Another day of financial turmoil has begun, with China stocks off more than 6 per cent at the open as world markets continue to grapple with the fallout from fears about the health of the world’s second-biggest economy.
John Cassidy writes:
Obviously, things could get worse. Whether they do or not depends on whether, in the next few days, the turmoil in the Chinese market continues and signs of financial distress emerge here at home—for example a big hedge fund or financial institution getting into trouble. Bull markets, such as the one Wall Street has enjoyed for the past six years, generate a great deal of risk-taking, which often involves using some hidden type of leverage to enhance returns. As Warren Buffett famously remarked, ”Only when the tide goes out do you discover who’s been swimming naked.”
Meanwhile, oil fell below $40 a barrel, its lowest level for six years.
The GOP candidates seemed to be in no doubt who was to blame for the market meltdown.
While the New York Times reported:
Gov. Chris Christie of New Jersey, a Republican candidate who is a moderate on immigration, joined the criticism of China on Monday by saying that the federal debt “has been given to us in large measure by the Chinese” and that “as the Chinese markets have a correction” it will have an outsized impact on the United States.
While the Chinese government is in fact the largest holder of United States government debt, its large purchases help hold down the interest payments that American taxpayers must ultimately bear to service that debt.
Meanwhile on the Democratic side, potential candidate Joe Biden may have had a very satisfying lunch with his boss on Monday as President Obama returned from his two-week vacation.
The HuffPo‘s Sam Stein writes on what’s driving a potential run by a man who’s sought the highest office unsuccessfully twice before.
Turkey looks to be headed for another inconclusive election after talks over a coalition government appeared to have stalled. President Tayyip Erdogan has called for a fresh election and will meet on Tuesday with Prime Minister Ahmet Davutoglu to discuss a temporary power-sharing administration.
After Britain re-opened its embassy in Tehran at the weekend after four years, Foreign Secretary Philip Hammond met with Iranian President Hassan Rouhani.
Cheating website Ashley Madison and its parent company were sued over the recent breach and release of user data. Meanwhile, there were reports linking the revelation of user information to two suicides.
Reuters reports that Boeing is looking at “hundreds” of possible layoffs in its satellite division.
The BBC has an exclusive interview with Fifa President Sepp Blatter, who says, wait for it, that he’s “clean” and there’s “no corruption in football.” Meanwhile, from a perspective of Fifa making friends and polishing its credibility, this maybe doesn’t help…
Finally, British IndyCar driver Justin Wilson died of a severe head injury he sustained during Sunday’s race at the Pocono Raceway in Pennsylvania.