Analysts blame ‘pessimism’ for ‘grave’ market tumble

PARIS, August 7, 2011 (AFP) – The week on financial markets began with high tension over the eurozone debt crisis and culminated in a downgrading of the US credit rating. Attention focused on the outlook for the US and EU economies, and the eurozone lurched deeper into crisis which now affects even core countries.

The European Central Bank then took several steps, including buying bonds, to fight the crisis, but these and its downbeat comments on growth were badly received, and a stocks fall turned into a plunge.

EU leaders then saw the urgency of this new crisis and engaged in talks during their summer holidays, while markets focused on signs that a double-dip recession may be on the horizon.

On Friday, Standard & Poor’s cut the US rating from the top notch triple-A to AA+.

Here is what some key figures and various analysts had to say as the drama played out:

– EU Economic Affairs Commissioner Olli Rehn said the EU is working “night and day” to finalise details of a “milestone” plan to stem contagion but “such a … complex agreement requires time to implement” as current problems have “global repercussions and ramifications”.

– In Brussels,