Global wealth shrinks for the first time since Lehman

This speaks to the “financialization” of the modern economy we referenced in a post yesterday. In a fiat currency world the banks truly, and almost totally run the show. The central banks particularly. And the American Federal Reserve most of all. If one is riding the financial asset train one is likely better off than one was in 2000. If however one is not on that train, if one lives in the real economy as most middle class Americans do,

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Dow briefly plunges 300 points; biotech pushes Nasdaq 3% lower

We’ll see how the rest of the day pans out. At this moment we’ve got an hour and a quarter to go. But medium term sentiment on Wall Street appears to be be shifting as we see yet another day of broad selling.

It’s been a weird ride since midsummer. Mostly down but with a few big pops up. The Dow is off 2000 points or so from its high. People are starting to look around with a little more adrenaline in thier veins.

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Cronynomics: China stock market rebound the result of ‘secret’ government intervention

Things just keep getting wackier in The Ultimate Crony Capitalist State.

Hey, why not just have the government come in and buy up the stock market? That ought to do the trick. Nothing could possibly go wrong with that. It’s not like this whole crash was precipitated by central planning and malinvestment or anything.

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So the market went up 441 points today, then dropped like a rock in the last hour of trading, finishing 204 points down

Image: Marketwatch

At the start of the day everyone had “plunge protection team” in the back of their minds. (Even if they wouldn’t say it.) It looked as if the short term fix was in. But it turned out to be more short term than many expected. When the dust cleared we were down, again, for the 6th day in a row.

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Dow futures skid 500 points as Wall Street preps for steep selloff

China down 8.5% FOR THE DAY. Europe down broadly, 3-4% on huge volume. And on Bloomberg everyone is asking, why?

The new China ride?

Why? Because China (just China?) is in deep trouble. Because the Chinese central bank has intervened big time and has failed. The market has overwhelmed a large central bank and that is new.

I’m guessing that there were more than a few meetings at the Federal Reserve over the weekend.

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Dow 5,000? Yes, it could happen

Here’s a good dose of gloom for you. The author is not saying it will happen, but he is arguing that Dow 5000 is not completely crazy. Frankly I’d be for it. If we could carve out all of the central bank fluff created post-2008 and returned to a real live market such a crash would be worth it. (It might not be so great for all those baby boomers who have ridden the Fed induced rally right before retirement however.)

I wouldn’t say that a crash on this scale or a re-institution of real,

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Short-seller Chanos on China: ‘It’s worse than you think’ (Video)

Is all this going to crumble into the ground? No way. But China does have some serious soul searching in front of it.

The point we’ve made with China, The Ultimate Crony Capitalist State, is that much of the “growth” the country has seen has been driven by central planning, which in the end is doomed to fail. One can not centrally plan an economy the size of China’s over the long term.

Self dealing.

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David Stockman: “The world economy, including the US, is heading into what is clearly going to be an apical deflation. The likes of which we’ve never seen in modern times.”

“Kind of a debt supernova.”


It’s a bold statement from a guy who makes bold statements. He’s of course been bearish for a good long while as readers of this site know. However, he is speaking in broad terms here. He is putting together pieces on a global scale. Plus he understands that the market booms we’ve experienced, driven by central banks are not fundamentally sound. That is the key.

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The Ultimate Crony Capitalist State struggles with reality, “The beginning of a much larger turndown with China” (VIDEO)

It should be noted that when aspirational countries hit economic brick walls they often do not react well. Suddenly power shifts, as do markets and political perspective – in policy circles and in the general population. This creates instability, which threatens the powers that be. The powers that be then react.

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China’s stock-market crash is just beginning

This would be fun to watch if it wasn’t for the fact that an unstable China creates a number of problems for us, the USA, economically and perhaps in other ways. But here’s a good bit of advice from the author of the attached article.

When Shanghai was peaking at 5,000 in June, I gave you five words of advice: Get. The. Hell. Out. Now.

To which I’ll add five more: And.

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