Fragile Global Economy Is Starting to Crack Up

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I woke up a little late this morning, but maybe that turned out to be a good thing. The Dow Jones plunged a thousand points within minutes of opening, but by the time I saw the news it had already recouped about half of that loss:

You can probably guess what triggered this:

The stock drop was fueled by what China’s state media is already calling “Black Monday,” in which markets there recorded their biggest one-day plunge in eight years amid growing fears over an economic slowdown.

On Friday, China reported its worst manufacturing results since the global financial crisis, a new sign of woe for the world’s second-largest economy, which surprised investors earlier this month by announcing it would devalue its currency. China’s benchmark Shanghai Composite index has fallen by nearly 40 percent since June, after soaring more than 140 percent last year.

Markets around the world are crashing, and as usual that means seeking safety in the good old US of A:

Investors stampeded into relatively safe assets such as U.S. government bonds, the Swiss franc and the yen. The yield on the 10-year Treasury note dropped below 2% during Asian trading and recently was 1.976%, the lowest level since April.

….“A lot of markets abroad have seen a low amount of liquidity so investors are turning to the U.S. market to hedge,” said Jeffrey Yu, head of single-stock derivatives trading at UBS AG….While the selloff began as an emerging markets story, with China’s stock market offering very little liquidity to investors due in part to technical stock-trading halts, investors have had to turn to the most liquid market to sell, which is the U.S., Mr. Yu said.

Now can we finally get a statement from the Fed saying that they no longer have any immediate plans to raise interest rates? Please?

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WE'LL BE BLUNT

We need to start raising significantly more in donations from our online community of readers, especially from those who read Mother Jones regularly but have never decided to pitch in because you figured others always will. We also need long-time and new donors, everyone, to keep showing up for us.

In "It's Not a Crisis. This Is the New Normal," we explain, as matter-of-factly as we can, what exactly our finances look like, how brutal it is to sustain quality journalism right now, what makes Mother Jones different than most of the news out there, and why support from readers is the only thing that keeps us going. Despite the challenges, we're optimistic we can increase the share of online readers who decide to donate—starting with hitting an ambitious $300,000 goal in just three weeks to make sure we can finish our fiscal year break-even in the coming months.

Please learn more about how Mother Jones works and our 47-year history of doing nonprofit journalism that you don't elsewhere—and help us do it with a donation if you can. We've already cut expenses and hitting our online goal is critical right now.

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