Hundreds of billions of dollars have been wiped off global stock markets following China’s “Black Monday.” Asian, European and U.S. indexes were all hit, with the Dow Jones, at one point, dropping over 1,000 points. Chinese stocks fell 8.5% overall, their biggest drop since 2007. Following that, European stocks suffered their biggest loss since 2008; in Europe, the FTSeurofirst 300 index lost a colossal $521 billion. In the U.S., the panic looks set to continue in the coming week, with the VIX index (also known as the Fear Index) rising 67% to its highest level since January, 2009. Commodities prices also took huge hits; oil is currently at $39 per barrel.
Former U.S. Treasury secretary, Larry Summers believes that the Federal Reserve will now try to ease monetary policy, rather than their expected interest rate rise. He said, “It is far from clear that the next Fed move will be a tightening.” As news was coming in of the global response to the crash in China, he commented, “We could be in the early stage of a very serious situation.” U.S. technology stocks took some of the larger hits, with, at one point, Facebook down 14% and Apple down 11%.
It is clear who many analysts and investors feel is responsible for these events. As U.K. economy journalist Paul Mason commented via Twitter, “Markets slump as world realizes main growth engine in hands of incompetent, secretive police state that thinks it can dictate equity prices.” If you are concerned that the U.S. economy is being damaged and directed by the inaction of others, please Like & Share this post.