Right-wing Media Blames Kamala Harris for Stock Market Crash, Despite Market Recovery

Global equity markets experienced a significant crash on August 5, now referred to as 'Black Monday,' as the VIX fear gauge reached its highest level since the beginning of the COVID-19 pandemic. The stock market plunge has resulted in the world's 10 richest billionaires losing $45 billion of wealth in a single day. The crash was concentrated among Big Tech oligarchs, with the MAG7 companies (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) losing $600 billion in stock value. This market downturn has raised concerns about the potential for a new financial crisis in the United States [fbfa3c17].

The crash is attributed to several factors, including the unwinding of the yen carry trade and the potential bursting of the AI bubble. Economist Michael Hudson argues that the U.S. economy has been shrinking since 2008 and that the debt-fueled financial sector is impoverishing the real economy. He suggests that the U.S. government is unlikely to be able to re-inflate the stock market bubble, highlighting the vulnerability of the financial sector and the potential for long-term economic consequences [fbfa3c17].

A wave of volatility has swept across global stock markets, disappointing many investors and leaving them pondering the causes and potential outcomes of this financial storm. The sudden decline of U.S. stocks at the end of July and beginning of August led to soaring numbers on the 'fear index,' or the VIX, marking its highest levels since the pandemic. On August 5, 2024, panic spread through the markets as Japan’s Nikkei 225 index plummeted by 12.4%, the sharpest one-day drop since 1987. Korea's main composite index dropped by approximately 8.77%. The Chinese A-share market also recorded declines. The market movements were primarily driven by disappointing U.S. GDP growth numbers and non-farm payroll data, leading to concerns about potential recessionary trends. Some analysts speculate that the recent burst of enthusiasm around artificial intelligence (AI) technology, known for its steep valuations and high-risk trading, may have begun to deflate. Despite the chaos, some markets showed signs of recovery shortly after the initial downturn, with stocks on Wall Street rebounding. The prevailing sentiment remained cautious as investors awaited critical inflation data from the U.S. Consumer Price Index and other figures detailing the health of the American economy. Governments and financial institutions worldwide are under pressure to navigate these unpredictable waters, with calls for more stringent regulations to curb excessive speculation. The events highlight the critical link between traditional markets and digital currencies, as shifts on Wall Street can lead to magnified effects on cryptocurrencies. The question remains: How capable are economic leaders of transitioning from reactive measures to proactive ones, embracing openness and cooperation as guiding principles amid inherent market risks? [40fca721] [b0434bab].

The stock market crash on 'Black Monday' serves as a reminder of the volatility and uncertainty in the global financial markets. It underscores the interconnectedness of various factors, including geopolitical tensions, monetary policy decisions, and market sentiment, that can have a profound impact on stock market dynamics and investor wealth. The crash has far-reaching implications for the U.S. and global economies, as well as geopolitical tensions such as the potential for a war in the Near East and the U.S. losing its presence in the region. It also highlights the concentration of stock ownership, with 93% of stocks in the U.S. held by just 10% of the population. These factors contribute to concerns about the stability of the U.S. economy and the potential for a new financial crisis [fbfa3c17].

While the crash has had significant negative implications, it is important to note that the VIX fear gauge remains below levels historically associated with a crescendo of investor fears. Additionally, the actions of central banks, concerns about China's economy, and the ongoing COVID-19 pandemic all contribute to the delicate balance between optimism and caution in the market [739e37ea].

Despite the crash, some analysts remain cautiously optimistic about the outlook for stocks and bonds. RBC's global equity strategy team predicts a rally in stock prices over the coming months, citing historical data that shows the S&P 500 index has historically gained when the VIX is above 35. They believe now could be the time for investors to go bargain hunting, as the market's preferred barometer of fear, the VIX, peaked at a new post-pandemic high [739e37ea].

The recent turmoil on the world’s leading stock markets caused widespread speculation about a pending economic disaster. In the three weeks from July 16th to August 6th, the S&P 500 index of the New York Stock Exchange lost 7.5% of its value. Some commentators have called for an emergency rate cut by the Federal Reserve. However, Sven R. Larson, an analyst, argues that there will not be a big economic crash or depression unless governments engage in panic-spending, massive tax increases, or start a world war. Larson predicts a recession for 12-18 months, with a weaker recovery in Europe and a brief slowdown in GDP growth in the United States. The recent stock market sell-off is seen as an exaggerated reaction to negative economic news, and Larson argues that stocks are massively over-valued. The S&P500 index is currently valued around 5,000-5,500, which is significantly higher than its value in previous decades. Larson suggests that a long period of slowly declining stock-market values is needed to restore long-term solidity and reduce speculative value in the market [44447345].

The stock market crash has raised concerns about the vulnerability of pension funds and the need to reassess the financialization of pensions and social security. The high levels of financial debt make it difficult to reinflate the stock market bubble, despite potential attempts by the US government to do so. This crash also highlights the need to reevaluate the role of financialization in areas such as real estate and neoliberalism [7408f357].

Wall Street's fear gauge, the Cboe Volatility Index (VIX), has skyrocketed to levels not seen since the onset of the COVID-19 pandemic, reaching 62.27. The surge in unemployment rates triggered the Sahm Rule, indicating a potential recession. The economy added only 114,000 jobs in July, below expectations of 155,000, and the unemployment rate climbed to 4.3%, the highest since October 2021. Economist Greg McBride warns of a possible slowdown or recession in the global economy. The Dow Jones Industrial Average fell more than 1,000 points, reflecting the jittery sentiment on Wall Street. Interest rates are near 23-year highs, causing market players to adjust their strategies. Analysts suggest maintaining vigilance as markets reposition themselves based on incoming data. Long-term perspectives show that markets tend to rebound, but the speed of recovery depends on economic policies, consumer sentiment, and geopolitical factors. Investors are advised to reassess portfolios and prepare for possible recovery strategies [94ce9e80].

The global stock market crash on Monday, August 12, 2024, triggered panic and uncertainty among investors. Concerns over the Chinese economy led to a significant drop in stock prices worldwide. The Malaysian stock market was also affected, with the benchmark index falling by 10%. The crash has raised concerns about the vulnerability of pension funds and the need to reassess the financialization of pensions and social security. It has also highlighted the need for caution and vigilance in the face of volatile market conditions. Central banks and governments have taken measures to stabilize the markets and restore investor confidence. However, the long-term effects of the crash on the global economy remain uncertain [b0434bab].

Prominent right-wing propagandists blamed Vice President Kamala Harris for a global stock sell-off on August 5, but the markets have since recovered. Trump and his media supporters tried to stoke fears of an economic collapse they could blame on Harris. U.S. markets plunged on August 5, and Trump launched the attack, blaming Harris for what he deemed the 'KAMALA CRASH!!!'. Prominent MAGA influencers picked up the critique within minutes. The narrative spread through the right-wing press, and Fox News' biggest stars were desperately trying to blame Harris for the day's stock losses. The markets began their recovery on August 6, and one week later, they were back up near — or above — where they closed the Friday before the supposed 'Kamala Crash' [94830e54].