General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsGlobal Ponzi scheme threatens to implode
Asian stock markets opened Monday with another sharp selloff. As of this writing, Chinas Shanghai Composite index had dropped by over 8 percent and Japans Nikkei, Hong Kongs Hang Seng and Australias All Ordinaries were all down by more than 3 percent. Chinas central bank was preparing another round of cash infusions into the countrys financial markets.
The global panic, which has wiped out over a trillion dollars in stock values in the US alone, has shattered the claim that the US and world economies are in the midst of an economic recovery.
Prompted by decelerating economic growth in China, a collapse of financial markets and currencies in the so-called emerging market countries, and a continuing fall in the price of oil and other commodities, the plunge in stock prices is an expression not simply of passing conditions, but rather the inability of governments and central banks to address the fundamental contradictions of the capitalist system that led to the Wall Street crash and recession of 20082009.
What appears to be coming to an end is the period when massive infusions of cash by central banks into the financial markets, combined with a ruthless assault on the living standards of the international working class, could paper over the systemic character of the crisis and produce a boom in stock prices, corporate profits and the wealth of the financial aristocracyeven as the real economy continued to stagnate.
Read more: https://www.wsws.org/en/articles/2015/08/24/pers-a24.html
Recursion
(56,582 posts)GreatGazoo
(3,937 posts)and look at copper:
davidpdx
(22,000 posts)They are building faster than they can sell. The average Chinese can't afford the newer buildings. Someone is going to get stuck with the short end of the stick.
Javaman
(62,534 posts)I just learned something recently about just that. china bases part of it's GDP on construction of property, NOT sale.
so as long as they keep building ghost towns, all is right in Beijing.
It's a very scary prospect considering their economy is now slowing down.
davidpdx
(22,000 posts)not pre-selling enough units or just plain mismanagement. A building over by where I used to live sat half done for year. One of these days I'll have to get back over there to see if it is done.
I personally think China is in for some very rocky times, which is going to effect all of their trade partners including the US.
reformist2
(9,841 posts)BlueJazz
(25,348 posts)jeff47
(26,549 posts)Worry about how poorly incumbent parties do when there is an economic downturn at election time.
CentralMass
(15,265 posts)wilsonbooks
(972 posts)An article published Sunday in the New York Times (Investors Race To Escape Risk In Global Bonds) sheds light on a significant factor behind the crisis atmosphere on global markets. The Times explains that some of the biggest bond mutual funds based in the US, including BlackRock, Franklin Templeton and Pimco, are massively invested in emerging market government bonds whose values are now collapsing.
The article raises the very real possibility that one or more of these firms could be bankrupted by demands from investors for the return of their cash, under conditions where the firms cannot offload their emerging market bonds and meet these demands. Such an event would be comparable to, if not worse than, the collapse of Lehman Brothers in 2008.
GliderGuider
(21,088 posts)Now is when we get to see who's been hiding their risky games behind a curtain. The world economy can withstand a good deal of downward pressure so long as it's evenly applied. However, with one good sharp shock the nut is likely to crack. I think it's coming.
reformist2
(9,841 posts)What's a clawback, you ask?
https://en.wikipedia.org/wiki/Clawback
Orrex
(63,220 posts)No taxpayer-funded bailout is too enormous if it saves even one of these noble job creators.
Enthusiast
(50,983 posts)gregcrawford
(2,382 posts)... I will lay my coat over this open manhole.
BillZBubb
(10,650 posts)Economic growth in China had been running at an unsustainable 10%. It was going to revert to a more sustainable level. Unfortunately, Chinese stock buyers got caught up in the euphoria. Now, they'll pay for that.
There will be some repercussions in other markets, but this isn't 2007-2008. Westerners have little investment in the Chinese market.
The US market is also long overdue for a correction. Historically, we should have had a 20% correction years ago. Maybe now the time has come.
fasttense
(17,301 posts)This is the beginning of the 2nd crash that everyone warned us about. They said that if we didn't fix the economic problems from the last crash, the out of control banks and corrupt Wall Street, it would happen again. Some people predicted it to come near the end of Obama's term.
Nothing was done to prevent another crash except to pump money to the monied. This kept the rich safe, temporarily. And we called it a recovery. But nothing was done to keep the banksters and the uber rich from doing it again. So they did.
TexasMommaWithAHat
(3,212 posts)And it's scary.
Our 401Ks already are pitifully low, and now we have to worry about losing what little we have and our jobs, as well.
Ain't Republican leadership grand?
fasttense
(17,301 posts)When Hoover was in office he did nothing but bailout the banks during the RepubliCONS 1st Great Depression. It took a Democratic leader to get us out. If the bushes had not been appointed by the Dancing Supremes, I wonder if we would be in this economic mess now?
no_hypocrisy
(46,175 posts)She was recommending new regulations on large banks but the bank lobby kept telling representatives and senators that they should trust the banks. The financial "products" were "too complicated" for the average person on Capitol Hill to understand and therefore instead of regulation, the banks should regulate themselves.
And the banks don't care about the tanking of the economy.
Gman
(24,780 posts)The chickens are coming home to roost.
WinkyDink
(51,311 posts)husband didn't "believe in" life insurance, preferring to invest in a company with a branch managed by a friend.
stevenleser
(32,886 posts)into money market funds or something like that.
James48
(4,440 posts)TexasTowelie
(112,394 posts)The woo people are predicting the end of the world on either September 24 (comet impact) or October 7 (Biblical prophecy).
They really should meet up with each other and align their schedules.
joshcryer
(62,276 posts)The Chinese economy hype was all based on false pretenses.
tammywammy
(26,582 posts)This has been an on-going discussion for a while now. The upside is the lower demand for oil from China is leading the price per barrel of oil down, which helps my pocketbook. And that's not new in the last week either.
The U.S. market was due for a slight correction as well, but overall the Chinese correction won't have a big effect, this isn't 2008.
4Q2u2
(1,406 posts)When were heard non stop EXPERTS telling us that Japan would over take America as the #1 economy.
Call me crazy but when I have been looking at empty high rises in China for over a year now on the internet, as well as the level of corruption going on over there, I was not impressed.
FlatBaroque
(3,160 posts)Half-Century Man
(5,279 posts)Us not seeing it was mostly(70ish%) by intent(fluff pieces in the media, lowering of educational standards in citizenship); and 30 or so percent willful ignorance by largely ignoring the warnings.
Thom Hartmann, Max Kaiser, Mike Papantonio, and others have all been warning us of this for years.
wilsonbooks
(972 posts)PowerToThePeople
(9,610 posts)Not the first time and probably won't be the last. Every new generation has to have their wealth zapped by these schemes. It is a rule of western capitalism.
madville
(7,412 posts)China has kicked the can closer to the edge, maybe it will encourage some more manufacturing to return back to the U.S.