Monday’s stock-market fall may be a sign of more serious trouble ahead

[WVK]

“The Dow dropped 614 points yesterday, its worst day since October 2020 — and most analysts blamed worries about Chinese real estate

That would seem an odd thing to be causing such fear and loathing in the US stock market, but don’t discount it — such seemingly unrelated spasms are often the spark of something far worse.”

https://nypost.com/2021/09/20/mondays-stock-market-fall-may-be-a-sign-of-trouble-ahead/

So what effect would a severe economic shock have on our politics? Would it bring us together or would there be fist fights on the soup lines?

[L.A.T.1961]

It might not be too bad if the effects of the pandemic is used as a yard stick.

Something much more similar to a traditional recession caused by money shortage as banks pull their horns in.

 

[simplybill]

The opening line of Mr. Gasparino’s commentary brings back memories. Back in my high school days, people would sometimes respond to an offhand remark with, “What does that have to do with the price of rice in China?”.

Mr. Gasparino:
“The Dow dropped 614 points yesterday, its worst day since October 2020 — and most analysts blamed worries about Chinese real estate.”

Today, the Dow Jones Industrial Average is hovering just above 34.000. A 600-point drop, or 1.77%,  barely moves the needle compared to the October 19, 1987 Black Monday event when a drop of 508 points in the DJIA amounted to a 22.8% reduction. I remember going to work the next day and sensing a cloud of impending doom in our workplace as people worried about their investments and retirement accounts. Other people scooped up the low-priced stocks and made a killing when the stock market rebounded. It’s all about perception.

 I’m not too worried about Chinese real estate, but I am worried about the long-term affects of our national debt here in the USA, currently at $28,429,000,000,000 and rising. 

https://en.m.wikipedia.org/wiki/Black_Monday_(1987)

https://www.pgpf.org/national-debt-clock

 

 

 

 

Edited September 21, 2021 by simplybill

[+Desertrat56]

2 hours ago, WVK said:

“The Dow dropped 614 points yesterday, its worst day since October 2020 — and most analysts blamed worries about Chinese real estate

That would seem an odd thing to be causing such fear and loathing in the US stock market, but don’t discount it — such seemingly unrelated spasms are often the spark of something far worse.”

https://nypost.com/2021/09/20/mondays-stock-market-fall-may-be-a-sign-of-trouble-ahead/

So what effect would a severe economic shock have on our politics? Would it bring us together or would there be fist fights on the soup lines?

Like this was a surprise.   You can't pump up a balloon more than it can hold and it just popped.    I am sorry to laugh, I expect my 401k is gone now.  I guess I will check to see but investing in wall street is the same as playing games at a casino.   The economy has nothing to do with wall street except that it causes corporations to find new ways to steal money, usually from their workers.   The real economy is based on how well you can live on what you earn and whether you can get a job or not.    I know when this kind of thing happens more people probably will become unemployed.  

[L.A.T.1961]

1 hour ago, simplybill said:

 

 I’m not too worried about Chinese real estate, but I am worried about the long-term affects of our national debt here in the USA, currently at $28,429,000,000,000 and rising. 

https://en.m.wikipedia.org/wiki/Black_Monday_(1987)

https://www.pgpf.org/national-debt-clock

 

It has been the elephant in the room for many years but one thing the US has in its favor is its seen as too big to fail on debt repayments.

The $ is still in demand.  

Not as anything is completely bullet proof.

[F3SS]

Things like this suck for people close to retirement but it's always a huge opportunity for those with more time. It's no fun seeing your portfolio shrink. We all got hammered pretty hard during those early covid crashes and anyone who held and kept buying probably has done pretty well in the last 18 months. 

[Tatetopa]

16 hours ago, WVK said:

That would seem an odd thing to be causing such fear and loathing in the US stock market, but don’t discount it — such seemingly unrelated spasms are often the spark of something far worse.”

This Chinese Real Estate company has holdings and massive debts in the EU and US. If they default on their debts, a lot of banks and investors will be out of luck.  I think it is close to a trillion dollars.  It would be a big hit in th eUS and all over the world.

[+Desertrat56]

8 hours ago, Tatetopa said:

This Chinese Real Estate company has holdings and massive debts in the EU and US. If they default on their debts, a lot of banks and investors will be out of luck.  I think it is close to a trillion dollars.  It would be a big hit in th eUS and all over the world.

Could it cause a war?   Do you think that is the point of it all?

[+OverSword]

9 hours ago, Tatetopa said:

This Chinese Real Estate company has holdings and massive debts in the EU and US. If they default on their debts, a lot of banks and investors will be out of luck.  I think it is close to a trillion dollars.  It would be a big hit in th eUS and all over the world.

I wonder if that's the company that owns the building I work in?

edit: nope.  

Edited September 22, 2021 by OverSword

[spartan max2]

Is it those GME kids again lol

[Tatetopa]

2 hours ago, Desertrat56 said:

Could it cause a war?   Do you think that is the point of it all?

 They are warning of default in  China too.  They did make an interest payment today and have another big one coming up soon.  I overstated, the latest number is $300 billion at risk far less than a trillion.  Still a lot of money

I wonder if Xi's ego got the best of him.  This push they are having now in China to tamp down mega businesses and the very richest may be hurting their own economy.  I think a head of state gets nervous when powerful businessmen can also influence a nation's direction.

[+OverSword]

5 minutes ago, Tatetopa said:

 They are warning of default in  China too.  They did make an interest payment today and have another big one coming up soon.  I overstated, the latest number is $300 billion at risk far less than a trillion.  Still a lot of money

I wonder if Xi's ego got the best of him.  This push they are having now in China to tamp down mega businesses and the very richest may be hurting their own economy.  I think a head of state gets nervous when powerful businessmen can also influence a nation's direction.

It's not Xi.  It's greedy council persons at the city level and owners of real estate companies over-extending themselves.  I recently watched an NHK documentary titled Ghost Castles which outlines what's going on with these real estate companies in China.  The cities, who own the land lease it to real estate companies for 75 years.  The real estate companies offer a deal if you get in on the "ground floor" to citizens who then turn over their life savings for a new apartment not yet built and then once they have a bunch of money the construction halts and people are left with nothing but the empty shell of a building.

Edited September 22, 2021 by OverSword

[simplybill]

On 9/21/2021 at 12:07 PM, L.A.T.1961 said:

It has been the elephant in the room for many years but one thing the US has in its favor is its seen as too big to fail on debt repayments.

The $ is still in demand.  

Not as anything is completely bullet proof

I agree with you on all points, though I’m concerned about China’s push to replace the American Dollar as the default currency for global trade. I suspect that China is waiting to pounce on any sign of weakness in the US economy to promote their ‘geopolitical ambitions’ as an alternative. The link below is a time.com article published yesterday. 

From the article:

“China is in the midst of a long-term push to simultaneously grow its financial markets and internationalize its currency. Both have the end goal of allowing China and its allies to limit the ability of the U.S. to enforce its will through economic actions like sanctions.”

“Fanusie wrote in a January report that being the first major economy to roll out a digital currency is “part of China’s geopolitical ambitions.”

https://time.com/6099105/us-china-digital-currency-central-bank/

[L.A.T.1961]

2 hours ago, simplybill said:

 I’m concerned about China’s push to replace the American Dollar as the default currency for global trade. I suspect that China is waiting to pounce on any sign of weakness in the US economy to promote their ‘geopolitical ambitions’ as an alternative. 

I am sure they have ambitions but in the short term I think they will be held back by credibility.

I think China would have to be a more open nation with independent bodies overseeing policy making to have a desirable reserve currency. 

Better the devil you know.  

[simplybill]

1 hour ago, L.A.T.1961 said:

I think China would have to be a more open nation with independent bodies overseeing policy making to have a desirable reserve currency. 

I admit I’m a little slow on the uptake, but you just answered a question I’ve been pondering since the US military withdrawal from Afghanistan: why did China suddenly become BFFs with the Taliban, considering the Taliban’s jihadist tendencies and China’s poor treatment of their own Uighur Muslim population?

Reserve currency can be in the form of actual currency, or precious metals: 
( https://www.thebalance.com/what-is-a-reserve-currency-1978926 )

Seeing as how the precious metals supply was so severely affected by the Covid lockdowns, there’s never been a better time than now for China to ensure access to all those undeveloped precious metal deposits in Afghanistan, possibly in exchange for financial aid to the new Taliban government, and probably military aid to keep ISIS-K from spoiling the party.

This 2010 article in Mining.com spells it out. From the article:

“6. Chinese Interest
American officials also fear that resource-hungry China will try to dominate the development of Afghanistan’s mineral wealth which would upset the United States, given its heavy investment in the region. After winning the bid for its Aynak copper mine in Logar Province, China clearly wants more, American officials said.“

https://www.mining.com/1-trillion-motherlode-of-lithium-and-gold-discovered-in-afghanistan/

 

 

 

 

Edited September 22, 2021 by simplybill

[Raptor Witness]

On 9/21/2021 at 8:55 AM, WVK said:

So what effect would a severe economic shock have on our politics? Would it bring us together or would there be fist fights on the soup lines?

It was not like this after 911, when a far less lethal foe, invaded.

The United States could easily be economically destroyed. When Jesus was accused by the status quo, of using demonic power to heal sick people, He argued that "a kingdom divided, cannot stand." That's as true today as it was then. Believe in Him or not, it's a very wise statement, and argument.

The Christian Right  may be setting the stage for a backlash of secularism, which could result in a successful anti-Christian movement. I could even argue that it's becoming a self-fulfilling prophecy.

I've often wondered what it would take for an AntiChrist type of figure to successfully appear, and this "falling away" is exactly how it could happen. In fact, that's how it's supposed to happen.

Where I live, desperation could easily lead to violence, and there aren't nearly enough police officers, or national guard troops, to begin to control food riots.  I had a dream, months ago, where people living in gated communities were seen hanging from the trees in their own yards, and nothing stood in the way of this.

Financial collapse isn't an experiment that we want to try in this type of climate, but it's what I see happening, even as I type these words.

The Democrats would do well to forget the Republicans, as their goose is cooked anyway, and even the appearance of collusion with their failed ideology destroys their own credibility. Move forward quickly, without them, before certain destruction evolves.

There can be only one political scapegoat in all of this, and it must be the Republican Party, because they have earned it.

[+DieChecker]

If you ask me, I think China's on the way down. Much like the Japanese in the early 2000s. Still a world power, but rocked back hard by economic realities.

Fear of China crashing is very real. 

[WVK]

1 hour ago, DieChecker said:

If you ask me, I think China's on the way down. Much like the Japanese in the early 2000s. Still a world power, but rocked back hard by economic realities.

Fear of China crashing is very real. 

Back in the early 1990s it was thought that Japan would rule the world-Japan Inc. splashed on the cover of Time. The future isn’t what it used to be.

[spartan max2]

2 hours ago, DieChecker said:

If you ask me, I think China's on the way down. Much like the Japanese in the early 2000s. Still a world power, but rocked back hard by economic realities.

Fear of China crashing is very real. 

I think emperor Xi has alot to do with that. 

He is too focused on making a cult of personality around him and dragging China back by making stupid cultural laws. He also took the nation a hard step back in the authoritarian direction.

 

[+DieChecker]

Here's a YouTube video I just watched that related...

 

Edited September 24, 2021 by DieChecker

[jmccr8]

On 9/24/2021 at 8:16 AM, DieChecker said:

Here's a YouTube video I just watched that related...

 

Hi Diechecker

Interesting, thanks. 

Doesn’t the properly belong or end up belonging to the government one way or another? 75 year lease so if the lease is not renewed then the government owns it anyway 

[+DieChecker]

4 hours ago, jmccr8 said:

Hi Diechecker

Interesting, thanks. 

Doesn’t the properly belong or end up belonging to the government one way or another? 75 year lease so if the lease is not renewed then the government owns it anyway 

Yes, but the real issue is about 75% of Chinese citizens primarily invest in property. Not gold, or bonds, or stocks... So, if this company fails, and it appears it will, the entire Chinese financial system is going to take a giant dump.

[+DieChecker]

The Guardian: How fall of property giant Evergrande sent a shockwave through China.
https://www.theguardian.com/business/2021/sep/25/how-fall-of-property-giant-evergrande-sent-a-shockwave-through-china

[Raptor Witness]

10 hours ago, DieChecker said:

The Guardian: How fall of property giant Evergrande sent a shockwave through China.

The real underlying "shockwave" is one of deflation.

Western Federal Banks, and even Japan's banks have been desperately trying to inflate real estate, for years, even going into negative interest rates.

The ride is over, and it's all coming down, because you can't have Booming Capitalism without Bust Depressions  It's like a horse racing facility where the house always wins, but if they increase the size of the take year after year, eventually, the betters won't have enough money to continue the game. That's where we are now. The take is too high, and the betters can't cover the house's expenditures.

We can hopefully prevent violence by keeping the track open, and dispersing payouts that don't match the receipts, but it the math will eventually catch up to the house.

Coincidentally, the advent of free energy, in the form of nuclear fusion,  might conceivably be a game changer, but time is running out, fast.