Wall St. Falls Hard As Weak China Data Stokes Fears
Source: Reuters
Tue Sep 1, 2015 2:33pm EDT
Wall Street slumped more than 2 percent on Tuesday, pushing all three major U.S. indexes into losses for the year after weak data from China added to fears that a slowdown in the world's second-largest economy will constrain global growth.
The sell off was broad. All 10 major S&P sectors were more than 1.5 percent lower while all 30 Dow components were down at least 1.2 percent.
"It's general risk aversion manifesting itself after a really bad August," said Mohannad Aama, managing director, Beam Capital Management LLC in New York. "The continued uncertainty about China is definitely adding to worries."
China's manufacturing sector shrank at its fastest pace in three years in August. Other data showed the pace of growth in the U.S. manufacturing sector slowed in August to its weakest in over two years.
Read more: http://www.reuters.com/article/2015/09/01/us-markets-stocks-idUSKCN0R140620150901
onethatcares
(16,161 posts)when things are based on smoke and mirrors and geared toward maximum profit it's like building a house on wet sand at the beach.
For years we've watched companies outsource, downsize, cut corners and kill employment without any cares except maximizing shareholder profit. What did they think would happen.
And isn't China buying 2% of its own market each day to prop up the mirrors?
jtuck004
(15,882 posts)newthinking
(3,982 posts). To put the heat on external factors and divert attention? "news" is almost completely narrative based. We have crossed very serious thresholds in information manipulation particularly in recent years: it has moved far past being simply "bias" and much of the population is unaware of how far it has gone.
Psephos
(8,032 posts)Eventually the music stops. History is instructive.
Kelvin Mace
(17,469 posts)Did you not see this coming? Did you not understand that what goes up MUST come down? Did you not understand that growth is not infinite?
If you failed to understand any of these non-negotiable realities then you are incompetent. If you did underdstand these realities yet took no action to ameliorate the eventuality you are incompetent.
bucolic_frolic
(43,024 posts)In 2008, the economy had been built on loose lending for houses
while our nuts and bolts manufacturing was sold and shipped to Asia.
Capitalists made a profit on it.
Workers lost good jobs and lifetime support, money was passed up the
income scale, and soon there was not enough spending to support the
economy. Money was at the top of the income scale.
The Fed acted to save the banks and prevent deflation. It would have
been a financial collapse that reverberated in the real economy.
Now we have service sector jobs, loose lending for autos, and money
is at the top of the income scale.
Fed QE prevented deflation, but 0% interest rates created a capital
investment boom because everything seems profitable when money
is free or almost so. So that created overcapacity, we have a glut,
worldwide, of goods, especially oil from fracking and drilling. So with
an overabundance of goods and weak earnings growth, we face
deflation again, this time in the real economy, not in the financial
economy. China makes the situation larger, and worldwide.
It's going to be a soaker. Be prepared.
Response to bucolic_frolic (Reply #6)
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bucolic_frolic
(43,024 posts)That's about my limits of knowledge. Sadly.
L0oniX
(31,493 posts)Gamblers will be gambling.
Still In Wisconsin
(4,450 posts)Wall Street is just an ultra-high stakes casino.
vinny9698
(1,016 posts)It is all insider trading. Practiced legally but unethically. Notice the brokers make money both ways, selling and buying, they recommend mutual funds which give them the biggest commission regardless of profit potential to the consumer.
Prices are set up high to maximize profits, as they said in the Civil War the year of the shoddy. That's what we get from Wal Mart and other resellers. Shoddy merchandise for high prices.
Still In Wisconsin
(4,450 posts)And we ain't the house.