January 7, 2016 Last Updated 11:30 am

Chinese stocks tumble for second time in a week, sending European markets sharply down

Morning Brief: Websites continue battle with readers using ad blockers, with one Condé Nast website bringing in a paywall vendor to attract micropayments from web readers

The new year is only four days old and already we have seen two stock market crashes. 2016, it appears, will offer us one hell of a wild ride.

The Shanghai stock exchange opened for Thursday business and could not stay open for a half hour before the index had fallen 7 percent, a level which triggers circuit breakers, stopping trading. The index stands at 3,115.90, down 245.94 on the day, or a drop of 7.32 percent.

Shang-1-6-16There can be no doubt, this is a panic (and few like to use that word unless it absolutely fits).

As European markets opened, investors followed through, driving down stock indexes across the continent. The German DAX fell over 3 percent, and is now down nearly 14 percent from its high in late November. Both the UK’s FTSE 100 and the French CAC 40 were down over 2.7 percent.

US stock market future point to a rough open on Wall Street.

The cause of all this panic is, of course, the slowing Chinese economy. On Monday the markets reacted to news that manufacturing had declined again. But today’s panic appears to be simply a continuation of Monday’s selloff, not a reaction to anything new.

The worry is that the Chinese government is powerless to stop the panic other than continuing to depress the value of the Chinese currency, the renminbi.

“People are worried about whether they are using currency depreciation to stimulate growth,” Steven Sun, head of China strategy and Hong Kong and China equity research at HSBC, told the NYT. “At the end of the day, the question is, do they have control? Everyone is asking that question.”

Update: predictably, Wall Street trading opened sharply down, with the Dow down over 200 points by lunchtime. Not a panic, but not good either if you plan on retiring soon.

With everything else going on in the world, the news that the stock markets are collapsing is not leading many news organizations in Europe this morning, whereas it is the lead or second story in both the NYT and Washington Post.

What is the leading the news elsewhere:

A man wielding a knife was shot dead in front of a Paris police station today, one the one-year anniversary of the Charlie Hebdo attack. The man is described by police as wearing a fake suicide vest.

The Saudis have apparently bombed the Iranian embassy in Yemen’s capitol of Sanaa. The attack, though, created no damage, which calls into question the whole story (how can a war plane bomb something and cause no damage?).


When a print publisher raises the price of their newspaper or magazine it often takes months before the impact of the decision can be seen. But when one does something like launch a paywall the impact can often be seen in the traffic reports fairly quickly.

Putting up a wall that prevents web readers from entering a website when they are using an ad blocker should one of those decisions that can be judged wise or foolish almost immediately. So, we will see just how long websites such as Forbes or GQ go before deciding that maybe it is not such a good idea to push away readers who prefer not to inundated with bad digital advertising.

Forbes has always been one of those sites that likes to put up barriers to its web readers. Even with no ad blocker installed, the reader is first confronted with an intro page with some sort of promotional message on it. I always feel a little guilty for following any link to Forbes knowing that not only will I be confronted with this needless page, but once I get to the story I clicked on I will be presented with the kind of political nonsense Forbes is famous for.

GQ, on the other hand, a Condé Nast property, is doing something new: bringing in a third party vendor to construct a wall. The company, CoinTent, is a paywall company that specializes in micropayments. The company even offers a WordPress plug-in, which I found an interesting product (not that TNM is moving in this direction, mind you).

As I have said many, many times in the past, paywalls have proven success for where the information provided by the publisher has information that the reader finds financially valuable. So, titles such as the WSJ, The Economist, the Financial Times, seem to be benefiting from paywalls. This can then be extended to certain B2B websites where this same idea might work (for instance, if a site offers bid information for contractors). Then, maybe, just maybe, major consumer sites (such as the NYT) might succeed with a paywall – though the jury is still out on that idea (because the loss of digital advertising might be more than the gain in digital subscriptions).

It will be interesting to see those who use ad blockers are willing to turn them off to read Forbes or GQ, or else if the messages given to these readers will lead to losing that readership. No publisher wants to see their traffic numbers tumble, they will turn off these ad blocker walls quickly if they see traffic plummet.

Note: Read the comments on this story, which inspired the news item above. I would think that only those who are most techie would use an ad blocker (and that is not as small a crowd as you might think). But because they chose to install an ad blocker, they are not inclined to stop using it just to access your content but still be confronted with the same ads they tried to avoid in the first place.

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