back to article Big trouble in big China: Crashing economy in Middle Kingdom body slams US tech stocks

The Dow Jones Industrial Average shed more than 1,000 points in the first few minutes of trading on Monday, as the effects of China's economic woes spilled over onto Wall Street. China's Shanghai Composite index plummeted by 8.7 per cent – its biggest one-day drop since the global financial crisis of 2007 – sending waves into …

  1. All names Taken
    Alien

    Truth is: Ch slaves are funding Western overindulgences?

    Brits know how to do this empire creaming off of resources stuff so very well?

    1. Yet Another Anonymous coward Silver badge

      And in return gave them a government, an education system, railways, english and taught them to play cricket.

      What do they get from Apple ?

      1. bazza Silver badge

        Careful...

        It's not really a laughing matter, tempting though a Python reference is. Britain doesn't exactly have a good reputation in mainland China. The Opium Wars were a shameful part in the UK's history.

        1. PhilipN Silver badge

          Opium Wars

          Nope. They fed our addiction to tea. We fed their addiction to opium. Called free trade.

          And how dare they - a creaking, 5,000-year old civilisation - refuse to embrace materialistic Western-style war-mongering capitalism and Christianity. Fools!

        2. LucreLout Silver badge

          Re: Careful...

          The Opium Wars were a shameful part in the UK's history.

          Indeed, as was the quashing of the boxer rebellion, and a great many other less savoury events. No country is without its skeletons, but I think glossing over or hiding away from these past events denies us the best opportunity to learn from them.

      2. PNGuinn
        Trollface

        What do they get from apple? @YAAC

        Maggots??

        Que downvotes in 1-2-3

        1. Robert Helpmann?? Silver badge
          Joke

          Re: What do they get from apple? @YAAC

          Jobs?

          Sorry, couldn't resist.

          1. This post has been deleted by its author

      3. Pete 48

        they get...

        SHINY!

    2. Michael Wojcik Silver badge

      Brits know how to do this empire creaming off of resources stuff so very well?

      No they don't. Malaya and Singapore were profitable; India and China were not, despite (or because of) enormous projects to remake the economies of both places, at great human cost. Elsewhere in Asia and in Africa things didn't turn out so terribly well either. (There's a reason Britain kept declining James Brookes' offer to make Sarawak a Crown Colony - they'd finally learned their lesson.) Britain's North American adventures were a wash.

      Australia turned out all right, as long as you weren't native, but I don't know that Britain made much money off it.

      Ultimately, British Malaya was the standout profit center for the British empire (all that tin). Singapore (which was basically uninhabited when Raffles got there) turned out to be a sweet spot for trade, but it wasn't established on the standard colonial model.

  2. Nate Amsden Silver badge

    burn baby burn

    Bring on that tech crash. Long overdue. (Not invested in anything myself )

    1. Destroy All Monsters Silver badge

      Re: burn baby burn

      > Not invested in anything myself

      I am not sure whether you are aware that the economy now basically consists of people arranged in a circle gripping each other's overly leveraged balls.

      Once somebody squezzes, it's gonna be fun.

      1. Immenseness
        Flame

        Re: burn baby burn

        Upvote for the best description ever of the interaction of modern economies!

        What really bugs me though is that the super slick traders dumping the stock are effectively making the prices fall, and then they will buy it all back again at the bottom of the slump, bringing prices back up again and making a fortune in the process, for them and all the other bloodsuckers hanging onto their coat tails, who buy and sell in smaller amounts, but amounts much larger than anything any of us could afford of course, while the people running our pension funds try and second guess the well planned "crash" and whether to hold on or sell in order to not lose too much of our bloody penison pots to said bloodsuckers.

        When it is all over, the world for normal people who trade in *actual* things and services, will, as usual, be much the same place as it was before, but their future pensions will be smaller, their savings if they have any will be worth a bit less, and the the rich guys will be even richer as the money once again moves from poor to rich. Marvellous.

        1. Michael Wojcik Silver badge

          Re: burn baby burn

          the super slick traders dumping the stock are effectively making the prices fall, and then they will buy it all back again at the bottom of the slump, bringing prices back up again and making a fortune in the process

          That's hardly "super slick". I'd go with "obvious", perhaps. Your description doesn't even reach the level of basic hedging.

          the world for normal people who trade in *actual* things and services

          That world, as you know it, owes its existence to capitalism, and in particular financial markets. We would not have had an Industrial Revolution without an assortment of financial products made available through a liberal (in the economic sense) market. Feudal and mercantile economics would have kept "Western" (European and European-derived) civilizations progressing but at a very slow rate. Things might have been a bit better in Asia, and the sub-Saharan African civilizations would eventually have rebounded too, but on the whole we'd still have a largely agrarian economy where the vast majority of the population had very low purchasing power and little opportunity to do anything in their lives beyond subsistence labor and local entertainments.

          I'm no unalloyed fan of capitalism, particularly unrestrained; and it's clear that it led to both the Enlightenment's good side and its very bad side (European imperialism, institutional slavery, wage slavery, cultural destruction, some particularly horrendous wars, etc). But there was no prelapsarian condition of peaceful and pleasant existence for all. On the whole standards of living are up tremendously since the rise of capitalism, and financial markets - abuses and all - are an inextricable part of that.

  3. Fazal Majid

    Tech companies are in trouble in China anyway

    The Snowden revelations have led to a backlash against Western firms deemed, fairly or not, to be collaborating with the NSA's espionage dragnet.

  4. Stu 18

    whoopeeee

    Though I'm sure it is all very serious for people that enjoy wearing nice suits and sitting in the corner office, to me it is like a roller coaster at a fun park.

    (since I'm not invested) - well apart from retirement thingies handled by third party so I have no idea or care - in fact super an seems a bit like taxes - they may bring about good or not, you won't know till your too old to do anything about it...

    Anyway, of course all those companies are worth a fraction of what they were 30 mins ago. In the time that half the staff have read the paper and had a coffee, the fundamentals have clearly changed. I think they should make the market trading even faster - faster than light with those fancy new laser techniques. Then they truly might disappear up their own black hole, and we'd be all richer for it!

    1. Semaj

      Re: whoopeeee

      "retirement thingies"

      If that is truly your situation then you should really invest some time in talking to a financial adviser. Pensions are very important unless you plan on taking a trip to dignitas when you reach 60 and you have a right to know exactly what you are paying into, how much is in it and if it sucks, to transfer somewhere better. Leaving it until you are too old to fix any problems is insane.

      1. Michael Wojcik Silver badge

        Re: whoopeeee

        you should really invest some time in talking to a financial adviser

        Often entirely unnecessary. If you have a sufficiently broad portfolio in your retirement account, and a balance appropriate to the amount of time you are likely to continue contributing to it, and you contribute and leave it alone, a financial adviser can't tell you anything worth hearing (at least about your retirement account).

        In the medium-to-long-term, you'll either rise with the market or everyone will fall, and your purchasing power will remain in the same relative position. In the US, that means you'll be better off than most, because an outrageously high proportion of US workers have little or no retirement savings.

        And, unless you're close to retirement, a market correction is good, since it lets your funds acquire equities cheaply, which can then rise in value. Buy low and all that. Corrections are bad for day traders and other types who are exposed to short-term fluctuations. The key with a retirement account is to insulate yourself from them.

  5. A Non e-mouse Silver badge
    FAIL

    Rule 48

    Still not sure what this mythical Rule 48 is all about...

    1. Ole Juul Silver badge

      Re: Rule 48

      It's about letting the big guys sneak away with minor losses, leaving the suckers to get hosed.

    2. Sorry that handle is already taken. Silver badge

      Re: Rule 48

      I was going to write some nonsense about the "rules of the internet", but it turns out the internet can't agree on what rule 48 is.

    3. Pascal Monett Silver badge

      Re: Rule 48

      If you followed the link in the article, you would read a good one :

      "Rule 48 speeds up the opening by suspending the requirement that stock prices be announced at the market open"

      In other words, to prevent disaster, they let things go faster.

      This is the world where removing safeguards is considered a viable solution.

      #Deity help us all.

  6. Anonymous Coward
    Anonymous Coward

    stocks != economy

    The stock market always overreacts quite spectacularly. Let's wait a couple of weeks before seeing if the World is actually ending...

    1. JeffyPoooh Silver badge
      Pint

      Re: stocks != economy

      Agreed. (You can't spelled 'agreed' without 'greed'.) Anyway...

      I believe that it's been clearly proven that the markets are mostly rational/efficient as expected, but are partially irrational/bonkers.

  7. Hud Dunlap
    Gimp

    You missed this about Cook.

    The SEC might want to talk to him.

    http://www.marketwatch.com/story/apple-ceo-tim-cook-may-have-violated-sec-rules-with-jim-cramer-email-2015-08-24

  8. Mark 85 Silver badge

    Well.. there goes the 401k...

    Crap.. so close to full retirement and yet so far away....

    1. Graham Marsden

      Re: Well.. there goes the 401k...

      If your pension plan doesn't move into defensive (ie low volatity) areas around 5 years before you're due to retire you either made a bad choice or got bad advice.

      1. LucreLout Silver badge

        Re: Well.. there goes the 401k...

        @Graham

        Generally agree with that, however there is a third reason.

        It may be you have more than enough put away to get by on the dividends and state pension or other income, in which case leaving the money invested in stocks (part or all) can produce decent long term gains while leaving a pot to pass to decendants.

        The FTSE yields about 3.5%ish, so a £1M pot would knock out up to about £35k, which is possibly more than the person requires - especially if their spouse also has pension provision. Staying in stocks may make sense (you pays your money you takes your choice).

        1. Graham Marsden

          Re: Well.. there goes the 401k...

          > It may be you have more than enough put away to get by on the dividends and state pension or other income,

          In which case you've probably got other pension provision than a basic 401k. Most people won't.

          1. Michael Wojcik Silver badge

            Re: Well.. there goes the 401k...

            In which case you've probably got other pension provision than a basic 401k. Most people won't.

            If you amend your original note to say "retirement savings" rather than "pension" specifically (and, at least in the US, a 401(k) or other contribution-based retirement account isn't a "pension" anyway), then your original observation remains true. Someone who has other, lower-volatility savings has by definition moved their retirement savings as a whole away from excessive exposure to short-term volatility.

  9. PJF

    THE best "B"movie eva

    See title..

    That is all.

    Thanx, Neil McAllister!!!

    (need to re-visit BTinLC)

  10. Anonymous Coward
    Anonymous Coward

    Dunno. I guess the same as they get from Dell, Microsoft, HP et al. But of course morally you only use things that are made in the USA, probably from narwhal pubes.

  11. msknight Silver badge

    So...

    In one of the rare cases that Apple comments, it now finds itself in the position of having to decline to comment on its comment.

    *slaps forehead*

  12. Bota

    It always makes me laugh when people say...

    The FTSE/mutual funds etc would net you 3.5% a year. What's real inflation? 10% lets say, if you're indicators take into account food, fuel + anything relevant for life. Currency != money, and having a private central bank running the world it means that no country can ever get out of debt (having to pay those who print the currency interest). It's a simple scam, but a good one. It's like people who say " I bought my house x number of years ago and now it's worth x", no dear friend, you need to take inflation into account (printing currency - expanding the currency supply). What is " real money"? I'll stick to gold, silver and agro land thanks. I can eat what i grow and the gold will always retain x amount of worth, way more than trying to buy into the fuct banking system. Bail ins anyone?

    1. Michael Wojcik Silver badge

      Re: It always makes me laugh when people say...

      Ah, stories like this always bring out the sophomores, don't they?

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