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Why the Chinese Stock Market Dropped Again Today

The Chinese stock market tumbled another 5.3% today (Monday), causing China's main index to close at a three-and-a-half-month low.

With no intervention from Chinese authorities to calm jittery markets and steady the yuan, the Shanghai Composite Index dropped 5.3% Monday to 3,016.70. Just six trading days into 2016, China's key benchmark has lost 15%.

Here's what you need to know...


The "Ghost Ship" Leading the Markets Now

China finally hit the fan last week, resulting in the worst opening week of trading in history. The Dow Jones Industrial Average dumped 1,079 points (6.2%) to close at 16,346.45. The S&P 500 collapsed by 122 points (6%) to end the week down at 1922.03, and the Nasdaq Composite Index plummeted by 363.78 points (7.3%) to 4643.63.

The MSCI World Index lost 6% as markets around the world joined in the disaster – led by China, where stocks fell so quickly that regulators shut them down on Thursday after a mere 29 minutes of trading. Then they realized that doing so only made matters worse.

While the major U.S. market averages are flirting with a 10% correction, the reality is that most of the market is already trading in bear market territory. The average S&P 500 stock is down 22.6% according to Bespoke Investment Group.

Here it is...


What a Chinese Stock Market Crash Means for Your Money

Just four days into 2016, Chinese stock markets have already posted a loss of more than 10%. The rout has investors asking what a Chinese stock market crash means for their stocks and their money.

China's stock market stopped trading today (Thursday) after just 29 minutes, ending the shortest trading day in Chinese history. It was the second halt in trading this week after extended dips in stocks.

Here's what the drop in Chinese stocks means for investors in the United States...

Market Crash

Is Another China Stock Market Crash Coming in 2016?

Stock markets in Asia plunged Monday, leaving investors asking if another China stock market crash is coming in 2016.

The Shanghai Composite plunged 6.9%, and the smaller Shenzhen sank 8.2%.

Here's why China's stock markets face some major headwinds and what investors need to expect next...


Meet Faraday Future, Tesla's Newest Rival from China

Faraday Future is an electric vehicle startup set to reveal its concept car at the Consumer Electronics Show next week.

Tech-centric sites are already heralding the company as Tesla's newest rival about to shake up the industry.

Here's what we know about the China-based business that's been keeping itself in secretive "stealth mode"...


What Is the South China Sea Dispute?

A storm that's been brewing in the South China Sea for 200 years now threatens to disrupt the world financial markets.

"The plot in the South China Sea just keeps getting thicker," Money Morning Executive Editor Bill Patalon told readers on Dec. 8. "And riskier – on both sides of the dispute that keeps escalating there."

Seven nations lay claim over the region's resource-rich islands and maritime boundaries: China, Vietnam, Malaysia, the Philippines, Taiwan, Japan, and the tiny sultanate of Brunei.
Exactly what is the South China Sea dispute?

Here's a look at the history of conflict there and the UN laws that govern...


Why Is the South China Sea Important?

Why is the South China Sea important? At first look, the island group seems uninhabitable and worthless – but this observation would be grossly in error.

These islands sit on the edge of the most lucrative fishing area in the South China Sea. They are also on the edge of one of the most oil- and gas-rich areas yet discovered.

And the Spratlys are claimed by no less than six different countries.

"This is definitely a situation you want to watch closely," Money Morning Executive Editor Bill Patalon told readers on Dec. 8. "Any kind of a major 'incident' there will clearly have a big – and negative – impact on the world financial markets."

Here's a look at the irresistible treasures that make ownership of the South China Sea crucial...


China Takes Its "Censor the Internet" Policy to Silicon Valley

China wants the world's nations to censor the Internet exactly as it does.

President Xi Jinping made that abundantly clear in his opening remarks today at the start of China's World Internet Conference.

He has also has a plan to sweeten the deal for Internet companies interested in joining in his plan...


Will Book Cooking in China Cause Another Market Meltdown?

Provincial government officials in northeastern China admitted yesterday that they have been falsifying economic data over the past few years.

Some folks are wondering if we should brace for another market meltdown.

But one seasoned analyst has a very different take on the Red Dragon's news...


Chinese Yuan Could Give the IMF "a Shock It Isn't Prepared For"

On Monday, the Chinese yuan joined one of the most elite clubs on the planet: the International Monetary Fund's Special Drawing Rights basket of reserve currencies.

IMF Managing Director Christine Lagarde said the yuan's inclusion was based on a clear indication of the reforms China has carried out.

Of course, the IMF could be dead wrong.

From a practical position, the IMF expects China will have to make its currency more freely tradable than it is – which, along with being a major exporter, is the other criteria the IMF considers in conferring reserve status on a currency, Money Morning Capital Wave Strategist Shah Gilani said on Monday. But there's a possibility the IMF jumped the gun on this.

Dark horizons lay ahead if the Chinese yuan isn't stable enough to deserve its new global reserve status...