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8/24/15

Wall Street Crash--As U.S. And China Blame Each Other "while brokers smile all the way to the bank" - by George Chen

In China, the benchmark Shanghai index sank over 8.5% on Monday, the biggest drop in eight years. Chinese state media quick jumped to their easy conclusion: Let’s blame the global market environment, particularly, the United States and its monetary policy uncertainty following the Federal Reserve’s most recent (and perhaps most confusing) statements on whether it will raise interest rates anytime soon.

Mainstream U.S. media quickly joined the blaming game as well. From Bloomberg to the Wall Street Journal, they faulted China for the today’s stock market panic. Dow Jones Industrial Index lost over 1,000 points at today’s opening, the worst since the collapse of Lehman Brothers during the 2008 financial crisis.

In other words, as global markets sank from east to west, the Chinese and American media tried to hold the other responsible for the frenzy. Childish? I say it is also a fair reflection of lack of mutual trust on both sides.
Many financial analysts believed Beijing’s recent decision to devalue its currency should be considered an advanced action in response to possible rate hike approved by the U.S. Fed. What China’s top leaders like least is uncertainty, so they wanted to act before the Fed forced anything upon them.

Note EU-Digest: the Wall Street Casino is alive and well and brokers are in for huge profits  playing "the margins game" as small jittery investors are selling stock on a large scale to recuperate their losses and who later will probably buy them back,  when the stocks start rising again. 


Read more: Stock Markets Crash--And The U.S. And China Blame Each Other - Forbes

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