Weekend Economists Ask: R WEE Donne? January 8-10, 2016 [View all]

[Proserpina]

It's been an interesting week in the markets. When China's ricky-ticky stock markets started to go crazy, all the other markets (and the hot money and the shadow banksters) went into full panic attack mode. The hordes and their hoards were violently upheaved.

US stock market drops, ending its worst week since 2011

http://finance.yahoo.com/news/us-stocks-rise-day-sharp-153623143.html

A wave of late selling pummeled U.S. stocks Friday and pushed the market to its worst week in four years. The dismal start to the new year comes as investors worry that China's huge economy is slowing down. That has helped send the price of oil plunging to its lowest level since 2004, the latest blow to U.S. energy companies. Industrial and technology companies such as Boeing and Apple that do a lot of business in China have also fallen sharply this week. Mining companies such as Freeport-McMoRan plunged as copper prices have fallen. China is a major importer of copper.

Stocks started the day higher, driven in part by news of an encouraging burst in hiring last month by U.S. employers. China's stock market also rose 2 percent overnight, recovering somewhat after steep drops earlier in the week triggered trading halts. Indexes wavered between small gains and losses for most of the day, but took a decisive turn lower in the last hour of trading. That made this the worst week since September 2011, when the market was roiled by the fight over the U.S. debt ceiling and Standard & Poor's move to cut the credit rating of the U.S. government.

The Dow Jones industrial average dropped 167.65 points, or 1 percent, to 16,346.45.

The Standard & Poor's 500 index fell 21.06 points, or 1.1 percent, to 1,922.03.

The Nasdaq composite index shed 45.80 points, or 1 percent, to 4,643.63.

The Dow and S&P 500 are each down about 6 percent for the week. The Nasdaq composite fell even more, 7.3 percent. That index is heavily weighted with technology and biotech companies, both of which were high-fliers last year. The largest losses on Friday went to financial stocks. JPMorgan Chase lost $1.35, or 2.2 percent, to $58.92 and Citigroup fell $1.43, or 3 percent, to $46.13. Health care stocks slumped, led by drug companies. Energy stocks also skidded as the price of oil, already at decade lows, continued to fall.

European stocks also rose early in the day, but couldn't hang on. The FTSE 100 index of leading British shares declined 0.7 percent while Germany's DAX lost 1.3 percent. The CAC-40 in France slid 1.6 percent.

The same pattern held in the U.S. In its monthly jobs report, released before the stock market opened, the Labor Department said U.S. employers added 292,000 jobs in December, far more than economists had forecast. That's the latest sign the U.S. economy is still growing. On average employers added 284,000 jobs per month in the fourth quarter, the best rate in a year...Throughout the week, worries about China's economy and shocks to its markets have canceled out positive news from the U.S. and Europe. While China's economy is still growing, that growth isn't as fast as it has been. That could hurt sales of everything from iPhones to oil and heavy machinery.

Oil prices also lost ground. U.S. crude fell 11 cents to close at $33.16 a barrel in New York and Brent crude, a benchmark for international oils, declined 20 cents to $33.55 a barrel in London. Exxon Mobil lost $1.54, or 2 percent, to $74.69 and Tesoro fell $5.41, or 5 percent, to $101.62.

This week retailers started disclosing their holiday-season results. Gap and American Eagle both reported disappointing sales. Gap stock dropped $3.83, or 14.3 percent, to $22.91, its lowest in almost four years. American Eagle tumbled $2.64, or 16.6 percent, to $13.24. Department stores were among the biggest losers on the S&P 500. Their holiday sales have been hurt by the unusually warm winter weather. Kohl's fell $2.98, or 5.9 percent, to $47.88 and Macy's lost $1, or 2.7 percent, to $35.89. The Container Store reported a surprise third-quarter loss and disappointing sales, and its stock plunged $2.96, or 41.2 percent, to $4.22. The company went public in November 2013 with an IPO that priced at $18 per share and it finished its first trading day at $36.20.

The price of gold fell $9.90, or 0.9 percent, to $1,097.90 an ounce. Silver declined 42.6 cents, or 3 percent, to $13.918 an ounce. Copper was unchanged at $2.022 a pound.

The euro fell to $1.0903 from $1.0927 and the dollar edged up to 117.67 yen from 117.50 yen late Thursday. Bond prices rose. The yield on the 10-year Treasury note edged down to 2.12 percent from 2.15 percent.

In other energy trading, wholesale gasoline fell 1.8 cents to $1.128 a gallon, heating oil fell 1.4 cents to $1.052 a gallon and natural gas rose 9 cents to $2.472 per 1,000 feet.

So, is this the beginning of the end of the Capitalist Complacency? Will the 1% sink back into the middle of the pack, as their paper assets go up in smoke? Will the Great Hegemon of the West dissipate like smoke on the water? Will the 3rd World be allowed to proceed without the Crazy Uncle sticking his nose into their every affair?

Let's find out what John Donne would say. This English poet and cleric would be able to deal with the metaphysical aspects of it all:

Death, be not proud, though some have called thee
Mighty and dreadful, for thou art not so;
For those whom thou think'st thou dost overthrow
Die not, poor Death, nor yet canst thou kill me.
From rest and sleep, which but thy pictures be,
Much pleasure; then from thee much more must flow,
And soonest our best men with thee do go,
Rest of their bones, and soul's delivery.
Thou art slave to fate, chance, kings, and desperate men,
And dost with poison, war, and sickness dwell,
And poppy or charms can make us sleep as well
And better than thy stroke; why swell'st thou then?
One short sleep past, we wake eternally
And death shall be no more; Death, thou shalt die.

or as others have remarked: sic transit gloria mundi