Written by The Washington Post is calling it a “New day of carnage” as US markets open with the Dow Jones Industrial Average (DJIA) dropping more than 1,000 points, along with many other stocks and commodities in markets around the world. “Black Monday” is trending on twitter, referencing the phenomenon. It is the largest global sell off since the financial crisis of 2008.
You might recall that incident, when George W. Bush said he had “abandoned free market principles to save the free market system,” don’t you? Lotta good that did. That catastrophe was followed by a two term Obama presidency, the Orwellian named “Affordable Care Act” (Obamacare), staggering increases in taxes, regulatory burdens, and government debt. The Federal Reserve has held interest rates at or near zero, despite a startling lack of savings by Americans.
And then the market crashed anyway.
Alexis Tsipras, the Greek Prime Minister, has resigned and called for snap elections – which he is expected to win – in the wake of abandoning his campaign promises and accepting a third round of European bailouts in exchange for austerity measures he campaigned against. Further adding to political and economic uncertainty in Europe.
In China, following a massive drop in stocks which occurred in late June, the Chinese central bank responded with a rate cut. That didn’t stop their markets from dropping another 7 percent shortly after. The Chinese government responded with a series of measures aimed at propping up the stock market, like further rate cuts, government backed stock purchases, and halting the sales of some shares. That didn’t prevent their steepest one day drop in 8 years on July 27th. The Chinese government did everything they could imagine to prop up the market.
And then the market crashed anyway, this time taking markets around the globe with it.
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