomberg]

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