Bloomberg:
- Stocks Fall Most in 4 Years as China Dread Sinks Global Markets. Turbulence in financial markets gathered momentum amid intensifying concern over slowing global growth, pushing the Dow Jones Industrial Average into a correction and giving other stock gauges their worse losses since 2011. More than $3.3 trillion has been erased from the value of global equities after China’s decision to devalue its currency spurred a wave of selling across emerging markets. The worries over slower economic growth come as a strong dollar and plunge in oil prices take a toll on corporate earnings at the same time the Federal Reserve is contemplating the first boost to interest rates since 2006. “For much of this year, the glass was considered half full and now people the last 48 hours are thinking it’s looking more empty,” George Hashbarger, who oversees $224 million as chief executive officer and portfolio manager at Knoxville, Tennessee-based Quintium Advisors LLC, said by phone. “This is more like October than it is buy-the-dip.” Volatility surged as Standard & Poor’s 500 Index capped the worst week in three years while Europe entered a correction and stocks from Hong Kong to Indonesia tumbled into bear markets. Junk bond yields rose to the highest since October 2012 and U.S. Treasuries had the largest weekly gain in five months. Oil sank below $40 a barrel for the first time since 2009 and was set for its longest losing streak since 1986. The S&P 500 dropped 3.2 percent, the most since November 2011, to below 2,000. The index is down more than 7 percent from a record after sinking below a trading range that has supported it for most of the year. The Dow Jones Industrial Average fell more than 500 points, as is down 10 percent from its record high in May.
- These Charts Show How Hard China Has Hit Global Markets. The damage is everywhere.
- World’s Richest People Lose $182 Billion as Market Rout Deepens. The world’s 400 richest people lost $182 billion this week from their collective fortunes as weak manufacturing data from China and a rout in commodities sent global markets plunging. The weekly drop for the Bloomberg Billionaires Index, a group that includes Warren Buffett and Glencore Plc’s Ivan Glasenberg, was the biggest since tracking of the expanded list began in September 2014. The combined net worth of the index members fell by $76 billion on Friday alone, when the Standard & Poor’s 500 Index of U.S. stocks ended its worst week since 2011.
- JPMorgan Warns This Emerging-Market Credit Strength May Fizzle. Try figuring this one out: Emerging-market stocks have gotten pummeled over the past few weeks while corporate bonds from the same regions have outperformed many other assets. How does this make sense? It doesn’t really, especially as China shows more signs of slowing, said Scott McKee, head of an emerging-markets corporate-debt group at JPMorgan Chase & Co.’s asset-management unit. “There’s a long list of fundamental issues that we could go through that suggest that emerging markets should be doing worse than other fixed-income sectors at the moment,” McKee said in a telephone call this week. “I don’t really understand why it’s been as resilient as it has been.” A growing number of investors seem to agree with McKee, who recommends cutting holdings of the debt below index weightings. Almost $2.5 billion was pulled from emerging-market debt funds over the past week, the biggest withdrawal since the beginning of 2014, according to EPFR Global data. Asia credit funds saw their largest outflow on record, according to Wells Fargo & Co. data.
- Koreas Locked in Talks as Kim’s Deadline for Attack Passes. North Korea and South Korea will continue talks Sunday aimed at defusing tensions across their heavily fortified border, after Kim Jong Un’s threat to launch an attack passed without incident. The talks adjourned at 4:15 a.m. and will resume at 3 p.m. local time, South Korean presidential spokesman Min Kyung-wook said, according to the Associated Press. Kim’s top military aide Hwang Pyong So and South Korean President Park Geun Hye’s chief security adviser Kim Kwan Jin met at the border village of Panmunjom.
- Largest Korea ETF Sees Worst Money Outflow on Record Amid Crisis. The iShares MSCI South Korea Capped ETF, the largest exchange-traded fund tracking the country’s stocks, had the biggest weekly withdrawal since inception in 2000 amid investor concern over a revival of tensions on the Korean peninsula and an escalating selloff in emerging markets. Traders pulled $195.4 million from the ETF, whose top holdings include Samsung Electronics Co. and Hyundai Motor Co., in the five trading days ended Aug. 21, according to data compiled by Bloomberg. The fund, which has $3.1 billion in assets, fell 7.2 percent in New York to an almost four-year low of $45.67 during the week and is down 27 percent from a high in April.
- Treasuries Log $67 Billion Weekly Rally as Fed Countdown Stalls. While Federal Reserve policy makers have suggested an interest-rate increase is in the cards this year, their plans are facing renewed scrutiny from bond markets. As stocks tumbled this week and oil fell below $40 a barrel for the first time since 2009, Treasuries investors saw the value of their holdings swell by $67 billion, the most since early July, according to Bank of America Merrill Lynch bond indexes. The appeal of government debt grew as declining commodity prices and tumbling inflation expectations suggest global demand is weakening.
- Kazakh Premier Sees Oil-Nation Currency Pegs Axed as Crude Falls. Currency pegs in crude-producing nations are set to topple as the world enters a “new era” of low oil prices, according to the prime minister of Kazakhstan, which rattled markets this week with its surprise decision to abandon control of the exchange rate. “At the end of the day, most of the oil-producing countries will go into the free floating regime,” including Saudi Arabia and the United Arab Emirates, Karim Massimov said in an interview on Saturday in the capital, Astana. “I do not think that for the next three to five, maybe seven years, the price for commodities will come back to the level that it used to be at in 2014.” Central Asia’s biggest oil producer cut the tenge loose on Thursday, triggering a 22 percent slide to a record low versus the dollar. The move followed China’s shock devaluation of the yuan the week before, which drove down oil prices on concern global growth will stutter and raised the prospect other nations with managed exchange rates will allow their currencies to weaken to stay competitive.
- Brazil Stocks Enter Bear Market Amid Developing-Nation Selloff. The rout in developing nations sent Brazilian stocks into a bear market as Latin America’s largest economy heads toward the worst recession in 25 years. The real led world losses. The stock gauge extended its slump since its May peak to 21 percent after the weakest Chinese manufacturing data since the global financial crisis accelerated a selloff in riskier assets. State-owned oil producer Petroleo Brasileiro SA fell for a seventh day after crude sank below $40 a barrel. The real posted the biggest decline among 16 global major currencies. “The Brazilian market is on the verge of a nervous breakdown,” Alvaro Bandeira, an economist at Banco Modal, said from Rio de Janeiro. “There’s just awful news coming from all fronts. It’s really discouraging.”
- Brazil Has Yet Another Big Mess on Its Hands After State Default. Engulfed by political and economic crises, Brazil can ill afford to be beset by more problems. Yet that’s exactly what is happening after its southernmost state of Rio Grande do Sul defaulted on a 280 million real ($80.9 million) payment to the federal government this month -- the first since the nation’s municipal-debt meltdown in 1997. The state, proportionally the most-indebted in Brazil, is in such distress that it didn’t pay salaries to public workers in July.
- Taiwan’s Stocks Enter Bear Market Amid China Economic Concerns. Taiwan’s stocks entered a bear market amid concern China’s economic slowdown and currency devaluation will curb demand for the island’s technology products. The Taiex index fell 3 percent to 7,786.92 at the close, the lowest level since June 2013. The benchmark gauge has tumbled more than 20 percent from a 15-year high on April 27, the threshold for a bear market. Taiwan Semiconductor Manufacturing Co., the biggest stock in the Taiex, dropped 4 percent.
- Africa Running Out of Options as China to Kazakhstan Devalue. Currency devaluations from Kazakhstan to China are heaping pressure on African central banks to relinquish control of their exchange rates as they run down reserves faster than any other region. From Nigeria to Uganda, African policy makers are burning through their foreign reserves and tightening monetary policy to prop up their currencies. Thursday’s move by Kazakhstan, central Asia’s largest crude exporter, to abandon its currency peg has intensified speculation that authorities in Africa will devalue or halt intervening in their foreign-exchange markets.
- Snipers, Vehicle Moves Among Classified Data E-Mailed to Clinton. The e-mail painted a vivid picture of a fast-deteriorating situation in Libya’s bloody civil war, complete with snipers shooting people, armed forces on the move and diplomatic personnel preparing to evacuate. The message, dated April 10, 2011, was forwarded to “H,” for Hillary Clinton, then the secretary of state. It came from one of her closest aides, Huma Abedin, who is now vice chairman of her presidential campaign.
- Two U.S. Military Men Praised for Actions on French Train. Members of Air Force and Oregon National Guard subdued a gunman loaded with weapons. Authorities praised two U.S. military members and their friend who tackled and subdued a man armed with guns and a box cutter on a Paris-bound train Friday as it sped through Belgium, breaking up what could have been a deadly terrorist attack.
- U.S. Stock Plunge Picks Up Speed. Ugly week ends with worst day for the Dow and other indexes in years.
- The Saudis Reply to Iran’s Rising Danger. An influential Saudi former military commander on making common cause with Israel and warming toward Russia as the U.S. backs away.
CNBC:
- Markets in turmoil: Watch CNBC special report. CNBC will be airing a special report on Sunday, Aug. 23 at 7pm ET.
Zero Hedge:
- Is The Oil Crash A Result Of Excess Supply Or Plunging Demand: The Unpleasant Answer In One Chart. (graph)
- Weekend Reading: Is This The Big One? (graph)
Business Insider:
NY Times:
- Hillary Clinton’s Woes Pushing Joe Biden to Reach Out to Those Who Could Back a Campaign. As Hillary Rodham Clinton’s campaign struggles with sliding poll numbers, Vice President Joseph R. Biden Jr.’s exploration of a presidential candidacy is taking on a new seriousness.
Reuters:
- Exclusive: Dozens of Clinton emails were classified from the start, U.S. rules suggest. For months, the U.S. State Department has stood behind its former boss Hillary Clinton as she has repeatedly said she did not send or receive classified information on her unsecured, private email account, a practice the government forbids. While the department is now stamping a few dozen of the publicly released emails as "Classified," it stresses this is not evidence of rule-breaking. Those stamps are new, it says, and do not mean the information was classified when Clinton, the Democratic frontrunner in the 2016 presidential election, first sent or received it. But the details included in those "Classified" stamps — which include a string of dates, letters and numbers describing the nature of the classification — appear to undermine this account, a Reuters examination of the emails and the relevant regulations has found.
Financial Times:
- China hardly the ideal model for market behaviour. Arguably the most worrying example of misleading pricing is in the country’s equity markets.
Telegraph:
- China syndrome threatens markets meltdown. Evidence from both shipping and factory activity is that the Chinese economy is in trouble.
- Syriza rebels seek 'planned' euro exit as growth fears send tremors through global markets. New Left wing breakaway party seeks to form an anti-bail out minority government to stave off elections on September 20.
Bild-Zeitung:
- ESM's Regling Says Greece Won't Get Money Without Reforms. European Stability Mechanism head Klaus Regling says next Greek government needs to bear in mind reforms must be implemented to get help from partners, citing itv.
Focus:
- German Majority Says Euro Bailout Not in Their Interest. 47% of Germans think government backing for euro-rescue program isn't serving German interests, citing TNS Emnid poll. 43% backing government on euro-rescue action.
