Fragile Global Economy Is Starting to Crack Up

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


I woke up a little late this morning, but maybe that turned out to be a good thing. The Dow Jones plunged a thousand points within minutes of opening, but by the time I saw the news it had already recouped about half of that loss:

You can probably guess what triggered this:

The stock drop was fueled by what China’s state media is already calling “Black Monday,” in which markets there recorded their biggest one-day plunge in eight years amid growing fears over an economic slowdown.

On Friday, China reported its worst manufacturing results since the global financial crisis, a new sign of woe for the world’s second-largest economy, which surprised investors earlier this month by announcing it would devalue its currency. China’s benchmark Shanghai Composite index has fallen by nearly 40 percent since June, after soaring more than 140 percent last year.

Markets around the world are crashing, and as usual that means seeking safety in the good old US of A:

Investors stampeded into relatively safe assets such as U.S. government bonds, the Swiss franc and the yen. The yield on the 10-year Treasury note dropped below 2% during Asian trading and recently was 1.976%, the lowest level since April.

….“A lot of markets abroad have seen a low amount of liquidity so investors are turning to the U.S. market to hedge,” said Jeffrey Yu, head of single-stock derivatives trading at UBS AG….While the selloff began as an emerging markets story, with China’s stock market offering very little liquidity to investors due in part to technical stock-trading halts, investors have had to turn to the most liquid market to sell, which is the U.S., Mr. Yu said.

Now can we finally get a statement from the Fed saying that they no longer have any immediate plans to raise interest rates? Please?

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate