US stocks fall, “huge disaster waiting to happen”

Stocks were mixed last week.

Stocks fell in the United States. The Standard & Poor’s 500 fell 1.3 percent last week. The Dow Jones Industrial Average in particular lost 1.8 percent, falling on Friday for a seventh consecutive day to a six-month low.

In contrast, Chinese stocks rose last week. The Shanghai Composite Index rose 3.3 percent. That still left it 27.5 percent below its peak in June though.

European stocks also rose last week. The STOXX Europe 600 rose 0.2 percent.

David Stockman, the former director of the Office of Management and Budget under US President Ronald Reagan, thinks that the US stock market will fall further.

“I think it's pretty obvious that the top is in,” Stockman told CNBC last week.

“The whole global economy since 2008 has been driven forward by this massive investment and construction and borrowing spree in China,” said Stockman. “The point that I'm making is that it's over.”

Stockman also said that the credit-fuelled expansion in the economy driven by the Federal Reserve is over. “We are in a new era,” said Stockman. “It's a huge disaster waiting to happen.”