The world economy is in turmoil. Stock exchanges are in panic. The leading financial newspapers are bristling with horrifying titles. “Global Stocks Dive,” blares one. “China Plunges Eight and a Half Percent Triggering Global Rout,” wines another. “Asian Shares Plummet as Shanghai Rout Accelerates,” screams yet another. A brand new Black Monday is already bantered about. Interestingly, there was one such on October 19, 1987, when the Dow Jones Industrial Average lost nearly twenty-two percent in a single day. The drop drove all the major stock exchanges down by more than twenty percent by the end of the month. Where will this particular Black Monday lead the world economy, though? Given the rôle of China’s economy in world affairs at this juncture, chances are that the effect will be much more pronounced than that of any other Black Monday in history. This time around, it is not only the financial world that is affected. Now that China produces a hefty portion of goods and even services consumed around the globe, the effect will be quite palpable. In addition, the country’s political stability is also in question. But my thoughts go to Paris climate talks this December instead. If the financial turmoil persists, the talks are doomed. For what is climate change by comparison with a global economic rout? Peanuts, mere peanuts. By the time the talks start in earnest, everyone’s thoughts will be on current troubles. Bad luck, or what?

Addendum I (August 25, 2015)

Even though the Chinese stocks have fallen for the second day in a row, European stock exchanges appear to be shrugging off the slide. According to the major financial newspapers, the risk appetite has returned this morning. Yesterday’s frantic selling is now seen as overdone. Phew! Investors are only human, to be sure. Which is why it is too early to speculate about the several months leading up to the Paris climate talks. Still, it is good to remember that the economic climate just before the talks will be crucial to their outcome. Albeit slow and bumpy, the recovery from the global financial crisis seven years ago is in progress across both America and Europe, and this makes a meaningful deal in Paris possible. Nay, plausible. A new global crisis would be disastrous in this connection. Fingers crossed.

Addendum II (September 1, 2015)

Well, well. China is still casting its shadow across both America and Europe. More than a week after the tumult has started, it is hard to tell when will it end. Stock exchanges are in panic across the globe. But the analyses I have come across so far do not even mention the Paris climate talks in this connection. Climate change is hardly on anyone’s mind at this juncture. This is precisely what troubles me most about the timing of Black Monday in China. And there are only three months to go…