in china stocks begin to rebound this week from a crash that wiped out $3 trillion in equity after the chinese government took extraordinary emergency measures to save the economy. they slashed interest rates of $300 billion to keep large shareholders from selling their stock for six months. it skyrocketed even though china s economic growth had slowed. china says it will do what it takes. they said many markets were in an unsustainable bubble and the crash was needed to bring the market back to reality. gordon, you ve been saying for years now the chinese economy is not all it s cracked up to be. as it crashed, i was like oh oh, there it is there it is. yeah and certainly what you ve got right now, even though you had the rebound on thursday and friday now the stock markets are not functioning like new markets and the financial system is on the verge of being frozen.
the stock market. even after this massive correction, the market is up 7% in the past year. it s probably going to come back more because it s overvalued. most of these investors never thought they were trading in a real market anyway. the whole reason people have charged in the stock market in recent times is because the real estate bubble has begun to come apart and the government pushed people into the market. what s ironic about this is the stock market collapse which is a big deal is much more of a political event than an economic event. it hurts confidence in the system it does expose to gordon s point, rifts over economic policymaking but this economy is not koomcoming down because of the stock market and probably not coming down at all. if i was on a treadmill at the health club and i didn t see china underneath but i heard just your discussion and we were talking about quality, infrastructure inefficient government, i would think we
just come out of a genocide to introduce new measures they had never seen before. so is any of that happening is this part of why you re suggesting a move away from the euro so greece can respond in its own national context? absolutely because the answer ultimately is growth for the greek economy. the greek economy is 25% smaller than it was a half decade ago, and this is just going to be more flood letting as you re talking about. what they need to do is have a stronger economy so they can start paying pensions. i disagree. these folks are going to keep fighting on the commercial. the bigger problem that may be a bigger mess even than greece. when we come back. simpler faster sleeker earlier fresher harder
seen their wages stagnate while the cost of health care housing, higher education have gone up. that s not tenable. that s a large part of how we ended up in the great recession, how we have the financial unraveling in 2008 with all these people going more to the banks than their how suses were worth. it s not because people bought yachts, yes, there s some of that, but mostly it s because people understood that to get their children educated and in front of doctors when needed and live in a decent place, they would have to borrow. this is a marginal contribution to get into somewhere a more normal economy. but he s not the one who has the power. congress has the power to raise the minimum wage. that s actually i think, what jeb bush should be addressing. i hear you. and this was a week that was odd for me because i felt like such a democrat and republican at the same time. because on the one hand i get this. like absolutely people should make paychecks that actually pay
their politics? they have a political issue that s been going on since 2012. you have a lot of infighting among senior members. you have a break in control. there are all sorts of things going on and now you have a crash where some say was caused by people who didn t like the leader of the country. i think that s ridiculous but you do have this infighting that s going to have political consequences, you re going to see a lot of senior leaders fall because of the problems in the economy. please go ahead. i was going to say, let s not get carried away. china does have fundamental economic problems. its old model, subsidizeing exports, dumping them on world markets, having migrant workers stream to the cities. that s breaking down because the cost of labor is higher. people are commenting about environmental pollution, the land deals, that s part and parcel. but the stock market is not coming to an end. 70% of people are invested in