The world was a sea of red last night. China traded off by as much as 5% before closing roughly 1% lower, though many of the indices there were worse. Equity markets were even weaker in Japan and Europe, losing about 4% and 2.5%, respectively. The SPOOs were smacked for about 1% early on and were roughly 2% lower by the time New York opened….
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I’m really not sure what the proximate cause was for all that red ink. The mainstream media blamed it on the Chinese PMI report, which registered 47.3%. However, expectations were roughly the same, so I have a hard time believing that was the cause.
Don’t Use a Window When You Need a Mirror
One of the reasons our media keeps wanting to pin lower stock prices on China is they can’t possibly believe that the cause might be home-grown. They don’t understand my closing point from yesterday (which I have been making for some time now), that the only reason the stock market, the dollar, and perceptions about the economy were as rosy as they were was because the Fed printed enough money to drive equities to the moon. Now the tide is going out.
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