Article Review #2: David Stockman's Contra Corner

According to Mr. David Stockman, he fears that the global market economy will collapse. Recently in the past couple of weeks, the market has plunged downward and got many to fear we are heading into another recession. Investors are afraid that the economic slowdown in China, represented by a diminished demand in China, was bad news. Coupled with the uncertainty of Fed interest rate hike, this sent the market into a selling frenzy and left many investors fearing a recession. However, some do not see it that way. On CNBC, 3 economists gathered around just to say the economy is fine in America and that China was the real problem. Despite China's efforts to reform their market driven economics, their Shanghai composite sits a well 42% of its June 13 high. To try to turn this around, China gave the yuan exchange rate greater exposure to the market forces. While China appears to be everyone's problem, the business back in the US is also giving investors panic attacks. Alcoa Inc would break itself into two companies, Shell would give up its $7 billion dollar project to drill for oil in the Arctic, and Glencore Plc fell by 31% in London trading. The reason why he suspects an impending market collapse with China is based on what happened with Brazil. We are on the brink of global deflation and the only thing that is holding back recession and market collapse is by the Fed's constant assurance everything is the way it needs to be.