Stop blaming China for the recent stock market rout

Discussion in 'General Trading Discussion' started by baudwalk, Sep 4, 2015.

  1. baudwalk

    baudwalk Senior Investor

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    http://www.cnbc.com/2015/09/03/stop...bigger-than-that-stock-market-commentary.html

    An opinion piece written by Brian Kelly suggests that expansion of the global money supply by activist central banks is to blame for the recent collapse of markets around the world. I find this to be interesting food for thought and raises an awareness of the flows of monies not immediately apparent to me. HTH. YMMV.
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Yeah, you cannot go on printing, pumping, borrowing, and suppressing rates forever without some consequences eventually.
     
  3. Nox

    Nox Guest

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    I agree that China isn't to blame, if anything I believe that it's the Chinese economy that has kept global markets relatively intact in the current post sub-prime crisis era. While markets may have overreacted to the news, I believe that the weakness in the Chinese economy has reminded investors of the many weaknesses that still remain in the financial markets the world over. We can't expect to piggy-back off of the Chinese economy forever. The markets need to be fundamentally stronger if we want to avoid or negate the level of volatility currently inherent in the markets.

    That was quite an interesting article your posted a link to. The article really goes full circle on how we got to where we are today. I think we are finally coming to terms with where the markets are right now. The unfortunate part is that many economies haven't done enough to strengthen their markets. Those markets that experienced significant cash flows during the "search for yield" are now finding themselves faced with the possibility that these cash inflows may reduce immensely.
     
  4. WaveWage

    WaveWage Well-Known Member

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    Well, it is logic that if we are dependent of China for some of our debts, of our commands in both ways, for anything going to clothes (often from China to other countries) from aircrafts (more often from other countries to China), it is purely logic the recent markets aren't happy.


    The thing is these markets wanted, somehow, this China dependency, by asking margins and prices that's not really sustainable. For example, if stockholders of big companies stopped to look too much for easy money by keeping the same price for a product while outsourcing its manufacturing, we would be less dependent of China. However, China is to blame, because they produce less than expected. But we are to blame to keep this dependency strong. You see?
     
  5. 111kg

    111kg Guest

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    This wasn't a collapse, this was a correction. A major one, but still a correction. The banking sector is corrupt and so are the financial markets. People want more money no matter what and never seem to learn their lessons. However, we are not in a crisis. We are perhaps close to the beginning of a crisis, but not there YET. Although some states defaulted, the main economic powers in the world, except for China, are still going strong.
     

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