2016 crisis update: the year of the Red Fire Monkey burns the world’s markets down

STOXX Europe 600 Index.jpg

STOXX Europe 600 Index record low: 10 January – 09 February 2016

The Chinese New Year began two days ago and has brought already significant turbulences and volatilities to the global financial markets and economies. Luckily for the world’s second largest economy, Chinese stock markets are closed due to New Year’s festivities and haven’t experienced, at least yet, the losses of the European, U.S. and Japanese markets.

This year is the one of the red fire monkey in China and it is said that will bring financial as well as political changes. The later was extensively witnessed in the stock markets around the world where major indices experienced great losses.

Europe’s banks were among the worst performers last Monday and dragged the markets down with their poor performance. The concern about China’s slow growth is one factor that is not making things look better for investors.

European indices are going down

Germany’s main stock market represented by the Deutsche Boerse AG Stock Index DAX, which consists of 30 German blue chip stocks traded at the Frankfurt stock exchange, fell by 17,35% year to date to 8879,40. Especially, its banking sector revealed serious problems with Deutsche Bank AG , the leading financial service provider, to have a year to date loss of -39.13%. Even if the company’s Co-CEO John Cryan reassured investors that the bank remains stable characterizing it as “absolutely rock-solid”, the share experienced a record low and dropped at 13.71 euros yesterday.

CAC 40 Index in Paris has dropped 13.79% since the beginning of the year showing the poor performance of the French market and specifically of the 40 largest listed equities in France. Furthermore, FTSE 100 Index in London dropped to 5632.19 showing a 9.77% year to date decrease.

An overall view of the European stock exchanges is reflected in the STOXX Europe 600 Index which is derived from the STOXX Europe Total Market Index. The STOXX Europe 600 Index notes a 15.42% fall from the beginning of 2016 and experienced a 2-year low, at 310 yesterday. It seems that the whole financial system is on fire and a possible financial crisis like or worse than 2008 may not be far away after all.

U.S. and Japan feel the monkey most

It seems that the arrival of the Chinese New Year didn’t start well for the American and Japanese financial markets either. The Standard and Poor’s 500 Index, which measures the performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries, has closed last Monday at 1853,44, at its lowest level since April 2014.

The Nikkei-225 Stock Average, Japan’s main index, has also experienced substantial year to date losses of 15.49%. Particularly, Nomura Holdings ‘s share, one of the leading financial giants, decreased from 577.7 last Friday to 510 last Tuesday, dropping by 13.27% in only 2 trading days.

Will Europe ever get out of crises?

Europe is struggling to boost its economy with any means but it seems to be very difficult, not to say impossible. The president of the ECB is injecting more money into the financial system and more specifically into the banks in order for the latter to fill in the real economy and consequently increase inflation to ECB’s target of close but below 2%. But this is not happening whatsoever and Mario Draghi is seriously thinking about providing even more cash to the banks and even lend them with a negative interest rate, at a time when this sector is rapidly slowing down.

In detail, Michael Hewson, chief market analyst at CMC Markets, mentioned last Monday: “The questions of non-performing loans as well as shrinking margins are creating an increasingly difficult environment for European lenders and it would appear that investors are slowly waking up to the reality that negative rates aren’t likely to help the profitability of a sector that is still dealing with the legacy of the sovereign debt crisis”.

Except for the financial and banking problems that are plaguing Europe, political leaders haven’t found yet one solution to the refugee crisis, something that is significantly influencing the Old Continent economically and even puts at risk the whole European project.

All in all, it seems that the Chinese prophecy will come true and the year of the monkey will slow down economies around the world and reveal the awful weaknesses behind the European financial and political structure.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

US prosecutors now target Volkswagen’s top management, upsetting Germany

War of words in Davos over Eurozone’s inflation/deflation

EU/Africa, Caribbean and Pacific: towards which partnership?

MWC 2016: IoT experts fret over fragmentation

Africa’s inspiring innovators show what the future could hold

EU: The Member States to pay for national banking problems

The EU finally seizes the opportunity to support the sharing economy?

Will GDPR block Blockchain?

Living in the mouth of the shark: we are all refugees

EU Commission announces Safe Harbour 2.0 and a wider Data protection reform

Teenage girl’s death sentence spotlights Sudan’s failure to tackle forced marriage, gender-based violence – UN rights office

India’s Largest Entrepreneurship Event is Back! (23-24th August 2016)

A sterilised EMU may lead to a break up of Eurozone

UN Human Rights Council resolution on youth and human rights: a step forward for youth rights

Belgium: Youth Forum takes legal step to ban unpaid internships

“A divided Europe is not in China’s interests”, Ambassador Zhang of the Chinese Mission to EU welcomes Brussels

“Two Pack” approved: Is democracy chased away from Brussels?

My unlimited China

How much more political is the new EU leadership? Does this include personal bend?

Eurozone: Black economy loves the South

Eurasian Union begins: the giant modelled on the EU is Moscow’s biggest challenge

EU Budgets: Europe hoping for Xmas gifts

Youth Guarantee putting young people in jobs

MEPs call on EU countries to end precarious employment practices

Will Western Balkans respond positively to EU initiatives?

ECB settles the bank resolution issue, makes banking union tangible

More bank bailouts at taxpayers’ expenses

Use “blockchain” model to cut small firms’ costs and empower citizens, urge MEPs

The Catcher in the Rice

Reality Shock

Any doubt?

Germany tries to save Europe from war between Ukraine and Russia

A machine din

Light at the end of the Eurozone tunnel

Yesterday’s “jokes” and sarcasm by Digital Single Market’s Vice President Ansip on EU member states’ right to protect their telco markets

A new catastrophic phase in the Syrian carnage

Τhe EU Refugee Crisis: a day in the life of a Refugee in Greece

A young student discusses the determinants of migration in the European Union

Europe might not avoid new partitioning on Ukrainian crisis

European Agenda on Migration: Still fragile situation gives no cause for complacency

Drugs cost too much. There is a better way to fund medical innovation

Time to be welcome: Youth work and integration of young refugees

EU economic governance: More exploitation for the weaker countries

Eurozone’s credibility rock solid

European Business Summit 15th year: Controversy and Constructive Ideas

Is a uniform CO2 emission linked car taxation possible in the EU?

The EU can afford to invest trillions in support of employment

UN humanitarian coordinator condemns Central African Republic hospital attack as ‘inhuman and unworthy’

Greece’s future solely in the hands of Tsipras; he can direct the poor country any way he likes

A Sting Exclusive: “There can be no global deal on emissions without China and the USA”, Conservative MEP Ian Duncan stresses from Brussels

Italian voters put again the European Peoples in the Brussels picture

EU to increase spending and improve delivery of education in emergencies and protracted crises

The cuts on 2014 Budget will divide deeply the EU

Jeroen Dijsselbloem new Eurogroup president

European Parliament the most trusted EU institution

European Union: Retail sales show deep recession

How I met the Panda Woman

Access to health in the developping world

Can the US deal a blow to EU and Russia together over Ukraine?

Youth unemployment: think out of the box

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s