This week, Volkswagen admitted their cars actually have a device in them that knows when they’re being tested and produces a lower amount of emissions. In actuality, they produce 10 to 40 times higher emissions than allowed by the Environmental Protection Agency. This caused a 23 percent drop in their stocks, and has opened up concerns about Germany’s economy which is largely based on manufacturing cars. CEO Martin Winterkorn resigned today.
Last week, the stock market dropped in response to the announcement that the Federal Reserve might increase interest rates. The interest rate has rested near zero since 2008 in order to help the U.S. economy recover in wake of the recession. The chairwoman of FED, Janet Yellen still expects the central bank to raise interest rates before 2016.
Additionally, the Don Jones has dropped nearly 2,000 points since June. It currently rests at 16,279.
Chinese factory growth is at its lowest point since 2009. While many economists hoped for a revival in the Chinese economy, that hasn’t occurred. As such, other countries who trade very closely with China are concerned that this will lead to a “hard landing” in their economies, as well.
The decline is reportedly due to weak foreign demand and low export prices. This led all of China’s leading stocks to fall drastically over the last couple months.
After elections in Greece, Alexis Tsipras was elected the Prime Minister, which allowed them to start receiving a bailout worth $96 billion. Greece’s current depression-like state is projected to continue declining for the next year. Its unemployment rate is currently 25 percent, and it has the highest poverty rate in the European Union.
The country’s banks and stock exchange were forced to close for several weeks in July, before reopening with a withdrawal-cap.