Unexpectedly, Stocks Continue to Fall

Why are people surprised?

Doomsday clock for global market crash strikes one minute to midnight as central banks lose control China currency devaluation signals endgame leaving equity markets free to collapse under the weight of impossible expectations 47K 3K 32 746 50K Email By John Ficenec, video by Ju Zhang3:06PM BST 17 Aug 2015 Comments1527 Comments

When the banking crisis crippled global markets seven years ago, central bankers stepped in as lenders of last resort. Profligate private-sector loans were moved on to the public-sector balance sheet and vast money-printing gave the global economy room to heal.

Time is now rapidly running out. From China to Brazil, the central banks have lost control and at the same time the global economy is grinding to a halt. It is only a matter of time before stock markets collapse under the weight of their lofty expectations and record valuations.

The FTSE 100 has now erased its gains for the year, but there are signs things could get a whole lot worse.

That was published Monday, after the China crash. Oh, and China's been crashing for a while. Oh, and much of Europe has already slid into 0% growth or minimal growth. Oh, and the weak US growth seems mainly due to the Fed's many-year run of 0% interest rates, artificially priming the pump with lots of freshly minted dollars.

And yet today's fall is a "shock." To the Obama loving media, and to the Obama donating donor class, maybe.

Not really a shock to everyone else.

U.S. stocks traded about 2 percent lower on Friday, extending a recent rout, as concerns about slowing global growth continued to pressure investor sentiment.

"Right now there is a feeling of fear in the marketplace and all news is interpreted negatively and it's interpreted indiscriminately," said Tom Digenan, head of U.S. equities as UBS Global Asset Management.

The major averages accelerated selling in early afternoon, nearing correction territory and on track for their worst week since 2011. Earlier, the averages briefly attempted to halve losses in mid-morning trade.

The Fed's typical reaction to a downturn is to reduce interest rates and increase the money supply. But they've been artificially goosing Obama's failed economy for years with 0% rates and the money supply is hugely inflated by now.

So what do they have left, should the economy turn down?

posted by Ace at 01:44 PM

| Access Comments