Monday, August 24, 2015

China Down Another 5.5%

Shanghai is down 5.5% and dropping. This AM in US markets we saw an almost 1100 point drop. It was like watching the White Ford on the LA Freeway. Deer in the headlights.

Tuesday will be another round, possibly not as bad. We are going from a "Correction" to a massive down turn. And where are our glorious leaders? On the golf course, of course.

The key question is a two part question; (i) our exports are low as compared to imports so who cares, and if China drops values we get cheaper imports, (ii) what about the debt on the fracking companies now that oil is in the tank? The China issue may be secondary to another financial collapse hidden in low cost but un-payable debt, close to a trillion.

I guess that pipeline can wait?
But then again for China look at the past ten years. They collapsed in 2008-2009 but what we see is really a bubble bursting. So we are still on good growth if we take out the bubble. So possibly China is not a problem. Debt is however.