August 23
Good evening,
The Dow Jones Industrial Average lost more than 1,000 points last week. The S&P 500 saw $1.1 trillion in wealth wiped out. Over the weekend, market analysts, traders, and backseat drivers discussed whether this was the start of a major correction or if this was just a blip in a still expanding market. Here was one argument for optimism (although @modestproposal1 says that doesn’t mean the market couldn’t tank further):
3 things I believe: 1. Housing cycle just starting 2. Real consumer spending to accelerate 3. Banking system least risky in a decade+
— modest proposal (@modestproposal1) August 23, 2015
Over at See It Market, Mark Arbeter has eight (count ’em eight!) reasons the market will bounce back. Meanwhile, everyone is still chewing on what the 10% correction on the Dow and are pretty worried about oil, which briefly broke through $40/barrel.
Here’s what else you need to know:
China pensions get go ahead to invest in stocks. Now if that doesn’t send a frisson of fear down your back, then ice water runs in your veins. It’s a measure of China’s desperation to support the stock market that the country is empowering pensions to invest up to 30% of funds in stocks. Xinhua
Twitter has this to say about putting pensioners in volatile stocks:
The worse political scenario in my view: stock market crisis -> pension fund crisis -> old people lose money -> rising social unrest. Next?
— George Chen (@george_chen) August 23, 2015
George Chen helpfully adds these datapoints: Pension funds hold 3.5 trillion RMB; 30% is more than 1 trillion RMB to boost stock market.
Winner: Usain Bolt comes from behind to win the 100-yard dash. The lightening quick running edged out archrival American Justin Gatlin. Quartz
Loser: The Democratic Party. Barak Obama has so weakened the Democratic Party that even if a Democrat claims the White House, Republicans will gain power throughout the land, effectively blocking a progressive agenda. Politico Magazine
Sen. Harry Reid endorses Iran deal. The minority leader gave the thumbs up to the controversial nuclear pact with Iran and is likely to mean that Congress will be unable to block it. Washington Post
Danger zone: The two Koreas enter second night of talks. North Korea is fuming that South Korea is blasting anti-communist messages into their territory. South Korea says the North is building up military units on the border and activating submarines. BBC
France asks for help from citizens to spot terror plots. After three Americans foiled a lone gunman on a train from Amsterdam to Paris, the government is asking for all citizens to be on the qui vive. Wall Street Journal
Pokemon convention threatened by gunman. Can’t make this up. Boston police broke up what they believe was a plan by two competitors to wreak havoc at the Pokeman World Championship. The Daily Beast
You won’t believe this:
We guess pandas don’t do sonograms. A panda at the zoo in Washington, D.C., gave birth to a healthy cub. Then to the surprise of one and all, gave birth to a second cub five hours later. These are the first giant pandas born in the U.S. Mashable
Photo: ©iStock.com/Ugurhan Betin