KangAnon wrote on Aug 6
th, 2024 at 11:17am:
Japan has not raised interest rates in years, in fact, they had negative interest for 15 years. Over the past few months, they’ve raised them up to 0%.
Now they just announced a 25-point interest rate increase to 0.25%, with plans for further rate increases later this year. With concerns over the local economy in Japan growing as a result, this has led to panic selling in the Japanese market, which is leading to investors pulling money out of other markets so they have enough liquidity to pay their margin in Japan if it’s called.
It's just the market reacting to cheap money loophole that's just closed and could now cost them far more in the long run, so they're trying to exit now.
Good points. The plunge came in
response to the decision by the Bank of Japan last week to lift interest rates into positive territory, ending a zero-rate regime that has prevailed for more than a decade and a half which has zero to to do Biden, Harris, Trump or sirlastnail's social worker who obviously failed him.
On the domestic front another factor is increasing fear of a recession in the America heightened by the US jobs report issued Friday that the number of new jobs last month was 114,000, well below the expectation of 175,000. This was coupled with a rise in the unemployment rate to 4.3 percent. That increase brought the rise in the rate to 0.6 percent from its previous low, directing attention to the so-called Sahm Rule*, which describes a recession when the three-month moving average moves at least half a percentage point above its low in the previous 12 months.
As for the massive sell off, the parasites at Wall Street which is deeply interconnected with other Capital Markets exposes once again the deep vulnerabilities of a system built on house of cards. Yesterday a shift in monetary policy of BOJ along with realization that Tech stocks have been way overstretched from the overall economic fundamentals created the conditions for this one day crash.
Then there is the explosive geopolitical situation in Middle East which further exacerbated the situation. Now it is easy to anticipate that the agents of big finance Capital will put further pressure on the Fed to return to the policy of
cheap money. However, when you do that, it starts to become too costly to sustain especially at a time when the national debt is adding 1 trillion dollars in every 100 days. This wealth transformation from the poorest of the poor to the uber rich to up could only come to an end with political struggle for socialism.
*https://www.barrons.com/news/what-is-the-sahm-rule-behind-the-market-panic-78c2... are you a young chickie hip pot smoker or a frustrated 60 yo fat man who works in the civil service.
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