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  1. #26
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    China stocks: The financial crisis that has wiped $3 trillion off the stock markets

    While most recent financial news has focused on the crisis currently facing Greece, another disaster is stirring further east that makes Alexis Tsipras's problems look like chicken feed.

    Since the middle of June, the prices of Chinese company shares have fallen by 30 per cent. That amounts to around $3.2 trillion dollars that has been wiped off the stock market in only a few weeks.
    It's hard to make sense of such a huge number, but this figure is higher than the UK's GDP in 2013, a comparatively modest $2.7 trillion.
    The sudden drop in prices came after months of solid growth. Since November last year, Chinese stocks had more than doubled, largely due to small retail investors - 'mum and dad' investors playing the stock market - using borrowed money.
    There are concerns that the Chinese government's response could be partially responsible for the sell-off.


    Acting quickly to prevent a crisis by ordering brokerage firms to keep buying shares, suspending new share offerings, and keeping people from selling shares, the Government may have unintentionally provoked panic, with their large-scale response sending signals to inexpert investors that things are going wrong and it's time to take their money and run.
    According to the BBC, around 80 per cent of investors in Chinese stock markets are small investors - individuals just looking to make a little money on the stock market.
    Last year, the Chinese government, through its media outlets, encourages citizens to start buying more stocks, in an effort to boost the market. The campaign appeared to have an effect, but now it's causing more problems for the market.
    Some commentators worry that these investors largely base their decisions on a herd mentality - and if people's friends and family start selling, it doesn't take much for a domino effect to occur where a lot of these investors start getting out of the market en masse.
    Many Chinese investors are 'mum and dad' investors, buying small amounts of shares, with the aim of making a little money off the stock market. And while the rapid growth of the Chinese stock markets was a source of pride for the government and the nation's financial industry, it could have played a part in the current sell-off. Many investors, seeing the prices of their shares rocket in a fairly short period of time, were happy to take their money and get out once things started getting difficult. Again, as more investors do this and the stock market begins to fall, the effect is amplified.
    Today, Chinese stocks continued to plunge, with CNN reporting that the Shanghai Composite plunged by eight per cent when the market opened this morning.
    In a statement, the China Securities Regulatory Commission said: "At the moment there is mood of panic in the market and large increase in or irrational dumping of shares, causing a strain of liquidity in the stock market."

    Despite the best efforts of these regulators to increase liquidity and restore investor's confidence, stock markets continue to fluctuate wildly, and many companies are suspending their shares, preventing them from being traded amidst the panic.
    As of today, around 1,400 of the 2,800 companies traded in the country have decided to pull their shares to avoid taking damage.
    However, it's a temporary fix, and when they resume trading, their problems could surface again.
    Unless they manage to calm things down, China could be looking at a major downturn after months of massive growth.


    China stocks: The financial crisis that has wiped $3 trillion off the stock markets - Business News - Business - The Independent
    Last edited by bsnub; 09-07-2015 at 04:09 AM.

  2. #27
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    I agree. And I reckon far less than a decade. The demand is there and growth will follow soon.....it just may take a while to get back to current heights.

  3. #28
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    Quote Originally Posted by Horatio Hornblower
    From reports the Russians are hesitantly going the Chinese way,though the Russians are concerned about the investments in former soviet states, and the chances the Chinese may use them for military bases.
    There are those who know and those who don't know, but the most annoying, outspoken and dangerous are those who don't know they don't know .​

  4. #29
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    Yesterdays drop was 30% since June market high...1300 stocks trades frozen by Chinas government. No problems with this market eh...Hong Kong down almost 1,500 points on the day...whew! All those taxi drivers, laundry workers and maids are really taking a beating on their penny stock.

  5. #30
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    Perhaps those who think they know better should know they don't know what they think they know, now toddle off and find the info that you don't know

    Quote Originally Posted by chassamui View Post
    Quote Originally Posted by Horatio Hornblower
    From reports the Russians are hesitantly going the Chinese way,though the Russians are concerned about the investments in former soviet states, and the chances the Chinese may use them for military bases.
    There are those who know and those who don't know, but the most annoying, outspoken and dangerous are those who don't know they don't know .​

  6. #31
    disturbance in the Turnip baldrick's Avatar
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    http://www.aljazeera.com/news/2015/0...012228346.html

    China's market regulator has barred major shareholders and executives of listed companies from selling their shares for the next six months, it said in a statement, the latest government action to stem a slide in the markets.
    these hedge funds are going to take a major haircut - wonder how many will fail because of this ruling - it will just cause more contagion


    Quote Originally Posted by Takeovers
    Anyone who believes this will hurt China in the long run, is delusional
    this is a growing pain that they had to have - unfortunately the rest of the world is going to have to have it with them

    "If the Chinese government needs to use its resources to shore up the share market, the work that it has been doing in supporting jobs and construction will be more limited, so as a result there will be less building and there will be less demand for our commodities like iron ore and copper,"
    http://www.xxx.xxx.xx/news/2015-07-0...t-rout/6605990


    Quote Originally Posted by Seekingasylum
    The return of manufacturing to quality
    not everything manufactured in china is destined for walmart - in my experience they were making international quality industrial equipment 10 years ago

    Quote Originally Posted by Takeovers
    Maybe it gives the West time to breathe and come to our senses on many levels.
    they will move more unskilled manufacturing to africa , only because wages will be cheaper ( an MBAs main claim to fame ) - lots of fabric factories there already

    the west need to export more food to china - not franchises and tricky financial scams
    Last edited by baldrick; 09-07-2015 at 09:41 AM.

  7. #32
    Thailand Expat Black Heart's Avatar
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    And the question is:

    How much more of a drop (if any) and

    2. How may it / will it affect other areas of the world?

  8. #33
    disturbance in the Turnip baldrick's Avatar
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    boon me is going to delete snubbles' thread as there is already another one running

    Last edited by baldrick; 09-07-2015 at 09:44 AM.

  9. #34
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    ^Well here is a post I made, on it, mid deletion.

    A true market showing that stocks, bonds, PMs and currencies go up and down. The Chinese have yet to master the "invisible political" buy/sell.

    Somewhat different in the USA? If the markets show any inclination of dropping mysteriously the markets STOP. From yesterday's "free" market.

    http://www.zerohedge.com/news/2015-0...-all-went-down



    The "Historic NYSE Halt" Post-Mortem: The Shock And Awe When It All Went Down



    "What began as a glitch in pre-market trading turned into the NYSE's longest trading halt since Hurrican Sandy battered the East Coast. The ever-increasing complexity of US equity markets combined with an ever-decreasing pool of greater fools leaves windows open on down days (for it appears these 'glitches' only ever occur on down days) for markets to break. While NYSE traders defended the very market structure they have abhorred in the past as evidence that today was "not a failure," we can't help but find CNBC's Scott Wapner's amusing remark that "if retail investors want low cost liquid trading they are going to have learn to live with it" the perfect post-mortem for a rigged system brimming with confident insiders ever excited to take mom-and-pop's money.

    "Stocks rallied into the open while the NYSE was broken.
    The issues were resolved shortly after the market opened... and stocks then plunged:"





    And later this




    Yes, just turn themselves off. Some say due to cyber attacks, some say due to an "technical" glitch others consider it US Government financial policy.

    But who knows why the NYSE bought Chinese routers?
    A tray full of GOLD is not worth a moment in time.

  10. #35
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    Quote Originally Posted by OhOh
    Yes, just turn themselves off.
    A non event. It was only trading on the floor that was stopped. Computer trading was normal and that is now 90% of the trading volume. It may help end trading on the floor completely. Poor stock brokers getting broke. I will cry for them if I can find the time.
    "don't attribute to malice what can be adequately explained by incompetence"

  11. #36
    disturbance in the Turnip baldrick's Avatar
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    Quote Originally Posted by OhOh
    a rigged system brimming with confident insiders ever excited to take mom-and-pop's money.
    this has been the chinese market also for the last 4-5 years

  12. #37
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    Quote Originally Posted by baldrick
    boon me is going to delete snubbles' thread as there is already another one running
    That bastard!!

  13. #38
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    After Wednesday's collapse, China's Shanghai Composite just logged its largest one-day rise since 2009

    Having thrown everything but the kitchen sink to prop up the nation's faltering stock market, Chinese policymakers have finally had their way, with stocks rallying on Thursday.

    With wide-ranging new rules aimed to curb selling and much of the market in a trading halt, the benchmark Shanghai Composite index put on 5.79%, its largest one-day percentage increase since March 4, 2009. Buying large-cap stocks appears to have propelled the broader market higher, with the Shanghai stock exchange 50 index jumping 6.63%.

    After yesterday's collapse, China's Shanghai Composite just logged its largest one-day rise since 2009 - Business Insider

  14. #39
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    They call it a "dead cat bounce", don't they ?

  15. #40
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    Quote Originally Posted by Takeovers View Post
    Anyone who believes this will hurt China in the long run, is delusional. It may hurt for a few years to a decade. But they will come back stronger than ever.

    Maybe it gives the West time to breathe and come to our senses on many levels.
    i appreciate that is your opinion. just wish it were so. yes the whole world will move on. but a hell of a lot of pain between now and then.

  16. #41
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    i normally buy when the sheepal are panicking. well it looks like a panic. my gut feeling is its a world crash on the side lines. i'd like to get my money out but too late for that. just not put more in. sit back , watch and wait.

  17. #42
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    Quote Originally Posted by lob View Post
    Quote Originally Posted by Takeovers View Post
    Anyone who believes this will hurt China in the long run, is delusional. It may hurt for a few years to a decade. But they will come back stronger than ever.

    Maybe it gives the West time to breathe and come to our senses on many levels.
    i appreciate that is your opinion. just wish it were so. yes the whole world will move on. but a hell of a lot of pain between now and then.

    I don't see where our opinions differ. I just wanted to express that anybody who believes that the China balloon pops and they are back to poverty and insignificance is wrong. No matter how much pain in China or elsewhere China will still be a world economic powerhouse 10 years from now.

    It may not even get that bad. I am not convinced but they may have stemmed the wave already. In that case a few suicides from people who have bought into the bubble using borrowed money is the worst that happens. But that is suicidal anyway. Though they need some corrections. Building whole cities where no one is living is a wasteful remnant of central planning.

  18. #43
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    buy buy buy......

  19. #44
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    lemember...only the wanton know how hot the oil is

  20. #45
    disturbance in the Turnip baldrick's Avatar
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    Quote Originally Posted by Takeovers
    It may not even get that bad
    the real sh1t has not hit the fan yet - all those suspended shares with price to earnings ratios up to 700 cannot be let go yet - when - me lou

    but the share market is just the vanguard

    "As with functionally bankrupt developers, then, the emerging unpayable stock market debts will join the ever-swelling class of Chinese assets that float on the market like those bloated hog carcasses found drifting down the Yangtze some time ago when farmers apparently had not wanted to take responsibility for the diseased, and worthless, herd.
    Chinese economic growth based on 'money created from thin air' - ABC News (Australian Broadcasting Corporation)

  21. #46
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    ^
    As opposed to arriving at a "deserted" island, claiming it "uninhabited" and then shipping convicts to rape the country.

    The Chinese have had a few thousand years of manipulating paper money.

    Breaking news, yet more mysterious "stoppages" at US stock exchanges. It seems if the exceptional "US market" dips a few %, suddenly the markets can't cope.

  22. #47
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    Marc Faber on China equities right now.

    Famously bearish investor Marc Faber says he wouldn't touch Chinese stocks even after their precipitous decline, instead pushing the investment case for Vietnam equities, Hong Kong-listed Macau gaming stocks and gold mining shares.

    "I am a buyer when markets are undervalued and attractive and then I get out relatively early. So we were buyers a year ago in June/July of 2014," Faber, the author of the "Gloom, Boom and Doom Report", said, referring to Chinese equities. "Now, I don't think that Chinese stocks are attractive and I would just stand aside."

    Chinese equities have taken a severe beating in the recent weeks as panic selling gripped the market, but stability appears to have returned after a series of series of government measures to shore up investor confidence. The benchmark Shanghai Composite is down 24 percent from its June 12 peak, but up 21 percent on a year-to-date basis.

    Faber contends that growth in world's second largest economy has "slowed down to trickle", adding that 6-7 percent growth is a "pipe dream."


    Don't touch China stocks, go here instead: Marc Faber
    As of March 15, 2016, I have 97Century Threads.

  23. #48
    disturbance in the Turnip baldrick's Avatar
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    sh1t yourselves

    Chinese stocks have gone into freefall, posting their biggest one-day losses in more than eight years and futures trading is pointing to even bigger falls on Tuesday.
    The Shanghai Composite Index closed down 8.5 per cent at 3,726 and the CSI300 index of the biggest listed companies in Shanghai and Shenzhen plunged 8.6 per cent to 3,819.
    Official figures released by China's national bureau of statistics just before the break showed industrial profits fell 0.3 per cent in June from a year earlier.
    Westpac senior economist Huw Mackay said those figures, combined with a disappointing business survey last week, could have driven investors to exit the market.
    "I think there's been some pent-up selling pressure in that market over the last couple of weeks and it hasn't been released due to the very firm hand that the authorities have been holding over that market, but it all got released today," he said
    Chinese share market plunges to biggest one-day loss in more than eight years - ABC News (Australian Broadcasting Corporation)

  24. #49
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    So what does it all mean in rest of the world terms, rubber prices dropped, for me, 10% today, guess Australia, big miner is in for more shit.
    Do the Chinese start cashing in US treasury bonds, they have a few trillion dollars worth. does that then sink the US dollar.
    Do the world markets then go into fell fall, should I be stocking up on rice.

  25. #50
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    It just means more wealth accumulated in the hands of fewer people and control via austerity. Not the end of the world.

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