So it was not really about two broke siblings, the US and Europe, it was about their supplier. News of China’s growth engine slowing to 5% in a few years, something that has been talked about for awhile. Click here for a BofA presentation.
Commodities are tanking because they are not buying them at the same rate, copper and coal are tanking since their manufacturing is slowing (we are too broke to buy their stuff), Tiffany’s and Coach are tanking (because they may stop buying our stuff). To that mix add in accounting irregularities in some of their net stocks. Sprinkle with a dash of speculation that somebody big must be under margin or redemption pressure and we get this weird day!
I cannot imagine that Dow 11K lasts very long. In a race to bottom, does the Dow get to 4-digits or the S&P to 3-digits?