A One Day Stock Market Plunge Of 48%! A Major Financial Crisis In Argentina Is Happening Right Now

A One Day Stock Market Plunge Of 48%! A Major Financial Crisis In Argentina Is Happening Right Now by  for The Economic Collapse Blog

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We are watching a complete and utter financial meltdown unfold in Argentina, and many are concerned that the panic could start spreading elsewhere.  When you go into way too much debt and you just keep devaluing your currency, this sort of thing is inevitably going to happen, and this is why I am endlessly criticizing the path that the United States is currently on.  If we do not reverse course, we will end up just like them.  On Monday, we witnessed the second largest one day stock market decline that we have seen anywhere in the world since 1950.  It is hard to believe, but the most important stock market index in Argentina actually plummeted 48 percent in a single trading session…

The S&P Merval Index plummeted 48% Monday, the second-largest single-day drop in any global stock market since 1950, according to Bloomberg. The Argentine peso also declined, losing 15% of its value against the US dollar Monday and falling further Tuesday to a new low.

This is what a financial implosion looks like, and it wasn’t supposed to happen.  In fact, we are being told that there was only a .006% chance that such a sell-off would take place

There was a 99.994% probability that an event like Monday’s sell-off in Argentina wouldn’t happen.

But it did. And it served to underscore the need for investors to protect against extreme events that look very unlikely but can have outsize impact if they do occur.

As I keep reminding my readers, stocks tend to fall a lot faster than they rise, and when some sort of trigger event causes panic things can escalate rather quickly.

In this case, the trigger event was an election result

So much for the polls. Forgetting the electoral shocks of Donald Trump and Brexit, investors displayed herd-like faith in surveys showing that reform-minded Argentine President Mauricio Macri would run close in an Aug. 11 primary, positioning him for re-election in October. They bid up assets accordingly. The GlobalX MSCI Argentina exchange-traded stock fund (ticker: ARGT) soared 42% in the year to Aug. 9. It lost all that the day after voters behaved the way you’d think voters might in a country afflicted by near-zero growth and near-50% inflation.

Investors had been hoping that Argentine President Mauricio Macri would win re-election, but now that possibility appears to be extremely remote.  In the primary vote, Macri was soundly defeated by Alberto Fernandez…

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Michael Snyder

I am a voice crying out for change in a society that generally seems content to stay asleep.  My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters.  (#CommissionsEarned)  By purchasing those books you help to support my work.  I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I can only allow this to happen if this “About the Author” section is included with each article.  In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished.  I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.