Critical Observer

FEDERAL RESERVE KEEPS INTEREST RATE AT 0%

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The Federal Reserve is keeping U.S. interest rates at record lows in the face of threats from a weak global economy, persistently low inflation and unstable financial markets. 
 
Ending a highly anticipated meeting, Fed officials said Thursday that while the U.S. job market is solid, global pressures may "restrain economic activity" and further drag down already low inflation. 
 
Signs of a sharp slowdown in China have intensified fear among investors about the U.S. and global economy. And low oil prices and a high-priced dollar have kept inflation undesirably low. 
 
Before year's end, many analysts still expect the Fed to raise its key short-term rate, which it's kept near zero since 2008. A higher Fed rate would eventually send rates up on many consumer and business loans. 
 
"All this really does is punt," said Scott Clemons, chief investment strategist for Brown Brothers Harriman's private banking business. 
 
Clemons said he expects the Fed to raise rates before the end of the year, especially if concern in the financial markets about China's economic prospects eases. 
 
"The Fed is paying attention to what is going on abroad," he said. "That's all code for China." 
 
Stock prices barely moved after the Fed's decision was announced at 2 p.m. Eastern time. But bond prices rose, and yields fell. 
 
Financial markets had been zigzagging with anxiety as investors tried to divine whether the Fed would start phasing out the period of extraordinarily low borrowing rates it launched at a time of crisis. 
 
The Fed's action Thursday was approved on a 9-1 vote, with Jeffrey Lacker casting the first dissenting vote this year. Lacker, president of the Fed's Atlanta regional bank, had pushed for the Fed to begin raising rates by moving the federal funds rate up by a quarter-point. 
 
Instead, the Fed retained language it has been using that it will be appropriate to raise interest rates when it sees "some further improvement in the labor market" and is "reasonably confident" that inflation will move back to the Fed's optimal inflation target of 2 percent. 
 
The Fed's preferred measure of inflation was up just 1.2 percent in the latest reading and has been below 2 percent for more than three years. 
 
In an updated economic forecast, 13 of the 17 Fed policymakers said they see the first rate hike occurring this year. In June, 15 Fed officials predicted that the first rate hike would occur this year. The forecast also reduced the number of rate hikes this year to show an expectation of just one quarter-point increase, rather than two that had been the expectation at the June meeting. 
 
The new forecast significantly lowered the expectation for inflation this year to show the Fed's preferred inflation gauge rising just 0.4 percent, down from a 0.7 percent forecast in June. The change takes into account the further rise in the value of the dollar, which makes imports cheaper, and a recent drop in oil prices. The Fed's forecast still foresees inflation accelerating to a 1.7 percent increase next year, still below its 2 percent target. 
 
The new forecast has unemployment dropping to 5 percent by the end of this year, down from 5.3 percent in June. The unemployment rate in August dropped to a seven-year low of 5.1 percent. 
 
Before Thursday's decision, some economists argued that many factors - from a sharply slowing China to the tumult in markets to persistently less-than-optimal inflation - raised concerns about a rate hike. Others contended that with the U.S. job market considered essentially recovered from the Great Recession, it was time to start edging toward normal rates. 
 
The anxiety that gripped investors stemmed in part from concern that once the Fed starts raising its key rate, other rates - for mortgages, car loans, business borrowing - will eventually rise. Some fear the economy might suffer. 
 
Yet the Fed's influence on many consumer and business rates is only indirect. In the short run at least, those rates could continue to stay low, held down by low inflation globally and by a flow of money into U.S Treasurys. 
 
Fed officials have stressed that once the central bank starts raising rates, the process will be extremely gradual. The Fed might pause for months after its first hike and assess the consequences before proceeding further. Still, economists generally say the effects of a series of small rate hikes will be negligible. 
 
Until turmoil struck markets this summer, a September rate hike seemed a lock. Then, China's surprise decision to devalue its currency ignited fears that the world's second-largest economy was weakening faster than assumed. Stocks tumbled. 
 
At an economic conference last month in Jackson Hole, Wyoming, Fed officials sent mixed signals about this week's meeting. Some indicated they were ready to raise rates if markets had settled and if the economy kept improving. 
 
In July, when Yellen delivered an economic report to Congress, she reiterated that the Fed would likely raise rates before year's end. But she wasn't specific.

FEDERAL RESERVE KEEPS INTEREST RATE AT 0%

The Federal Reserve is keeping U.S. interest rates at record lows in the face of threats from a weak global economy, persistently low inf...

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WALL STREET PANICS OVER GLOBAL RECESSION FEARS

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Wall Street plunged Tuesday after investors feared weak data from China, the world’s second-largest economy, would lead to a global recession. 
 
China’s manufacturing sector suffered its quickest deterioration in over six years, leading to a three-year market low and other sectors of the Chinese economy also slowed down significantly. 
 
In response, all three major U.S. stock indices, the Dow Jones, the S&P 500 and NASDAQ, were down two percent in early trading. 
 
“While a measure of calm has returned to these markets recently and they have seen relief rallies, many of the underlying negative fundamentals are still in place,” said Nariman Behravesh, chief economist for IHS. “As a result, the downside risks for most commodity prices, exchange rates, and stock markets are likely to persist for some time, while growth in many parts of the world, especially in emerging markets, is likely to deteriorate further.” 
 
Investors panicked once China’s official manufacturing Purchasing Managers’ Index (PMI) dropped to 49.7. 
 
“The PMI was below 50, which is a psychologically important level and puts into real focus the fact that China is contracting,” said Joe Rundle, a senior sales trader at ETX Capital. “With the weak data coming out, we’re going to see the negative sentiment from the last few weeks continuing.” 
 
This pessimistic outlook may become self-fulfilling. 
 
In fact, Canada has already fell into a recession after its economy retreated 0.5% in the second quarter and 0.8% in the first. 
 
“Canada’s manufacturing sector continues to face growth headwinds from heightened global economic uncertainty and sharp falls in energy sector capex plans,” said Cheryl Paradowski, president and chief executive officer of SCMA. 
 
Collapsing oil prices have also hurt Canada, which is the world’s fifth-largest oil producer. 
 
The decaying conditions in Canada and China could trigger a global recession. 
 
by KIT DANIELS | INFOWARS.COM

WALL STREET PANICS OVER GLOBAL RECESSION FEARS

Wall Street plunged Tuesday after investors feared weak data from China, the world’s second-largest economy, would lead to a global reces...

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MARKET COLLAPSE: CENTRAL BANKS CAN’T STOP IT

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Like children clinging to their parents, stock market traders turned to their central banks last week as they sought protection from the frightening economic figures coming out of China. Surely, they asked, the central banks would ward off the approaching bogeymen, as they had so many times since the 2008 crash. 
 
The US Federal Reserve came up with the goods. William Dudley, president of the bank’s New York branch, hinted that the interest rate rise many had expected next month was likely to be delayed. 
 
A signal that borrowing costs would remain at rock bottom was all it took. After Black Monday and Wobbly Tuesday, the markets recovered to regain almost all their recent losses. 
 
It was just as if they had said to themselves: who cares if China’s economy is slowing; the “Greenspan put”, which so famously propped up US stock markets during the 1990s and early 2000s with one interest rate cut after another, is still in operation. 
 
The meeting of the world’s most important central bankers in Jackson Hole, Wyoming, this weekend only confirmed the need for Britain, Japan, the eurozone and the US to keep monetary policy loose. 
 
Yet the palliative offered by the Fed is akin to a parent soothing fears with another round of ice-creams despite expanding waistlines and warnings from the dentist and the doctor. 
 
According to some City analysts, the stock markets are pumped with so much cheap credit that a crash is just around the corner. And they worry that when that crash comes, the central banks are all out of moves to prevent the aftershocks from causing a broader collapse. 
 
Since 2008 the Fed has pumped around $4.5 trillion into the financial system. The Bank of England stopped at £375bn. The Bank of Japan is still adding to its post-crash stimulus with around $700bn a year and the Frankfurt-based European Central Bank will have matched its cousin in Tokyo by the end of the year. 
 
In each case, the central bank has adopted quantitative easing, which involves buying government debt to drive up its price. A higher price lowers the returns and encourages investors to go elsewhere in search of gains. It has meant a big shift in the portfolios of fund managers in favour of shares. Apart from a few blips due to the Greek crisis, stock markets have boomed. This summer, the FTSE 100 soared past 2008 levels to top its 1999 peak. 
 
But China, which has borrowed heavily to keep its economy moving, is running out of steam. Beijing has said it does not want to encourage another borrowing boom. But to prevent a crash, it is doing just that. In the last two weeks it has cut interest rates and loosened borrowing limits. It has even invested directly in the market, buying the shares of smaller companies. 
 
So we face the shocking prospect of central bankers, in thrall to stock market gyrations, making the world a more unstable place with promises of yet more cheap credit. 
 
There are a few alternative courses of action that Bank of England governor Mark Carney could still propose. He could tell politicians that the only sustainable way to get their economies moving is with hard cash from taxed wealth and incomes. If that is too unpalatable, governments should borrow directly to fund public infrastructure and productivity improvements. 
 
And if the government is too embarrassed to admit to voters that it needs to borrow money, then the least central banks can do is sign deals with high street banks to lend, rather than hoping they will take QE funds and do something useful with them. Because the evidence is already there for all to see that investors would prefer to pump the money into the stock market and property, both of them inherently unstable and prone to violent crashes. 
 
Google feels the EU heat 
‘We have owned the internet,” Barack Obama crowed in a video interview this February. “Our companies have created it, expanded it, perfected it.” But from tax to privacy and now a string of antitrust investigations, one of those companies, Google, is under attack on multiple fronts in Europe. 
 
The US president argued that what has been presented as high-minded intervention by regulators is in fact a commercially driven bid to protect old-world technology companies from the Silicon Valley invaders. 
 
Europe’s most powerful regulator, the Brussels competition policy chief Margrethe Vestager, has taken aim at Google Shopping, its price-comparison service. In April, she launched a legal process that could result in a big fine. On Thursday, the search giant filed a 150-page rebuttal. 
 
First of all, Google says it has not choked off traffic to rival shopping price sites – the traffic it sends to these kinds of sites has increased by 227% over a decade (its own data shows). Sounds like a big number. Until you look at the growth in Google’s own traffic over that period. The number of searches worldwide now stands at somewhere near 1.2 trillion a year – an increase of 750% in a decade. 
 
Google also wants its shopping service considered as part of a much larger group that includes actual retailers, like Amazon, and marketplaces, like eBay, where people also go to compare prices. Perhaps, but these are very different businesses. The capital needed to launch an online retailer, let alone one with a global presence and a one-day delivery guarantee, is much larger than the funding required for a price-comparison startup. 
 
Google’s strongest point is that forcing a company to offer its services to rivals is a drastic measure normally reserved for monopoly utilities. Google is very useful, but it is not water or electricity. Google Shopping is a very niche service. 
 
The argument about fair price comparison is a sideshow given the much bigger worries about privacy, security and tax that currently dog the digital world. But a victory for regulators here could lead to more assaults – on Google’s flight-comparison service and maps. Vestager has also launched an investigation into Android, the group’s market-leading phone software. Obama may be called on to cheer the home team again before this fight is over. 
 
Two sides to the national living wage? 
George Osborne has already claimed credit for Sainsbury’s increasing the base pay of its shop floor staff by 4%. “Britain deserves a pay rise so great Sainsbury’s staff will be paid at least national living wage early with biggest increases in 10 years,” he tweeted last week. 
 
It is a indeed a credit to the chancellor that he has put pay on the agenda for Britain’s supermarkets, the country’s largest private employers, by announcing a national living wage in the budget last month. However, Sainsbury’s announcement is just one side of the coin: the other side is how it will finance the pay increase. 
 
The Office for Budget Responsibility has estimated that the chancellor’s national living wage will lead to 60,000 job losses as companies fund the higher minimum pay by cutting jobs. Moody’s, the credit rating agency, has warned retailers could close stores, increase prices and employ more under-25s – who do not qualify for the national living wage. Perks for staff, such as in-store discounts, could also be at risk. 
 
Sainsbury’s did not downgrade its profit forecasts at the same time as announcing the pay increase, so it must have found the money from somewhere – time will tell where. 
 
From: The Guardian

MARKET COLLAPSE: CENTRAL BANKS CAN’T STOP IT

Like children clinging to their parents, stock market traders turned to their central banks last week as they sought protection from the ...

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Bitcoin Technology Piques Interest on Wall St.

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Most people still think of Bitcoin as the virtual currency used by drug dealers and shadowy hackers looking to evade the authorities. 
 
But the innovations that helped turn Bitcoin into the most popular virtual currency are now being viewed as a potentially enormous disruptive force for several industries, including accounting, music and journalism. 
 
Nowhere, though, are more money and resources being spent on the technology than on Wall Street — the very industry that Bitcoin was created to circumvent. 
 
“There is so much pull and interest on this right now,” said Derek White, the chief digital officer at Barclays, the British global bank, which has a team of employees working on about 20 experiments that explore how the technology underlying Bitcoin might change finance. “That comes from a recognition that, ‘Wow, we can use this to change the fundamental model of how we operate to create our future.’” 
 
For people like Mr. White, Bitcoin isn’t just a digital token to use for online purchases. Instead, many of the top minds in finance have come to believe that the software that brought the virtual currency into existence also enables a fundamentally new way of transacting and maintaining records online — allowing people and banks to directly exchange money and assets like stocks and bonds without having to rely on a long chain of expensive middlemen. 
 
A few banks have gone public with their work, but most of the activity has been happening behind the scenes. At one private meeting, held in April at one of the Manhattan offices of Bank of America, executives from more than a dozen large banks gathered to confidentially discuss how the technology underlying Bitcoin could be used to change foreign currency trading, the largest financial market in the world, according to people who attended the meeting. 
 
Central banks like the Federal Reserve and the Bank of England have their own teams looking at the technology. 
 
“A year ago, it was more of an idea,” said Max Neukirchen, the head of corporate strategy at JPMorgan Chase. “Now, it is a real opportunity. You test it and realize that this can play a big role in our thinking about how our own infrastructure will evolve.” 
 
This is a long way from the derision that many bankers — including JPMorgan’s chief executive, Jamie Dimon — expressed when Bitcoin burst into the public consciousness in 2013, when the price of a Bitcoin was bouncing around wildly in a speculative frenzy that was often compared to the Dutch tulip bulb mania. 
 
At the time, some large companies like Dell and Overstock announced that they would start taking Bitcoins for online purchases, but few consumers showed much interest in using the digital money to pay their bills, and the furor around Bitcoin largely died down. 
 
The institutions that are now becoming involved are generally not interested in selling goods for Bitcoins or owning the virtual currency. They are, instead, looking at the network and software that make it possible for Bitcoin to move around the world instantly, and almost free. 
 
Until now, digital transactions have always gone through some sort of central authority that can move the money and update the records on both sides — as PayPal and Visa do for many online purchases. 
 
The Bitcoin network, on the other hand, is run by a decentralized network of users who jointly keep track of transactions and update the records in real time, with no single user or company in charge. The records of all transactions are kept on a public ledger — essentially just a big, publicly available spreadsheet — known as the blockchain that is visible to anyone and has, at least so far, proven impossible to tamper with. 
 
Much of the work being done inside banks, and in other industries, is looking at whether the blockchain technology can be used independently of the Bitcoin virtual currency, which was the first thing to be recorded on the blockchain ledger. 
 
The music publication Billboard recently wrote about how several start-ups are aiming to use a digital ledger like the blockchain to keep track of musical downloads and distribute the royalties to artists without relying on a central record keeper. 
 
Vermont’s state government commissioned a study in June to look at how a blockchain could be used as a legal method of record keeping under state law; it is one of several governments, many of them outside the United States, looking at the technology. 
 
But the most intense work is being done by financial companies like the Nasdaq OMX Group, which has several programmers in Manhattan preparing software that the company plans to roll out this year. 
 
The Nasdaq software will allow the trading of stocks in private companies, like tech start-ups, on a new kind of blockchain. This will replace the existing system in which private companies issue and trade shares using paper certificates — a process that means that even basic trades can take weeks to complete. 
 
Beyond the immediate trial, Nasdaq is experimenting with several other markets in which blockchain-like ledgers could be used to make trading faster and cheaper. The work is being overseen by Frederik Voss, who recently shifted from his work in the company’s commodity division to become its top blockchain executive. 
 
“We believe that blockchain technology holds great promise in allowing capital markets to operate more efficiently while simultaneously providing greater transparency and security, all of which are fundamental to the public interest,” Nasdaq’s chief executive, Robert Greifeld, said in a July call with investors. 
 
Financial firms first began talking publicly about Bitcoin in late 2013. Back then, though, most of the attention was negative, focused on the speculative aspect of the virtual currency. 
 
More recently, banks like Goldman Sachs, Santander and BBVA have made their first investments in outside start-ups working on Bitcoin technology, several of which were started by former employees at big banks. 
 
But the banks have generally been less public about the work they have been doing internally with their own employees. At Citigroup, for instance, there are six different in-house experiments, building software that harnesses the blockchain technology, according to people briefed on the company’s work. In one test, the bank has created its own virtual currency, Citicoin, that employees can experiment with. 
 
Aside from Nasdaq’s project, there is much debate about where the technology is likely togain its first real world use. At Barclays, some of the 20 internal experiments — most of them conducted at two Barclays offices in London dedicated to the technology — are looking at ways to use the blockchain to speed up and lower the cost of consumer payments, to compete with credit cards and direct money transfers. 
 
But bankers generally say that most of the work is aimed at changing the systems that big Wall Street traders and investors use to buy and sell sophisticated assets like syndicated loans and corporate bonds. 
 
Because any innovation in this area would require the cooperation of multiple banks, the banks have had joint meetings to discuss how they could work together, often led by outside start-ups looking to provide the software. 
 
One of the most advanced of those conversations has been coordinated by a start-up known as R3Cev that is led by a former Wall Street executive, David E. Rutter. R3Cev has put together models for how banks could trade foreign currencies on a communally maintained spreadsheet like the blockchain, according to people briefed on the project. It was R3Cev that convened the April meeting at Bank of America, which was attended by more than 75 people from 15 financial institutions, these people said. 
 
This can seem like rather esoteric business, but these are the markets where huge amounts of money turn over each day, and these markets influence the profits of the largest financial institutions. For instance, more than $3 trillion changes hands each day on the foreign currency market. 
 
For many bankers, the question is not if the technology is put to use but when. Mr. Neukirchen, at JPMorgan, is one of many bankers who expect that it will take a few years for the first significant use of blockchain technology to gain traction. Mr. White at Barclays expects it even sooner, in the next year. 
 
The prospect of banks capitalizing on the technology can be disappointing to early Bitcoin adherents, many of whom were drawn to the technology because it provided a way to move and store money that did not rely on banks. 
 
Many in the financial industry hope they can find a way to use the blockchain concept — what is often referred to as a distributed ledger — without using the blockchain associated with Bitcoin. 
 
Although the bankers working on the idea disagree on how this will happen, they show surprisingly little disagreement on whether it will happen. One of Goldman’s top Internet analysts, Heath Terry, said in a recent company podcast that “the whole blockchain tech behind Bitcoin has massive implications for really any kind of asset — and the ability to transfer ownership of digital goods.” 
 
“It’s hard to see a world where that blockchain technology doesn’t end up changing the way we think about asset ownership,” he said. 
 
By <span class="byline-author" data-byline-name="NATHANIEL POPPER" itemprop="name" style="background-color: white; color: black; font-family: nyt-cheltenham-sh, georgia, 'times new roman', times, serif; line-height: 12px; text-decoration: none;"><a href="http://topics.nytimes.com/top/reference/timestopics/people/p/nathaniel_popper/index.html" rel="author" style="background-color: white; color: black; font-family: nyt-cheltenham-sh, georgia, 'times new roman', times, serif; line-height: 12px; text-decoration: none;" title="More Articles by NATHANIEL POPPER">NATHANIEL POPPER</a> of the New York Times

Bitcoin Technology Piques Interest on Wall St.

Most people still think of Bitcoin as the virtual currency used by drug dealers and shadowy hackers looking to evade the authorities. B...

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US stocks give up gains heading into the close

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NEW YORK (AP) — The latest on the global financial market turmoil (all times local): 3:42 p.m. U.S. stocks are giving up the gains shortly before the market close after a day in which they surged back on an interest-rate cut by China's central bank. 
 
The Dow Jones industrial average was up three points, or 0.1 percent, at 15,886. The Standard & Poor's 500 index gained one point, or 0.1 percent, to 1,895. The Nasdaq composite rose 39 points, or 0.9 percent, to 4,565. 
 
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3:04 p.m. 
The price of oil logged its biggest gain in more than two months, as it rebounded from its lowest closing level in more than six years. 
 
The price of U.S. crude rose $1.07, or 2.8 percent, to $39.31, its biggest one-day gain since June 9. Brent crude, a benchmark for international oils used by many U.S. refineries, gained 52 cents, or 1.2 percent, to $43.21. 
 
Natural gas and heating oil prices also rose, and wholesale gasoline dropped. 
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2:13 p.m. 
U.S. stocks are paring their gains, after surging in early trading on news that China had cut interest rates to shore up its economy. 
 
The Dow Jones industrial average rose 213 points, or 1.4 percent, to 16,088 as of 2: 18 p.m. Eastern time. It was up as much as 430 points earlier in the day. 
 
The Standard & Poor's 500 index is up 27 points, or 1.5 percent, at 1,920 and the Nasdaq composite index gained 105 points, or 2.3 percent. 
 
Metals have closed for the day; 
Gold fell $15.30 to $1,138.30 an ounce. Silver dropped 15.2 cents to $14.61 an ounce. Copper rose 5.5 cents to $2.31 per pound. 
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12:01 p.m. 
U.S. stocks are sharply higher in midday trading after China's central bank cut its key interest rate in a bid to boost growth in the world's second-largest economy. Concerns over a slowdown in China's economy rattled global markets on Monday. 
 
The Dow Jones industrial average was up 333 points, or 2.1 percent, at 16,204 as of 12:01 p.m. Eastern Tuesday. The Standard & Poor's 500 index rose 43 points, or 2.2 percent. The Nasdaq composite gained 141, or 3.1 percent, to 4,668. 
 
Oil also rose, but was still trading below $40 a barrel. 
 
Treasury notes fell, pushing up the yield on the 10-year benchmark note to 2.10 percent. 
 
Best Buy's stock surged 14 percent after it reported earnings that handily beat analysts' estimates. The consumer electronics chain benefited as shoppers picked up major appliances, large screen televisions and mobile phones. 
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11:14 a.m. 
The New York Stock Exchange invoked a rarely-used rule both on Monday and Tuesday to help ensure a smoother open to the stock market. "Rule 48" allows designated market-makers to forgo their obligation to circulate price indications before the opening bell. It is only used when there is the potential for extreme market volatility. 
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10:13 a.m. 
Stocks stay higher in the U.S. after a report shows that Americans stepped up their purchases of new homes in July, with sales surging in the Northeast. 
 
The Commerce Department says new-home sales rose 5.4 percent last month to a seasonally adjusted annual rate of 507,000, recovering from a slide in purchases in June. 
 
All 10 sectors in the S&P 500 index are higher, led by gains for technology stocks. 
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9:30 a.m. 
U.S. stocks jumped at the open after China's central bank cut interest rates to support its economy. 
The Dow Jones industrial average rose 296 points, or 1.9 percent, to 16,180.61, as of 9:45 a.m. 
Eastern time. The Standard & Poor's 500 index climbed 38 points, or 2 percent, to 1,932. The Nasdaq composite rose 109 points, or 2.4 percent, to 4,635. 
 
Oil prices are up, but U.S. crude is still trading below $40 a barrel. 
 
Treasury notes are falling, pushing up the yield on the 10-year benchmark not to 2.08 percent. 
 
Best Buy was the biggest gainer in the S&P 500 index. The stock surged 16.4 percent after its fiscal second-quarter results handily beat analysts' estimates as shoppers picked up major appliances, large screen televisions and mobile phones 
 
--- 
8:30 a.m. 
China's interest rate cuts will not be enough to ease concerns about the country's economy, says Kamel Mellahi, professor at Warwick Business School in Britain. 
 
"The Chinese economy is going to be on this bumpy road for a while and it will have ebbs and flows that will no doubt have a serious impact on the global economy," he says. 
 
The Chinese central bank cut its key interest rate and deposit rate on Tuesday after its main stock market plunged for a fourth day. The move boosted markets around the world. 
 
Mellahi says that while the rate cuts may buoy markets in the short-term, the underlying causes of investors' concerns — the slowdown in the Chinese economy — will last for some time. 
 
--- 
8:00 a.m. 
Wall Street futures are rallying further after China's central bank cut interest rates to support its economy. 
 
Dow futures are up 600 points, or 3.8 percent, while the broader Standard & Poor's 500 futures are up 72.8 points, or 3.9 percent. 
 
The jump follows a stomach-churning day on Monday, when the Dow plunged more than 1,000 points at one point before finishing down 588.40 points, or 3.6 percent. The Standard & Poor's 500 index slid 77.68 points, or 3.9 percent, into "correction" territory — jargon for a drop of at least 10 percent from a recent peak. The last market correction was nearly four years ago. 
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US stocks give up gains heading into the close

NEW YORK (AP) — The latest on the global financial market turmoil (all times local): 3:42 p.m. U.S. stocks are giving up the gains shortly...

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NYSE invokes Rule 48 again to smooth market open

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U.S. stock index futures pointed to a sharply higher open on Tuesday, recovering from the plunge seen in global stocks on Monday as mayhem in Chinese markets and interest rate fears dominated markets. 
 
The New York Stock Exchange invoked Rule 48 for the second day in a row, Dow Jones reported. 
 
The exchange used the rule before Monday's open after futures for several major averages hit limit down. The last time the rule was used was during the financial crisis. 
 
What is Rule 48? The goal of Rule 48 is to ensure orderly trading amid financial market turbulence. It's only used in the event that extremely high market volatility is likely to have a floor-wide impact on the ability of designated market makers (DMMs) to disseminate price indications before the bell. 
 
Unlike a circuit breaker that stops stock trading, Rule 48 speeds up the opening by suspending the requirement that stock prices be announced at the market open. Those prices have to be approved by stock market floor managers before trading actually begins. Without that approval, stock trading can begin sooner. 
 
Dow futures briefly rose more than 600 points in premarket trading, implying a more than 450-point bounce at the open and shrugging off deeper selling in China's mainland stock market. 
 
From: CNBC News

NYSE invokes Rule 48 again to smooth market open

U.S. stock index futures pointed to a sharply higher open on Tuesday, recovering from the plunge seen in global stocks on Monday as mayhe...

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ANALYST: “WE ARE NOW IN A FULL ON MARKET CRASH”

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Financial analyst Clive P. Maund asserts that we are now witnessing a “full on market crash” and that the Dow could see drops of up to a thousand points on a daily basis. 
 
The Dow Jones lost 6% last week, tumbling more than 1,000 points, the worst fall since 2008, but according to technical analyst Maund, that is only the beginning. With fringe investors only just realizing the delusion of establishment financial media claims that the collapse was just a temporary “correction,” the rush to the exit will now become a stampede. 
 
“When a market tips into a crash on a Friday, what typically happens is that the thousands or even millions of investors who believed the mainstream media and didn’t see it coming spend the weekend “stewing” over their investments – and many of them decide to bail out come Monday,” writes Maund. 
 
“Thus we may see a massive down day tomorrow, possibly the worst of the crash phase, and it would not be that surprising to see the Dow Jones Industrials drop by 800 – 1000 points in one day, perhaps even more. Remember that the Dow Jones Industrials “only” dropped 3% on Friday, which is no big deal by the standards of past crashes,” he adds. 
 
Maund predicts several days of high volume selling, noting that the market is currently in “full blown panic mode,” before a more measured decline confirms the emergence of a bear market downtrend. A self-perpetuating “Mexican wave” of losses will continue to spread globally for a few days, writes Maund. 
 
Meanwhile, this morning’s continued collapse in Asia has sent the “fear index,” which monitors volatility in S & P stocks, exploding to its highest level since 2011. 
 
Business Insider’s Henry Blodget says that stocks need to “drop of 40%-50% from the recent high” merely to “get back to historically average levels of valuation and performance.” 
 
Even as investors resort to panic selling, some sectors of the establishment financial media are still clinging on to the delusion that we’re in a bull market. 
 
CNBC is encouraging people to pour more money into the stock market, claiming that the collapse is merely a “dull year,” while Bloomberg is calling it a mere “correction”. 
 
When this kind of blind faith begins to take hold, you know the bottom is about to drop out. 
 
By Paul Joseph Watson of InfoWars.com

ANALYST: “WE ARE NOW IN A FULL ON MARKET CRASH”

Financial analyst Clive P. Maund asserts that we are now witnessing a “full on market crash” and that the Dow could see drops of up to a ...

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Dow Jones Plummets as China's Stock Market Crashes

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U.S stocks plunged Monday, with the Dow Jones Industrial Average plummeting more than 1,000 points following a global stock sell-off across European and Asian markets as fears escalated about China’s slowing economy. All three major indexes are on course for one of their worst opens since the financial crisis of 2008. 
 
The sharp U.S. stock downturn was anticipated after futures pointed to Monday mayhem. Dow futures plunged more than 800 points before the U.S. markets opened, as fears of a major Chinese economic downturn escalated across global markets. European markets extended losses in afternoon trade Monday, with the pan-European Stoxx 600 index down nearly 5 percent. Japan’s Nikkei 225 index dropped 4.6 percent to finish at its lowest closing level since February 23. China’s benchmark Shanghai Composite recorded its biggest one-day percentage loss since 2007, closing down 8.5 percent, dubbed “Black Monday” by China’s state media. 
 
The Dow Jones Industrial Average (INDEXDJX:.DJI) tumbled 1,089 points, or 6 percent, to 15,370.33. The S&P 500 index (INDEXSP:.INX) lost more than 100 points, or 5 percent, to 1,867.01. And the Nasdaq composite (INDEXNASDAQ:.IXIC) dropped 412 points, or nearly 9 percent, to 4,292.14. 
 
The stock rout began with China's posting of numbers that showed factory production in the world’s second-largest economy shrank in August at its fastest rate in more than six years. The numbers fuel concerns that China’s sudden slowing will have far-reaching effects around the world. 
 
All 10 sectors in the S&P 500 traded lower, led by a more than 6 percent decline in consumer staples and technology stocks. Healthcare and consumer discretionary stocks dropped more than 5 percent. 
 
Meanwhile, all 30 stocks in the Dow traded sharply lower, led by a 5 percent decline from The Coca-Cola Co. (NYSE:KO), while Cisco Systems Inc. (NASDAQ:CSCO) and McDonald's Corporation(NYSE:MCD) lost more than 4 percent. 
 
The yield on the U.S. 10-year Treasury slid further Monday to 1.97 percent from 2.045 percent Friday amid growing uncertainty about global economic growth. When investor confidence is low, the price on the 10-year goes up as there is more demand for Treasurys as a safe investment, and yields subsequently fall. 
 
The U.S. dollar fell against major currencies amid growing uncertainty of whether the U.S. Federal Reserve may wait even longer than planned after September to raise interest rates. 
 
U.S. oil prices extended losses Monday, tumbling 4 percent to trade below $30 after tallying an eighth straight weekly decline last week, the longest weekly losing streak in nearly 30 years. U.S. crude oil has lost around 17 percent from its opening price at the start of the month. 
 
West Texas Intermediate crude, the benchmark for U.S. oil prices, fell 4 percent to $38.69 per barrel for October delivery on the New York Mercantile Exchange. On the London ICE Futures Exchange, Brent crude, the global benchmark for oil prices, dropped nearly 3.5 percent to $43.87. 
 
From: International Business Times

Dow Jones Plummets as China's Stock Market Crashes

U.S stocks plunged Monday, with the Dow Jones Industrial Average plummeting more than 1,000 points following a global stock sell-off acro...

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GLOBAL ECONOMY IS OFFICIALLY MELTING DOWN

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Years of bailouts and monetary expansion have created one of the most inflated and artificial economic booms in history, and now it appears that this global economic bubble is deflating. Markets across the board are melting down as we speak, and the financial crash that supposedly “fringe” analysts have been predicting since 2008, is finally upon us. Take a look at what’s going down right now.</div>
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<li style="box-sizing: border-box;">The Dow has fallen <a href="http://theeconomiccollapseblog.com/archives/we-have-already-witnessed-the-first-1300-points-of-the-stock-market-crash-of-2015" style="background: transparent; border: none; box-sizing: border-box; color: #025ab4; outline: none; text-decoration: none;" target="_blank">1300 points</a> from its peak. On Friday alone, it fell by 530 points, making it the<a href="http://theeconomiccollapseblog.com/archives/this-2-day-stock-market-crash-was-larger-than-any-1-day-stock-market-crash-in-u-s-history" style="background: transparent; border: none; box-sizing: border-box; color: #025ab4; outline: none; text-decoration: none;" target="_blank">9th worst stock market crash</a> in US history.</li>
<li style="box-sizing: border-box;">The Shanghai composite fell by <a href="http://money.cnn.com/2015/08/21/investing/china-stocks-shanghai-composite/" style="background: transparent; border: none; box-sizing: border-box; color: #025ab4; outline: none; text-decoration: none;" target="_blank">more than 11%</a> this week. All told, China’s stock market has lost a third of its value since its previous peak, and the only thing holding it up is their government’s intervention. It lost 4% of its value on Friday after it was revealed that their manufacturing activity had reached a <a href="http://money.cnn.com/2015/08/20/news/economy/china-factories-growth-pmi/index.html?iid=EL" style="background: transparent; border: none; box-sizing: border-box; color: #025ab4; outline: none; text-decoration: none;" target="_blank">77 month low</a>.</li>
<li style="box-sizing: border-box;"><a href="http://www.bloomberg.com/news/articles/2015-08-21/world-s-richest-people-lose-182-billion-as-market-rout-deepens" style="background: transparent; border: none; box-sizing: border-box; color: #025ab4; outline: none; text-decoration: none;" target="_blank">400 of the world’s richest people</a> lost a total of $182 billion this week, amounting to 6.3% of their collective wealth. When the people who benefit the most from inflated markets are getting hurt, you know that the bubble is bursting.</li>
<li style="box-sizing: border-box;">The dollar’s rally may be finally nearing its end. Its value has fallen slightly, but consistently <a href="http://www.marketwatch.com/story/dollar-tumbles-after-downbeat-china-manufacturing-data-2015-08-21" style="background: transparent; border: none; box-sizing: border-box; color: #025ab4; outline: none; text-decoration: none;" target="_blank">for the past 2 weeks</a>.</li>
<li style="box-sizing: border-box;">Commodities have fallen to a <a href="http://www.bloomberg.com/news/articles/2015-08-21/these-charts-show-how-hard-china-has-hit-global-markets" style="background: transparent; border: none; box-sizing: border-box; color: #025ab4; outline: none; text-decoration: none;" target="_blank">13 year low</a>. The price of copper has reached a 6 year low while oil has suffered its longest <a href="http://www.marketwatch.com/story/oil-prices-under-pressure-in-asia-after-weak-chinese-manufacturing-data-2015-08-21" style="background: transparent; border: none; box-sizing: border-box; color: #025ab4; outline: none; text-decoration: none;" target="_blank">decline since 1986.</a></li>
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That last one is very telling. You can always tell when the global economy is in bad shape based on the value of various commodities. It’s one of the strongest indicators for an economy, since it reveals how many real, tangible goods are being produced. Curiously, many of these commodities have been falling in value throughout the supposed recovery that we’ve been in since 2009. The only commodity that is doing well right now is gold, which has reached a six week high, and just had its best week <a href="http://www.marketwatch.com/story/gold-climbs-to-six-and-a-half-week-high-2015-08-21" style="background: transparent; border: none; box-sizing: border-box; color: #025ab4; line-height: 18.2000007629395px; outline: none; text-decoration: none;" target="_blank">since last January</a>. Given the safe haven status that gold holds, it’s clear now that confidence in the US dollar and the global economy, is slowly slipping.</div>
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With all of this information at hand, it would be hard to deny that we may be finally witnessing the same kind of crash that we endured in 2008. Anyone who thought that we’ve been in a genuine recovery for the past 6 years, was foolish. But anyone who thinks that global markets will simply bounce back from what has occurred over the past few weeks, is downright crazy.</div>
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by JOSHUA KRAUSE | <a href="http://www.thedailysheeple.com/the-global-economy-is-officially-melting-down_082015" style="background: transparent; border: none; box-sizing: border-box; color: black; outline: none; text-decoration: none;" target="_blank">THE DAILY SHEEPLE</a> | AUGUST 23, 2015</div>
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GLOBAL ECONOMY IS OFFICIALLY MELTING DOWN

Years of bailouts and monetary expansion have created one of the most inflated and artificial economic booms in history, and now it app...

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Our Grandchildren are Officially Royally Screwed!

As you may have heard Congress passed a bill earlier this week that will supposedly "save" the housing market and prevent the collapse of Fannie Mae and Freddie Mac. I have a very limited understanding of Economics but I think this bill is going to cause some major issues in the future. I am even going so far as to predict that when we look back at history hundreds of years from now, the collapse of the United States and the US Dollar will be blamed on The Housing Bailout Bill - H.R. 3221. Don't Believe me, maybe you will believe Texas Congressman and the man who should be running for office instead of John McCain, Ron Paul: <object height="344" width="425"><param name="movie" value="http://www.youtube.com/v/Wy6SlUpbnIU&color1=0xb1b1b1&color2=0xcfcfcf&hl=en&fs=1"><param name="allowFullScreen" value="true"><embed src="http://www.youtube.com/v/Wy6SlUpbnIU&color1=0xb1b1b1&color2=0xcfcfcf&hl=en&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object> The Bill is over 700 pages long and I am sure there is a bunch wacky stuff in there that I can't comprehend but here are TWO things I do Understand: <ol><li>The federal government has decided to bailout Fannie Mae and Freddie Mac. Of course, since the government has no money itself, “bailout” means that the American taxpayer is now on the hook for billions if not trillions of dollars. It also increases the "cap" on the national debt to $10.6 trillion. Congress has made the American taxpayer liable for another $800 billion; that's about $2,500 per person. I am curious as to why no one asked me?</li><li>In a section entitled "Flexible Underwriting Criteria," the bill says that a troubled homeowner can still qualify for a new government insured loan despite bad credit and past financial mistakes. This is encouraging for those truly trying to get out of their real estate nightmares, but I imagine it will probably result in more defaults because some financially irresponsible people just never change. When those second defaults come in, tax payers will have to eat more loan losses. Once again, I don't believe I was consulted about this. </li></ol>Thankfully I'll be dead in no more than 75 years and I won't be around for the collapse of one the world's greatest empires. Many of you are probably thinking that I am a loon and a conspiracy theorist. Well, Yes. Thank you for the kind words but remember every empire falls eventually. The Roman Empire once controlled most of Europe and parts of Asia, Where are they now, you ask? Well, they made the same mistakes that the US is making today. Conquering Far away lands that they don't have any business in and allowing a corrupt government to run amok. Eventually the Citizens will revolt and in my Opinion it has been a long time coming. One of our greatest founding fathers, Thomas Jefferson predicted these events through these three quotes:1. "I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."2."The spirit of resistance to government is so valuable on certain occasions that I wish it to be always kept alive."3. "Every generation needs a new revolution."I will leave you off with a cut from the new Metallica album, which surprisingly Doesn't Suck(Lars Ulrich is still a tool, though). After putting out crap for almost two decades, the Bay Area Bashers finally come through with album reminiscent of their heyday: Metallica-The Day That Never Came <object height="344" width="425"><param name="movie" value="http://www.youtube.com/v/Mlahvvymkxc&hl=en&fs=1"><param name="allowFullScreen" value="true"><embed src="http://www.youtube.com/v/Mlahvvymkxc&hl=en&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object>

Our Grandchildren are Officially Royally Screwed!

As you may have heard Congress passed a bill earlier this week that will supposedly "save" the housing market and prevent the coll...

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