Markets Slump Over Fed Exit Plan and China Credit Squeeze

[onehandle]

Source: New York Times

Global markets tumbled on Thursday over concern about a credit crunch in China and uncertainty about the United States central bank’s plans for withdrawing the monetary stimulus upon which the American economy has become dependent.

Just a day after the Federal Reserve hinted that it could soon begin winding down its bond-purchasing program, investors were unnerved by reports that Chinese banks had become reluctant to lend to one another, causing interest rates in the interbank market to spike to punishingly high levels.

On Wall Street, the broad-based Standard & Poor's 500-stock index ended down 2.5 percent Thursday, the Dow Jones industrial average dropped 2.3 percent — more than 350 points — and the Nasdaq composite index shed 2.3 percent. On Wednesday, the S.&P. 500 fell 1.4 percent.

The pain was also felt in the bond market, with yields on government bonds, which move in the opposite direction of the price, surging worldwide. The 10-year United States Treasury bond was yielding 2.380 percent, up 2.8 basis points. A basis point is one-hundredth of a percent. Expectations that interest rates will rise tend to depress the prices of existing securities.

Read more: http://www.nytimes.com/2013/06/21/business/global/daily-stock-market-activity.html

[NoOneMan]

1. I've been waiting years for this

Time to sit back and watch the show

[galileoreloaded]

2. oh yeah, and this one is going to hurt. nt

[Iliyah]

3. It gonna hurt the 1%

that tlicking down BS is not working.

[OKNancy]

4. the stupid here is amazing

it hurts the little person too.
Retirement accounts being only one reason.
But unfortunately for the naysayers, it's a temporary downturn.

[Turbineguy]

5. You mean you don't like to see

retired (and those who may wish to retire) people get hurt? What kind of DUer are you? These market turndowns are a great chance to gloat at the pain of those who worked and saved!

[OKNancy]

6. a 64 year old! n/t

[NoOneMan]

7. Markets will eventually rebound...

...unless we slip into eternal stagflation (which is entirely possible). But if stagflation is only avoidable by continued government intervention it is therefore unavoidable in the foreseeable future.

I'm glad to see China faltering and the USD on a rebound. Both these forces have put a major squeeze on my for the last few years living abroad. Its been long predicted and now there will be some bloodletting. The US is in the best position now to grow so this should be positive news for most here, provided the current economic models still allow growth (gutted consumer class and high cost of energy may shift the paradigm forever though).

[99th_Monkey]

8. Oh shit!

I have NOT yet become a billionaire, who owns a private aquafer and can
hire Blackwater mercenaries to guard my land and wealth from "rabble".

I guess I'm SOL.

[xtraxritical]

9. Buy DOW calls now. Corporate earnings are going to drive the market not this QE stuff.

[flamingdem]

10. Minor pullback, not enough fear yet nt

[CountAllVotes]

11. the tip of the iceberg ....

Just went klunk.

Credit crunch they say?

Bankers won't lend to one another now?

Sounds kind of familiar doesn't it?

Reeks of 2008-2009 USA USA USA

Who will bail them out if no one will lend to them.

What a mess we have here indeed.

Wait, then there's 'dem bonds they've been buying.

Time to cash a few in dare I suggest?