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The global market crash continued on Monday, starting with China and then continuing around the world.


Fresh from being slammed by more than 4% on Friday, a sell-off that took weekly losses to more than 10%, Chinese stocks were hammered yet again on Monday.


At the close the benchmark Shanghai Composite index fell 8.492% to 3,209.91, taking its losses from the multiyear peak of 5,178.2 hit on June 12 to 38%.


The Chinese media is dubbing the collapse “Black Monday.”


Other markets in Asia also got hammered, with Hong Kong and Japan both falling 5%. Europe markets continued the rout, with most major indices down 2%-3% in early trading. And US DOW futures were down more than 400 points three hours before the market open.Scissors-32x32.png

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Dow drops 1,000 points on turbulent day for Wall Street


Stocks fell by hundreds of points in the opening minutes of Monday’s trading, setting off fresh fears about U.S. markets and the global economy.


Stocks swung by hundreds of points shortly after trading began, as the Dow Jones Industrial Average fell by over 1,000 points almost immediately.


However, the market swung back strongly as well, surging by a few hundred points after the initial sell-off. A half hour into the day’s trading, the blue-chip stock index was down a little under 400 points and rising.

But the high drama in the markets set off flashbacks to the financial crisis of 2008, and started fresh chatter about what, if anything, could or should be done to steer through it.


Monday's immediate sell-off came after the blue-chip stock index lost over 1,000 points in the three days prior. The opening was one of the market’s worst since the financial crisis of 2008-2009.Scissors-32x32.png


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US stock futures rise as world markets settle down despite China freefall



Most stock markets around the world gained Tuesday, as the recent global market rout showed signs of easing.


European stocks climbed sharply, while U.S. stock futures surged, shrugging off another sharp drop in Chinese stocks. Treasurys slipped, as the fierce demand for haven assets faded.


The moves came after stocks around the world tumbled on Monday as concerns about a slowdown in China’s economic growth rattled investors.


There was no letup in the selling in Chinese markets Tuesday. Shares in Shanghai closed 7.6% lower as the index fell below 3000 for the first time since December, following the worst one-day loss in more than eight years on Monday. Japan’s Nikkei closed 4.0% lower after staging a short-lived recovery.


But elsewhere, markets steadied.Scissors-32x32.png



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Reliving the Crash of '29

AUGUST 25, 2015Murray N. Rothbard

[First published in Inquiry, November 12, 1979.]

A half-century ago, America — and then the world — was rocked by a mighty stock-market crash that soon turned into the steepest and longest-lasting depression of all time.


It was not only the sharpness and depth of the depression that stunned the world and changed the face of modern history: it was the length, the chronic economic morass persisting throughout the 1930s, that caused intellectuals and the general public to despair of the market economy and the capitalist system.


Previous depressions, no matter how sharp, generally lasted no more than a year or two. But now, for over a decade, poverty, unemployment, and hopelessness led millions to seek some new economic system that would cure the depression and avoid a repetition of it. Scissors-32x32.png


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The Treasury Department's massive misread on China


The U.S. stock market showed just how linked it is to China this week, a few short months after Treasury Secretary Jack Lew insisted that China's market and the U.S. market have almost no direct linkage.

"I will say that China's markets still are pretty much separated from world markets," Lew said at the Brookings Institution in July. "They're, obviously, moving towards being more integrated, but right now they're not."


"So you're not going to, I don't think, see the direct linkage there," Lew added.


It's unclear if Lew is rethinking his theory after the last few days, after the U.S. market followed China's right down a sinkhole. China's market has been tanking since the summer, and on Friday, it fell 4.2 percent.Scissors-32x32.png



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China’s Crash Complicates Its * Peaceful Rise
Michael Cruickshank

August 25, 2015


Over the last month the Chinese stock market has seen massive day-on-day falls representing a loss of billions of dollars of value, and the rapid deflation of certain sectors of its economy. This combined with a number of other factors could give rise to a dynamic where the country may need to become more belligerent in order to maintain internal order.




Fundamental to the modern CCP is the concept of the Harmonious Society ( 和谐社会), an idea which enshrines stability as the core goal of the government. Effectively every action the CCP takes, from its internet censorship to its aggressive market interventions, is undertaken with this in mind. Should large numbers of Chinese people lose their manufacturing jobs, or their savings through a property/stock market crash, this would cause massive internal instability.





Within this dynamic, alongside an internal crackdown, the Chinese government would likely eye moves which could unite the country through nationalism. Among the most alarming of these are possible aggressive moves in the South China Sea, and the Diaoyu Islands. These could involve provoking neighbors like Japan and Vietnam into a small-scale skirmish to distract from internal unrest. Other less likely locations for such posturing would be the Indian border in the Kashmir region, an area home to recent Sino/Indian disputes, and the Chinese border with Myanmar, scene of a deadly cross border incident earlier this year.


The goal of any such provocations would not be to conquer territory or indeed even to gain international diplomatic capital, but rather simply to bolster internal stability against a foreign threat. Despite this, there is a very clear escalation risk that comes with such moves. Accordingly, the Chinese economy would have to be in a significantly poorer state than it is now, before the CCP would be willing to risk such a step.






* Peaceful?

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Communists Remain Communists


China pins market plunge on financial journalist, airs ‘confession’

Emily Rauhala

August 31 2015


What's roiling China's stock market? A journalist, apparently.


Wang Xiaolu, a reporter for a respected Chinese business magazine, "confessed" to causing chaos and panic in the markets, state media reported Sunday.


In footage broadcast Monday morning on CCTV, China's state broadcaster, a weary-looking Wang said he obtained information about China's securities regulator "through private channels" and then added his "own subjective judgment" to the report. "During a sensitive period, I should not have published a report which had such a huge negative impact," he said.



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  • 2 weeks later...

China’s Troubles Trip Up Africa

Sept. 9 2015


The faltering Chinese economy is raising serious concerns in Africa, where many countries looking for development capital had thrown in their lot with Beijing. From Kenya to South Africa, Chinese companies have inked contracts to build railroads, develop mines, and drill for oil.


Yet now some of China’s biggest trading partners in Africa fear that their bet on Beijing may prove to be a losing one, as the Wall Street Journal reports:




Many of the countries most reliant on Chinese involvement are hotbeds of terrorist activity, for example. If China retreats in places like Sudan and Nigeria (which is in the midst of an expensive effort to fight Boko Haram and root out corruption), weaker economic conditions will only exacerbate preexisting problems—and as unfortunate as that will be for Africa, it’s not great for the rest of the world, either.

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