7 Percent Crash Causes Emergency Shutdown of Stock Markets in China Twice in 4 Days - MICHAEL SNYDER CHARISMA NEWS

A screen showing the stock information after the new circuit breaker mechanism suspended Thursday's stocks trading, at a brokerage house in Nanjing, Jiangsu province, China. (Reuters)

7 Percent Crash Causes Emergency Shutdown of Stock Markets in China Twice in 4 Days

 1/8/2016 MICHAEL SNYDER  charisma news

A screen showing the stock information after the new circuit breaker mechanism suspended Thursday's stocks trading, at a brokerage house in Nanjing, Jiangsu province, China. (Reuters)

Did you see what just happened in China? For the second time in four days, a massive stock market crash has caused an emergency shutdown of the markets in China. On both Monday and Thursday, trading was suspended for 15 minutes when the CSI 300 fell 5 percent, and on both days the total decline very rapidly escalated to 7 percent once trading was reopened.

Once a 7 percent drop happens, trading is automatically suspended for the rest of the day. I guess that is one way to keep the stock market from crashing—you just don't let anyone trade. Of course the panic in China is causing other markets to go haywire as well. As I write this, the Nikkei is down 324 points and Hong Kong is down 572 points.

The amazing thing is that trading was only open in China for about 15 total minutes. Here is how CNBC described what happened:

China's stocks were suspended from all trade on Thursday after the CSI300 tumbled more than 7 percent in early trade, triggering the market's circuit breaker for a second time this week.

That drop-kicked stock markets across Asia, which were already wallowing after a weaker open amid concerns over China's economic slowdown and its depreciating currency as well as falling oil prices.

On the mainland, the Shanghai Composite tumbled 7.32 percent by at the time of the halt, while the Shenzhen Composite plummeted 8.34 percent. The CSI300, the benchmark index against which China's new circuit breakers are set, plunged 7.21 percent. If that index rises or falls 5 percent, the market halts all trade for 15 minutes. If it moves 7 percent, trading will be suspended for the rest of the day. In total, Thursday, China shares only traded around 15 minutes.

How will European and U.S. markets respond to the chaos in Asia when they open?

That is a very good question. I think that everybody will be watching.

Already, the Dow Jones Industrial Average is down about 500 points for the year. The financial crisis that began in the second half of 2015 is now accelerating as we enter 2016, and nobody is quite sure what is going to happen next.

One key to watch is what happens with the S&P 500.

2000 is kind of like a giant line in the sand on the S&P 500. On Wednesday we saw the market hover around that psychologically-important number, and there is a whole lot of resistance right there. If we break solidly through 2000 and start plunging toward 1900, that is going to break things wide open.

The primary reason for the stock market crash in China on Thursday was another stunning devaluation of the yuan. This explanation from Zero Hedge is very helpful:

Following the collapse of offshore Yuan to five-year lows and decompression to record spreads to onshore Yuan, The PBOC has stepped in and dramatically devalued the Yuan fix by 0.5 percent to 6.5646. This is the biggest devaluation since the August collapse. Offshore Yuan has erased what modest bounce gains it achieved intraday and is heading significantly lower once again. Dow futures are down 100 points on the news.

PBOC fixes Yuan at its weakest since March 2011 ... with the biggest devaluation since August.

A massive devaluation of the yuan was also one of the primary reasons for the market turmoil that we saw back in August. The Chinese are playing games with their currency, and this is causing havoc in the global marketplace.

Meanwhile, we have received some other very troubling news about the global economy over the past few days:

• The price of oil continues to collapse. As I write this, the price of U.S. oil is down to $33.26 a barrel. Those who follow my writing regularly already know that this is a really bad sign for the global economy.
• The Baltic Dry Index just hit another brand new all-time record low. Global trade is absolutely imploding, and this is having a devastating impact on China and other major exporting nations.
• U.S. manufacturing is contracting at the fastest pace that we have seen since the last recession. This is precisely what we would expect to see during the early stages of a new crisis.
• U.S. manufacturing imports are also contracting at the fastest pace that we have seen since the last recession. It appears that "the almighty U.S. consumer" is not going to save the global economy after all.

In 2015, trillions of dollars of stock market wealth was wiped out globally. Now this new global financial crisis is picking up speed, and many of the "experts" seem absolutely stunned by what is happening.

But most of my readers are not surprised. That is because I have been breaking down the signs that have been warning us of this new crisis in excruciating detail for months. The financial carnage that we have witnessed around the globe this week is simply a logical progression of what has already been happening.

To be honest, though, even I have been stunned by what has happened in China this week. I can't say that I expected an emergency shutdown of the Chinese markets two times within the first four trading days of the year.

Panic and fear are beginning to grip the global marketplace, and once that starts to happen events become very difficult to predict.

Let us hope that things settle down soon, but I wouldn't count on it.

As I have said before, 2016 is the year when everything changes, and we are going to see things take place over the next 12 months that are going to shock the world.

Michael T. Snyder is the publisher of The Economic Collapse Blog and author of The Beginning of the End.

For a limited time, we are extending our celebration of the 40th anniversary of Charisma. As a special offer, you can get 40 issues of Charisma magazine for only $40!

NEW from CHARISMA: Do you want to encounter the Holy Spirit and hear God speak to you? Increase your faith, discover freedom, and draw near to God! Click Here

7 Percent Crash Causes Emergency Shutdown Of Stock Markets In China For The 2nd Time In 4 Days - Michael Snyder THE ECONOMIC COLLAPSE blog

7 Percent Crash Causes Emergency Shutdown Of Stock Markets In China For The 2nd Time In 4 Days  Michael Snyder  THE ECONOMIC COLLAPSE blog

Posted: 06 Jan 2016 07:37 PM PST

Did you see what just happened in China?  For the second time in four days, a massive stock market crash has caused an emergency shutdown of the markets in China.  On both Monday and Thursday, trading was suspended for 15 minutes when the CSI 300 fell 5 percent, and on both days the total decline very rapidly escalated to 7 percent once trading was reopened.  

Once a 7 percent drop happens, trading is automatically suspended for the rest of the day.  I guess that is one way to keep the stock market from crashing – you just don’t let anyone trade.  And of course the panic in China is causing other markets to go haywire as well.  As I write this, the Nikkei is down 324 points and Hong Kong is down 572 points.

The amazing thing is that trading was only open in China for about 15 total minutes tonight.  Here is how CNBC described what just happened…

China’s stocks were suspended from all trade on Thursday after the CSI300 tumbled more than 7 percent in early trade, triggering the market’s circuit breaker for a second time this week.
That drop-kicked stock markets across Asia, which were already wallowing after a weaker open amid concerns over China’s economic slowdown and its depreciating currency as well as falling oil prices.
On the mainland, the Shanghai Composite tumbled 7.32 percent by at the time of the halt, while the Shenzhen Composite plummeted 8.34 percent. The CSI300, the benchmark index against which China’s new circuit breakers are set, plunged 7.21 percent. If that index rises or falls 5 percent, the market halts all trade for 15 minutes. If it moves 7 percent, trading will be suspended for the rest of the day. In total Thursday, China shares only traded around 15 minutes.

How will European and U.S. markets respond to the chaos in Asia when they open?

That is a very good question.  I think that everybody will be watching.

Already, the Dow Jones Industrial Average is down about 500 points for the year.  The financial crisis that began in the second half of 2015 is now accelerating as we enter 2016, and nobody is quite sure what is going to happen next.

One key to watch is what happens with the S&P 500.

2000 is kind of like a giant line in the sand on the S&P 500.  On Wednesday we saw the market hover around that psychologically-important number, and there is a whole lot of resistance right there.  If we break solidly through 2000 and start plunging toward 1900, that is going to break things wide open.

The primary reason for the stock market crash in China on Thursday was another stunning devaluation of the yuan.  This explanation from Zero Hedge is very helpful…

Following the collapse of offshore Yuan to 5 year lows and decompression to record spreads to onshore Yuan, The PBOC has stepped in and dramatically devalued the Yuan fix by 0.5% to 6.5646. This is the biggest devaluation since the August collapse. Offshore Yuan has erased what modest bounce gains it achieved intraday and is heading significantly lower once again. Dow futures are down 100 points on the news.

PBOC fixes Yuan at its weakest since March 2011… with the biggest devaluation since August

A massive devaluation of the yuan was also one of the primary reasons for the market turmoil that we saw back in August.  The Chinese are playing games with their currency, and this is causing havoc in the global marketplace.
Meanwhile, we have received some other very troubling news about the global economy over the past few days…

The price of oil continues to collapse.  As I write this, the price of U.S. oil is down to $33.26 a barrel.  Those that follow my writing regularly already know that this is a really bad sign for the global economy.

-The Baltic Dry Index just hit another brand new all-time record low.  Global trade is absolutely imploding, and this is having a devastating impact on China and other major exporting nations.

-U.S. manufacturing is contracting at the fastest pace that we have seen since the last recession.  This is precisely what we would expect to see during the early stages of a new crisis.

-U.S. manufacturing imports are also contracting at the fastest pace that we have seen since the last recession.  It appears that “the almighty U.S. consumer” is not going to save the global economy after all.

In 2015, trillions of dollars of stock market wealth was wiped out globally.  Now this new global financial crisis is picking up speed, and many of the “experts” seem absolutely stunned by what is happening.

But most of my readers are not surprised.  That is because I have been breaking down the signs that have been warning us of this new crisis in excruciating detail for months.  The financial carnage that we have witnessed around the globe this week is simply a logical progression of what has already been happening.

To be honest, though, even I have been stunned by what has happened in China this week.  I can’t say that I expected an emergency shutdown of the Chinese markets two times within the first four trading days of the year.
Panic and fear are beginning to grip the global marketplace, and once that starts to happen events become very difficult to predict.

Let us hope that things settle down soon, but I wouldn’t count on it.

As I have said before, 2016 is the year when everything changes, and we are going to see things take place over the next 12 months that are going to shock the world.

    

Stock Markets All Over The World Crash As We Begin 2016 - Michael Snyder THE ECONOMIC COLLAPSE

Stock Markets All Over The World Crash As We Begin 2016

Posted: 04 Jan 2016  

Michael Snyder  

THE ECONOMIC COLLAPSE blog

The first trading day of 2016 was full of chaos and panic.  It started in Asia where the Nikkei was down 582 points, Hong Kong was down 587 points, and Chinese markets experienced an emergency shutdown after the CSI 300 tumbled 7 percent.

When European markets opened, the nightmare continued.  The DAX was down 459 points, and European stocks overall had their worst start to a year ever.  In the U.S., it looked like we were on course for a truly historic day as well.  The Dow Jones Industrial Average was down 467 points at one stage, but some very mysterious late day buying activity helped trim the loss to just 276 points at the close of the market.

The sudden market turmoil caught many by surprise, but it shouldn’t have.  The truth is that a whole host of leading indicators have been telling us that this is exactly what should be happening.  The global financial crisis that began in 2015 is now accelerating, and my regular readers already know precisely what is coming next.

The financial turmoil of the last 24 hours is making headlines all over the globe.  It began last night in China.  Very bad manufacturing data and another troubling devaluation of the yuan sent Chinese stocks tumbling to a degree that we have not seen since last August. 

In fact, the carnage would have probably been far, far worse if not for a new “circuit breaker” that China recently implemented.  Once the CSI 300 was down 7 percent, trading was completely shut down for the rest of the day.  The following comes from USA Today…

Under a new market “circuit breaker” rule in China established last year, which is designed to slow down markets and halt panic in the event of moves of 5% or more, the CSI 300, a large-company stock index in mainland China was halted for 15 minutes in mid-afternoon trading after diving more than 5%. But when shares headed lower once again just minutes after the initial trading halt, and losses for the day swelled to more than 7%, the new circuit breaker rules kicked in, prompting a shutdown of mainland China’s stock market for the day, according to Bloomberg.

After the first 15 minute halt, panic set in as Chinese traders rushed to get out of their trades before the 7 percent circuit breaker kicked in.  This resulted in an absolutely chaotic seven minutes as investors made a mad dash for the exits…

The sell orders piled up fast on Monday at Shenwan Hongyuan Group, China’s fifth-biggest brokerage by market value.
China’s CSI 300 Index had just tumbled 5 percent, triggering a 15-minute trading halt, and stock investors were scrambling to exit before getting locked in by a full-day suspension set to take effect at 7 percent. When the first halt was lifted, the market reaction was swift: it took just seven minutes for losses to reach the limit as volumes surged to their highs of the day.
“Investors rushed to the door during the level-one stage of the circuit breaker as they fretted the market would go down further,” said William Wong, the head of sales trading at Shenwan Hongyuan in Hong Kong.

The financial carnage continued once the European markets opened.  Markets were red all across the continent, and things were particularly bad in Germany.  The DAX was down 459 points, and it is rapidly approaching the psychologically-important 10,000 barrier.  Overall, it was the worst start to a year that the European markets have ever experienced.

When U.S. markets opened, unexpectedly bad U.S. manufacturing data seemed to add fuel to the fire.  Monday morning we learned that our manufacturing sector is contracting at a pace that we haven’t seen since the last recession…

America’s manufacturing sector shrank for the second straight month in December. The industry’s key index — ISM — hit 48.2% in December, the lowest mark since June 2009. Anything below 50% is a contraction and a month ago it hit 48.6%.
The index has fallen for six straight months.
“The trend is certainly heading in a direction that would ring alarm bells,” says Sam Bullard, senior economist at Wells Fargo.

This is yet another sign that tells us that the U.S. economy has already entered the next recession. And what happens to the markets during a recession?

They go down.

In addition to the bad data that we got from the U.S. and China, there was another number that was also extremely troubling.

South Korean exports have traditionally been considered a key leading indicator for the entire global economy, and on Mondaywe learned that they were down a whopping 13.8 percent in December from a year earlier…

One of the more reliable indicators of the global economy continues to confirm fears of a worldwide slowdown.
South Korean exports — also referred to as the world’s economic canary in the coal mine — fell 13.8% in December from a year earlier.
This was a deterioration from the 4.8% decline in November, and it was much worse than the 11.7% decline expected by economists.

The “nothing is happening” crowd may not be willing to admit it yet, but the truth is that a major global economic slowdown is already happening.

And what happened to global markets today is perfectly consistent with the longer term patterns that have been emerging over the past six months or so.

In the weeks and months to come, things are going to get even worse.  There will always be days when the markets are up, but don’t let those days fool you into thinking that the crisis is over.  In the western world we are so accustomed to 48 hour news cycles, and many of us seem to be incapable of focusing on trends that develop over longer periods of time.

If I was going to put together a scenario for a global financial crisis for a textbook, what we have seen over the past six months or so would be perfect.  Things are playing out exactly how they should be, and that means big trouble for the rest of 2016.

But that doesn’t mean that we have to live in fear.  In fact, I just wrote an entire article entitled “2016: A Year For Living With No Fear“.  It is when times are at their worst that our character is put to the test.  Some will respond to what happens in 2016 with courage and strength, and others will respond with fear and panic.

As things start falling apart all around us this year, how will you respond?

The Stock Markets of the 10 Largest Global Economies Are All Crashing - Michael Snyder (The Economic Collapse Blog)

Since the peak of the market earlier this year, the Dow is down almost three times as much as that 777-point crash back in 2008. (Reuters)

The Stock Markets of the 10 Largest Global Economies Are All Crashing

9/28/2015 MICHAEL SNYDER  charisma news

You would think that the simultaneous crashing of all of the largest stock markets around the world would be very big news. But so far, mainstream media in the United States are treating it like it isn't really a big deal.

Over the last 60 days, we have witnessed the most significant global stock market decline since fall 2008, and yet most people still seem to think that this is just a temporary "bump in the road" and that the bull market will soon resume. Hopefully they are right.

When the Dow Jones Industrial Average plummeted 777 points on Sept. 29, 2008, everyone freaked out, and rightly so. But a stock market crash doesn't have to be limited to a single day. Since the peak of the market earlier this year, the Dow is down almost three times as much as that 777-point crash back in 2008.

Over the last 60 days, we have seen the eighth-largest and 10th-largest single-day stock market crash in U.S. history on a point basis. You would think that this would be enough to wake people up, but most Americans still don't seem very alarmed. And of course what has happened to U.S. stocks so far is quite mild compared to what has been going on in the rest of the world.

Right now, stock market wealth is being wiped out all over the planet, and none of the largest global economies have been exempt from this. The following is a summary of what we have seen in recent days:

1. The United States—The Dow Jones Industrial Average is down more than 2,000 points since the peak of the market. Last month we saw stocks decline by more than 500 points on consecutive trading days for the first time ever, and there has not been this much turmoil in U.S. markets since fall 2008.

2. China—The Shanghai Composite Index has plummeted nearly 40 percent since hitting a peak earlier this year. The Chinese economy is steadily slowing down, and we just learned that China's manufacturing index has hit a 78-month low.

3. Japan—The Nikkei has experienced extremely violent moves recently, and it is now down more than 3000 points from the peak that was hit earlier in 2015. The Japanese economy and the Japanese financial system are both basket cases at this point, and it isn't going to take much to push Japan into a full-blown financial collapse.

4. Germany—Almost one-fourth of the value of German stocks has already been wiped out, and this crash threatens to get much worse. The Volkswagen emissions scandal is making headlines all over the globe, and don't forget to watch for massive trouble at Germany's biggest bank.

5. The United Kingdom—British stocks are down about 16 percent from the peak of the market, and the U.K. economy is definitely on shaky ground.

6. France—French stocks have declined nearly 18 percent, and it has become exceedingly apparent that France is on the exact same path that Greece has already gone down.

7. Brazil—Brazil is the epicenter of the South American financial crisis of 2015. Stocks in Brazil have plunged more than 12,000 points since the peak, and the nation has already officially entered a new recession.

8. Italy—Watch Italy. Italian stocks are already down 15 percent. Look for the Italian economy to make very big headlines in the months ahead.

9. India—Stocks in India have now dropped close to 4,000 points, and analysts are deeply concerned about this major exporting nation as global trade continues to contract.

10. Russia—Even though the price of oil has crashed, Russia is actually doing better than almost everyone else on this list. Russian stocks have fallen by about 10 percent so far, and if the price of oil stays this low, the Russian financial system will continue to suffer.

What we are witnessing now is the continuation of a cycle of financial downturns that has happened every seven years. The following is a summary of how this cycle has played out over the past 50 years:

• It started in 1966 with a 20 percent stock market crash.
• Seven years later, the market lost another 45 percent (1973-74).
• Seven years later was the beginning of the "hard recession" (1980).
• Seven years later was the Black Monday crash of 1987.
• Seven years later was the bond market crash of 1994.
• Seven years later was 9/11 and the 2001 tech bubble collapse.
• Seven years later was the 2008 global financial collapse.
• 2015: What's next?

---

A lot of people were expecting something "big" to happen on Sept. 14, and were disappointed when nothing happened.

But the truth is that it has never been about looking at any one particular day. Over the past 60 days, we have seen extraordinary things happen all over the planet, and yet some people are not even paying attention because their preconceived notions of how events should play out did not come to pass.

And this is just the beginning. We haven't even gotten to the great derivatives crisis that is coming. All of these things are going to take time to fully unfold.

A lot of people who write about "economic collapse" talk about it like it will be some type of "event" that will happen on a day or a week and then we will recover.

Well, that is not what it's going to be like.

You need to be ready to endure a very, very long crisis. The suffering that is coming to this nation is beyond what most of us could even imagine.

Even now we are seeing early signs of it. For instance, the mayor of Los Angeles says that the growth of homelessness in his city has gotten so bad that it is now "an emergency":

On Tuesday, Los Angeles officials announced the city's homelessness problem has become an emergency, and proposed allotting $100 million to help shelter the city's massive and growing indigent population.

LA Mayor Eric Garcetti also issued a directive on Monday evening for the city to free up $13 million to help house the estimated 26,000 people who are living on the city's streets.

According to the Los Angeles Homeless Services Authority, the number of encampments and people living in vehicles has increased by 85 percent over the last two years alone.

And in recent years we have seen poverty absolutely explode all over the nation. The "bread lines" of the Great Depression have been replaced with EBT cards, and there is a possibility that a government shutdown in October could "suspend or delay food stamp payments":

A government shutdown Oct. 1 could immediately suspend or delay food stamp payments to some of the 46 million Americans who receive the food aid.

The Agriculture Department said Tuesday that it will stop providing benefits at the beginning of October if Congress does not pass legislation to keep government agencies open.

"If Congress does not act to avert a lapse in appropriations, then USDA will not have the funding necessary for SNAP benefits in October and will be forced to stop providing benefits within the first several days of October," said Catherine Cochran, a spokeswoman for USDA. "Once that occurs, families won't be able to use these benefits at grocery stores to buy the food their families need."

In the U.S. alone, there are tens of millions of people that could not survive without the help of the federal government, and more people are falling out of the middle class every single day.

Our economy is already falling apart all around us, and now another great financial crisis has begun.

When will the "nothing is happening" crowd finally wake up?

Hopefully it will be before they are sitting out on the street begging for spare change to feed their family.

Michael T. Snyder is the publisher of The Economic Collapse Blog and author of The Beginning of the End.

For a limited time, we are extending our celebration of the 40th anniversary of Charisma. As a special offer, you can get 40 issues of Charisma magazine for only $40!

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