Posted on 12/11/2015 4:48:04 AM PST by expat_panama
World stocks were on the brink of a two-month low on Friday, as beaten-down oil prices and a slide in China's yuan to 4-1/2 year lows left markets in a somber mood.
Volatile oil markets and worries about China, the world's biggest commodities consumer, have pressured many markets ahead of a widely anticipated interest rate hike by the U.S. Federal Reserve next week.
MSCI's world stock index .MIWD00000PUS fell for a fifth straight day as emerging markets tumbled again and European shares .FTEU3 opened at a two-month low while the dollar steadied.
"We are in risk-off mode," said Piotr Matys, emerging market currency strategist at Rabobank in London.
"Another round of selling in commodities with oil prices at new lows has sent global stocks lower and emerging market commodity currencies are under pressure."
The Russian rouble RUB= tumbled 2 percent against the dollar, with focus on a meeting of the Russian central bank later on Friday.
Investors were also waiting for U.S. data which could cement expectations that the Fed is gearing up to hike rates for the first time in a decade next week.
U.S. retail sales, inflation and consumer sentiment data is due between 8.30 a.m ET and 10 a.m. ET.
European shares .FTEU3 fell 0.7 percent, declining for a fourth straight session, while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS hit a two-month low and posted a weekly loss of just over 3 percent.
YUAN LOWER AGAIN
China's yuan fell to its weakest in 4-1/2 years CNY=CFXS at 6.4564 per dollar and posted its longest weekly losing streak in a decade, dragging emerging Asian currencies lower, on concerns about its slowing economy and expectations of a U.S. rate hike next week.
[snip]
"A U.S. rate hike would have a major impact...
(Excerpt) Read more at reuters.com ...
But but but HOW can this be? Our good friends around the world are moving to replace the dollar with Chinese fake money? How CAN this be?
Never ceases to amaze me how folks complain when the Yuan’s overvalued and then they scream worse when it’s undervalued. Same w/ oil prices and stock market indexes. Some folks are only happy when they’re miserable I guess...
China is playing America with this.
They are currently running a (massive) trade surplus with America. Huge.
Depreciating is simply protecting that surplus.
We need to bring back American manufacturing.
-— They are currently running a (massive) trade surplus with America. Huge. -—
They get increasingly worthless paper. We get stuff.
We don’t need stuff.
We need jobs.
That's what I was just saying, that back when the Yuan was supposedly overvalued that so-called "trade deficit" w/ China grew, and now that the exchange rate's down we're supposed to blame the tradedef on that too. Of course, to me this is clearly a numbers/math/real-life-money thing. Most folks approach this purely from a feeeelings side.
fwiw, we're also into this topic at Another Big Fib By The Left About Wal-Mart And Jobs
Chinese factories slow down and layoff coolies, the USA is unaffected. Film at 11:00.
not worthless yet. they buy usa real estate with it. usa real estate has value.
Job creation shouldn't be an end in itself. There was full employment in the USSR where people were digging holes and filling them in.
A marketplace that is free of unnecessary governmental interference will provide work for anyone who wants it.
Good point. But that makes them economically dependent on us, which is a strategic benefit.
Yeah dealing with ChiComs is the epitome of freedom. Everyone knows the China market is tariff free and open to all. /sarc
the more usa ground the chinese own, the worse for the usa.
if someone own the ground under our feet, then we are dependent on them, not vice versa.
I always read that they are going to make the Yuan a reserve currency. Seems to me that it would suck to do so.
“usa real estate has value.”
But you can’t take it back to China and there are overhead expenses.
dont need to. you can rent it out, lease it out, and sell it when you are done with it. or you can improve on it by building on it and then doing the same, but more. meanwhile it appreciates as an inflation hedge.
btw, there are mainland chinese who are doing this right now, so it is not theoretical.
They can want to have it be so all they want, but it’s not their decision what other countries do.
overhead expenses are subtracted from rent/lease revenue (if any) to yield net cash flow. if the cash flow is negative, it can still be a “safe haven” type investment. possibly some losses can be used as tax deductions. and if the real estate value appreciates substantially, then the sales price can help offset the overhead.
Didn’t work too well for the Japanese in the 1980s. They couldn’t rent (over built) and taxes ate up cashflow. Ended up selling back at a loss.
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