IMO
Today's market collapse is history repeating itself from Oct. 1987. Financial Firms have been just looking for an excuse to drop the indexes, and have been setting this "China market decline" senario up since last October, hyping it up in news reports since early February. (A LOT of US investment dollars have been flowing into China's market the past year, and this will certainly stem the flow benefiting US firms!) The fact is, only China's Shanghai "A" list stocks (owned only by the Chinese nationals) were 50% over priced and of concern to their government. The Shanghai "B" list securities, which are traded here and through mutual funds, were far less succeptible to any major declines. I noticed about mid day when the decline in US markets began to subside, other BS fears began flying out of the Financials about major recession, housing failures, consumer gloom and doom... which frightened the rest of the nervous nellies out of the market in later trading. The mysterious "computer glitch" which caused the sudden 100+ point drop mid-afternoon in the Dow of course was an accident as well. (Hope the SEC looks closely into that one in particular.)
Stops got cleared today and margin calls will be settling the rest of the week. Special interests will be back stuffing their pockets with thrown away shares Thursday and Friday taking the markets back up on thinner volume, just like '87. Bond prices moved higher today with money shifting out of the markets and into treasuries, ergo interest rates are coming down because of this scare tactic. Good news for the housing sector and the consumer. Fed will be lowering rates later this year as a result. Who says the government has no economic policy plan? Just my opinion of course!
AI
