China Economic Update

Today Shanghai stocks represented by the Shanghai composite index lost 5.8% on the day. China's Shanghai Composite index ended at 2870.63 down 176.34 points from Friday's close. This was the largest percentage decline in one day since November for the Shanghai Composite. In Shenzhen, the main stock index dropped 6.6% to 955.87. Hong Kong's Hang Seng Index fell 3.6%, led by a decline in China-related stocks. Read the whole story here. I reported a few weeks earlier about some of the problems in Chinese economy and urged people to take some profits in Chinese stocks.

As of Friday the Shanghai Composite was up over 100% since the 2008 low (see chart below).


Since the global financial crisis began the Shanghai Composite Index is still down over 50% from its all time high of over 6,000. See Chart Below.



Almost all global markets were down today from Shanghai, to Australia, to London. Many equities around the world were getting overbought particularly in the United States, no wonder the stocks pulled back some today.

Note: Source of both charts was Yahoo Finance.

Germany, France, and Hong Kong Return To Economic Growth

The economy of Hong Kong grew 3.3% in the second quarter. Read here.

Germany and France both grow by 0.3% in the second quarter. Read here.

France and Germany have not run nearly as big of budget deficit as percentage of GDP as the United States.

In the second quarter the U.S. economy contracted. Read about it here.