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Chinese Credit Crisis Crushes Dow

Jeremy Bowman
June 24, 2013

Just as investors were coming to terms with the Fed's announcement last week, Wall Street got rocked again today. This time, China was to blame as the Shanghai Composite fell 5.3 % last night on concerns about a credit crisis across the Pacific. Investors are worried after interbank lending rates there topped 13% last week. Though they eased down to 6.5% today, today's selling was spurred by the Chinese government's decision not to intervene, blaming the problem on poor loan management by banks.

Markets in Europe followed suit as all three major indexes across the Atlantic fell more than 1%. Meanwhile, the Dow Jones Industrial Average