The Financial Meltdown - Day Four - 08/26/2015

The Dow is up again, people will be feeling optimistic again. Here are the headlines of the day.

For a bit more realism on this we need to listen to Gerald Celente, Jim Sinclair and others.

The Dow leaps 619 points after two days of China woes

It was a long day of erratic trading in US markets today, with a rapid liftoff just after the bell and a close that marked biggest single-day gains in the Dow Jones Industrial Average and the S&P 500 since 2011.

Federal Reserve policymaker William Dudley walked back hints that an interest rate hike was imminent, calling the increase a safer bet for October than September, as previously indicated by Janet Yellen.

Still no respite from the falloff in Shanghai: that market closed down 1.3% today, making it the fifth consecutive session down for the Shanghai Composite. Chinese police also arrested two traders today on charges of insider trading and faking documents.

The Dow, the S&P 500 and the Nasdaq all close up
The Dow Jones Industrial Average is up more than 500 points
Fed’s Dudley says US rate hike unlikely in September
ECB might act to fight deflation
Shanghai stock market closed down 1.3%
Chinese police make arrests

This appeared today in King World News

Gerald Celente Just Warned This Is Not A Correction, It’s The Beginning Of A Total Market Meltdown And Global Collapse

Across the western world, financial fingers are pointing to China as the culprit for both sparking the global equity-market meltdown — and keeping it going

The first shot across the Dow — when it was trading some 2,000 points above Tuesday’s close — was blamed on the People’s Bank of China for cheapening its currency: “China risks clash with US as 1.9 percent devaluation surprises markets,” Financial Times, 12 August 2015.

U.S. Markets Trending Down Since Late July

Omitted from the headline blame game in FT and other business-news coverage was that US equity markets had been trending down since late July. Yet, as the global stock plunge accelerated over the next few weeks, and with the yuan devaluation story fading from the news, the business media blamed the selloff on China’s economic woes and how its slowing economy was impacting the global economy.

In fact, even Republican presidential front runner Donald Trump weighed in by warning that “China’s taking our jobs; they’re taking our money… they’ll bring us down… we have nobody that has a clue.”

Trump is wrong.

China is merely the canary in the collapsing global-equity mine.

Everything Is Collapsing Because The World Economy Is Imploding

Markets are tanking, currencies are collapsing and commodity prices, now at 16-year lows, are plummeting because the world is sinking deep into recession.

I Predicted A Global Stock Market Crash By Year End On King World News

And, not only do we have a “clue” regarding why markets are tanking, on 6 August, in our Trends in the News broadcast, before the market meltdown began, I forecast that global equity markets would crash by year’s end on King World News. And some two weeks before China devalued its currency, we predicted that action.

As we have noted, the formula is simple: When the US and Europe buy fewer consumer goods, China manufactures less of them. And the less China manufactures, the fewer raw materials and agriculture goods it imports from resource-rich nations. As resource-rich nations export fewer raw materials, their economies dramatically weaken, their currencies sink lower, inflation rises, unemployment rapidly grows… and out-of-work, cash-poor consumers consume less.

Indeed, it is not China’s economic woes or its currency devaluation that’s bringing down the markets.

As the famous slogan that was a centerpiece strategy in Bill Clinton’s 1992 race for the White House clearly summed up, “It’s the economy, stupid.”

And this time “it’s the global economy, stupid.”

This Is Much More Than A Correction, It’s A Global Market Meltdown

As we had forecast since Washington’s “too big to fail” bailout schemes, global central banks’ low interest-rate policies and massive quantitative-easing liquidity injections, these measures would merely relieve the symptoms of the Panic of ’08. They were not, however, the cure.

Now, that multi-trillion-dollar money-pumping bubble, which overinflated equity markets, is quickly deflating, so, too, are the economies and commodities pumped up with it. 

This is more than a market correction; it’s a global market meltdown. 

Here is Celente's wonderful rant on 'Black Monday'

Gerald Celente - Trends In The News - "Another Day, Another Diving Market" 

If you can filter out Jones this is actually quite a good discussion of the events from Tuesday

Here Charles Hugh Smith appears with Max and Stacy

Charles High Smith on the Keiser Report

Here is some more discussion - from Andy Hoffman (whom I don't know) and Jim Sinclair

BLACK MONDAY & THE FINAL BULLET: The FED Will HYPERINFLATE -- Andy Hoffman

Jim Sinclair-Silver Will Be Gold On Steroids In Coming Rally

While it is clear that China is not the cause, but the canary in the mine, here is some discussion from Paul Mason of Channel Four News

China stock market: Paul Mason explains