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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IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

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