China’s stock market loses 8.4 percent in hours – This may be the start of the world’s next financial crisis

China Market Crash
August 2015BEIJING Asian stock markets took a battering in the first hours of Monday trading, exacerbating last week’s worldwide stock sell-off over fears that China’s sluggish economy may only get worse. From here, the news only gets worse.
China’s principal stock market, the Shanghai Composite, lost 8.4 percent of its value in just a couple of hours and, according to CNN, some of China’s biggest companies, private- and state-owned, took the maximum allowed 10 percent daily loss within an hour. That’s on top of a loss of 11.5 percent last week. The smaller Shenzhen Composite also lost nearly 8 percent Monday morning. –Washington Post
Shanghai Composite
China’s stock markets continued a seemingly uncontrolled drop on Monday, pulling everything from Asia stock exchanges to commodities down further with them. Despite a huge amount of government stimulus, investors have lost faith in China’s stocks and are now focused on an impossible to answer question: how bad will China’s economic slowdown be? The Shanghai Stock Exchange had fallen 8.8% by early afternoon on Monday, breaking through the 3,500 level at which the government has been supporting the market.

Taiwan Index

Concerns about China’s economic future and falling demand is also causing commodity prices to collapse. The price of Brent crude fell below the $45 mark on Monday for the first time since March of 2009:

Brent Crude Oil

The situation, particularly as the US Federal Reserve is expected to begin a monetary tightening phase, is evoking comparisons to the 1997 Asian financial crisis and the 2008 crisis sparked by the U.S. subprime lending. There’s also a growing sense that these market drops are going to be impossible to control.
Yes, as Bloomberg points out, Asian economies are in a healthier spot now than they were in 1997, but interest rates in many countries around the world are already near historic lows, so there’s little wiggle room for the world’s central banks to intervene to try to boost local economies and turn these downturns around. –Quartz
Yuan Meltdown
Having seen the nation’s benchmark Shanghai Composite stock index get slammed by 4.21% on Friday, taking its weekly loss to 11.54%, Chinese authorities wheeled out their latest attempt to underpin shaky investor confidence over the weekend, announcing that China’s giant pension fund will be able to increase its allocation in domestic shares to as much as 30%. The decision, given approval by China’s state council on Sunday, could see the fund allocate as much as 1.05 trillion yuan ($164.345 billion) according to a report in the South China Morning Post.
While another huge injection of potential capital, something that may help reduce the pressure on stocks short term, whether it can help address the market slide beyond that remains a highly debatable question at present. All one must do is look at the measures announced in recent months that were designed to stymie market losses. –Business Insider
This entry was posted in Age of Decadence, Austerity, Bank Run, Banking Crisis, Bankruptcy, Boom and Bust Cycles, Currency - Economic warfare, Economic Collapse, Fiat Money Printing Fiasco, Financial Market plunge, Financial market turmoil, Flashpoint for war, Geopolitical Crisis, Greed and Corruption, Hoarding Gold, Hoarding Resources, Resource War, Squandered Resources, Struggle for Survival, Troubled Banks, Unemployment rising, Unsustainable Debt Burden, Widening gap between rich and poor. Bookmark the permalink.

3 Responses to China’s stock market loses 8.4 percent in hours – This may be the start of the world’s next financial crisis

  1. niebo says:

    Black Monday

    “It started in China, continued in Europe, and then catastrophied in the US.”

  2. Yellow Bird says:

    Retweeted 770 times
    George Chen @ george_chen 16 h 16 Hours ago
    BREAKING: Chinese Authorities Issued Notice to State Media to Censor negative Market Reports Following # BlackMonday
    George Chen @ george_chen 3h3 hours ago
    FACTS: There have been nearly 1000 stocks in Chinese stock market already down 10% daily limit today by midday break Any hope in afternoon.?

    George Chen @ george_chen 17h17 hours ago
    What’s going on? Chinese state media all blame Western economy for Chinese stock market crash. US media all blame China for Dow crash!
    243 retweets 90 favorites
    George Chen @ george_chen 16h16 hours ago
    Best comment by local investor on Weibo: Communist Party is great Reason why Chinese stock market sinks is to show we can crash US economy!!
    107 retweets 74 favorites

    Chinese insider comment also posted on Twitter today:
    “Hong Kong shares fell completely down, Hong Kong stocks finished down European stocks fell, European stocks fell perfectly stocks fell, US stocks finished down Japanese stocks fell, Japanese stocks fell Ends A shares fell … from morning to night, one day cycle, in the end who is the father who ʱ??”
    think that says it pretty well…

  3. Yellow Bird says:

    oh oh…
    Mr Chen just posted 20 new tweets in the time it took to write that last post
    and they immediately disappeared as i was reading them

    Here’s a few from a few minutes earlier i managed to grab
    George Chen ‏@george_chen 20m20 minutes ago
    BREAKING: Bye-bye! Shanghai benchmark index sinking nearly 7%, breaking psychologically important 3,000 points level
    George Chen ‏@george_chen 12m12 minutes ago
    Chinese Gov has so far not yet shown any support to stock market today, letting market fall like Isaac Newton’s apple. So, just let it be?
    14 retweets 7 favorites
    Reply Retweet 14 Favorite 7
    George Chen ‏@george_chen 11m11 minutes ago
    This is scary – 3000 points for Shanghai benchmark index means A LOT to Chinese investors. Many began to buy when index rose to 3000 points!
    15 retweets 9 favorites
    Reply Retweet 15 Favorite 9
    George ChenVerified account
    If Beijing chooses to do nothing with stock market today, imagine how bloody Dow will open in about 7 hours. When China sinks, the world…

    (american investors tweeting hopeful responseds that Dow is currently +200 and so far rising.)

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