More bad economic news, coming out of the U.S. this time.
China Daily Mail reports that Chinese companies are pulling out of the American stock market in droves. According to the Daily Mail, small companies and giants alike are pulling their stocks from Wall Street. It could be because Washington is accusing the firms of shady business practices. Or it could be because stocks like those of advertising giant Focus Media are chronically under-valued:
“The withdrawals follow accusations of improper accounting by some companies and a deadlock between Beijing and Washington over whether U.S. regulators can oversee their China-based auditors.
Some Chinese companies say they are pulling out of U.S. markets because a low share price fails to reflect the strength of their business. Withdrawing also eliminates the cost of complying with American financial reporting rules.”
Not that those rules seem to be doing American shareholders any good. Though we’re not sure why anyone would be surprised, CTV is reporting that Facebook shares are now trading at half their original public offering price. Yowch:
“The stock dipped 87 cents, or 4 per cent, to briefly hit $19, just minutes before it closed the trading day at $19.05. Facebook’s shares ended the week down nearly 13 per cent.
Facebook hit the $19 milestone a day after the expiration of a lock-up period that had previously prevented some early investors and insiders from selling their shares. Stakeholders who owned a combined 271 million Facebook shares before Thursday can now sell their holdings.
A breakdown of just how many major Facebook Inc. shareholders sold their stock this week won’t be available until next week at the earliest, when sellers must disclose such transactions.
Facebook’s stock has struggled since the company’s mid-May IPO. It closed its first day of trading barely above its initial offering price of $38. It has been below that level since.”
Ah well. One company is but a drop in the bucket, right?
Wrong. In this terrifying new article, a top financial advisor has joined a growing crowd of experts and analysts predicting a “death spiral” for the American economy.
Published in Monday Morning, the article quotes one Richard Duncan, formerly with the World Bank, as well as colleagues including Laurence Kotlikoff, a former member of President Reagan’s Council of Economic Advisers, Chris Martenson, a pathologist and former VP of a Fortune 300 company, and Dr. Kent Moors, an adviser to 16 world governments on energy issues as well as a member of two U.S. State Department task forces on energy.
The one thing these men have in common is that they are all saying the end could very well be nigh:
“Martenson points to the U.S. total credit market debt as an example of this unnerving pattern.
‘For 30 years – from the 1940s through the 1970s – our total credit market debt was moderate and entirely reasonable,’ he says. ‘But then in seven years, from 1970 to 1977, it quickly doubled. And then it doubled again in seven more years. Then five years to double a third time. And then it doubled two more times after that.
‘Where we were sitting at a total credit market debt that was 158% larger than our GDP in the early 1940s… By 2011 that figure was 357%.’
Dr. Moors warns this type of unsustainable road to collapse can be seen today in our energy, food and water production. All are tightly connected and contributing to the economic disaster that lies directly ahead.”
Well then. Batten down the hatches and start digging your underground nuclear shelters, kids. Looks like it’s going to be a bumpy ride.
Read more on China, France, America and the world beyond in the latest edition of Carnet Atlantique!