Wednesday, July 8, 2015
It's 1929 all over again on China's stock exchanges
As a reminder, on Wall Street the Dow Jones Industrial Average peaked at 381.17 on September 3rd, 1929. After the crash, on November 13th, 1929 it sank as low as 198.60 - a loss of 182.57 points, or 47.9%, in 40 days.
On June 12th this year, the Shanghai Composite Index stood at 5,166. Today it stood at 3,507.19 at the close. That's a loss of 1658.81 points, or 32.11%, in just 26 days, averaging 63.8 points per day. If losses continue at that rate, by the time 40 days have passed they'll total 2,552 points, or a loss of 49.4% since the start of the crash.
Forget all those trying to tell you that the Chinese stock market crash is nothing much to worry about. This is 1929 all over again, right now. It's a disaster for China. Anyone who thinks this won't impact markets and economies all around the world is living in cloud cuckoo land - even without taking into account the current crisis over Greece and the European Union, or the massive debt problems affecting every major economy in the world, including the USA.