A Slow Down In The Chinese Economy

A Mark Farber video tells the story of the current economic situation.

He says he expects the dollar to strengthen. Not because it is any good, but because all the rest are worse.

Interesting headline: Shares slump on US, Chinese, German weakness

A grim outlook for the US economy from the Federal Reserve and signs of slowing in China and Germany drove world financial markets deep into the red on Thursday.

Share indexes at the biggest European bourses dived over four percent; overnight Tokyo fell two percent and Hong Kong nearly five percent.

Investors were rattled by the statement from the Fed that there are “significant downside risks” to the US economy as it unveiled a bond buying programme that didn’t satisfy the markets:

Analyst Robert Halver with Baader Bank in Frankfurt said: “The Fed did not do the right thing. The markets had expected even more to stimulate the US economy. We have a political crisis, a financial crisis, a banking crisis and is very bad for the markets, for the mood.”

On top of that Chinese factory output fell again in September and business activity in Germany was weak.

Uh. Oh.

Looking for some good news in all this? I don’t have any. Commodities Falling around the World, China Weakness Cited

Commodities skidded on Thursday as investors scrambled to liquidate after a U.S. Federal Reserve warning, coupled with signs of slower growth in China and Europe, stoked worries about slowing demand for fuels and metals.

Benchmark industrial metal copper tumbled to a one-year low, oil shed more than $4 a barrel and even traditional safe-haven asset gold faltered as a rallying dollar crimped demand for commodities priced in the U.S. currency.

“We can have bear market rallies, but I can’t see in the background where the big good news is going to come from,” said Sean Corrigan, chief investment strategist at Diapason Commodities Management in Switzerland. “We’re left with the prospect of no further white knights.”

H/T Zero Hedge


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One response to “A Slow Down In The Chinese Economy”

  1. joshua Avatar

    “He says he expects the dollar to strengthen. Not because it is any good, but because all the rest are worse.” Yep, the “Tallest Midget” theory I heard from one of the guys at Econlib, forget if it was Caplan or Kling.

    The good news? Gas in St Louis is under $3 for the first time in months!