Haven’t paid much attention to the global crash in stocks over the past couple weeks because I’ve been figuring, after all these years, that the central banks would be able to make them go higher before things got bad. I know full well that an economy based upon fake money and debt cannot go on forever, but after watching it keep going for 7 years, I figured they’d be able to keep the ball in the air for a few more years. But, maybe not – from Zero Hedge:
FACTS: By midday break, nearly 2000 stocks down 10% daily limit in Chinese market — only 13 stocks up; Shanghai benchmark index down 8.45%
…It is unclear just what is going on, or whether some prop desk or hedge fund just got tapped out, and/or how the Fed will react but the last time we had action like this, the Fed confused a liquidating SocGen trader for an economic collapse, and cut rates by 75 bps in January of 2008. This time it does not have that luxury.
Indeed – back in 2008, the Federal Reserve – and pretty much every other central bank – got into money-printing and zero percent interest to support the collapsed market: what do they do, now? I don’t know – but we’ll see. I was fully expecting the DOW to sky rocket on Monday morning after Friday’s sell off…and that still might happen. We’ll see.