China Could Trigger the Biggest Financial Rout Since 2008

• China Could Trigger the Biggest Financial Rout Since 2008
  by Barbara Kollmeyer, http://www.marketwatch.com/ , 12 Aug 2015   
  So much for that “one-time correction.” The People’s Bank of China let the yuan drop again overnight, fixing the currency 1.6% below Tuesday’s close, following the 1.9% devaluation heard around the world a day ago.
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  It then had to intervene to keep things from getting out of hand. 
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  Cue continued freakout for global markets. 
  Deutsche Bank, for one, is predicting the yuan is overvalued by around 10%, so if the yuan continues to weaken, things could yet get a lot darker for markets. And stocks aren’t dealing well with the new China reality they’ve seen so far.
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  Jani Ziedins of the Cracked Market blog says the U.S. market’s reaction — the S&P 500 fell 1% Tuesday, and futures are pointing sharply lower on Wednesday — looks a bit overdone. Still, he says, it’s understandable given the reasons behind it — fears of much bigger economic problems in China. Good news? “…if a crumbling Chinese economy cannot bring down this market, then nothing will and all we can do is hang on and enjoy the ride,” he says.
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  Ziedins says watch the next two days to get some insight into the market’s psyche. Either selling is revving up to drop this market to levels not seen in years or this emotional purge will exhaust itself, and a rebound will follow, he predicts. Our chart of the day shows just how long it’s been since the S&P 500 has had a decent correction.
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  But if death crosses and visions of rotting Apples are disturbing your sleep, you aren’t alone. ”The darkest horizon ever approaches, infused with Chinese black coal,” predicts the Fly, blogging for iBank Coin. It’s time to be cautious, he says. More on that here.
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  If you really want to shiver your timbers, then check out our call of the day. One of the biggest bears out there is riding the China devaluation to the hilt, talking boils and puss and predicting a financial crisis a la 2008. Brr…
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  read more.

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