1. #1

    Chinese Stock Market Crash

    http://www.reuters.com/article/us-ch...0UI0CU20160104

    I'm pretty sure everyone realized long ago that the government produced economic information out of China is fraudulent, its like a game of musical chairs where everyone is anxiously looking for an opening to get out. The ban on selling from the prior market crash is about to come off, in which case more shares will be dumped, which will likely result in another crash and another ban.

    The Chinese government is running a massive ponzi scheme with how it funds SOEs (Stated Owned Enterprises), funding trillions in bad debt and keeping it off the books of the state owned banks by transferring it into what are essentially permanent 'bad' banks run and owned by the government but portrayed as public companies. The State uses these SOEs to do things like employ the 300,000 soldiers they just fired from the Chinese army, or build cities that nobody will live in. There was already a great deal of social unrest in China last year due to the economic conditions, and it is likely that this will get worse, especially if the government responds by cracking down. (of course, if the government is unable to even pay its soldiers anymore, it makes you wonder who will be doing the cracking down)

    It will be interesting to see if 2016 is the year when things fall apart in China. The oil markets have been signaling a major problem somewhere in the world's economy, and its a good bet that a large portion of that problem is in Asia.
    Most people would rather die than think, and most people do. -Bertrand Russell
    Before the camps, I regarded the existence of nationality as something that shouldn’t be noticed - nationality did not really exist, only humanity. But in the camps one learns: if you belong to a successful nation you are protected and you survive. If you are part of universal humanity - too bad for you -Aleksandr Solzhenitsyn

  2. #2
    Even though things will go bad for bit, I honestly can't wait to see China get taken down a peg or two because of their fake economy.

  3. #3
    Deleted
    Chinese stocks have moved mostly sideways for the last five years despite US and EU central banks printing money like crazy. It's been obvious that not all is going well, but the mentioned developments on the oil markets have not only been an indicator, but also to a certain extent a cure for what went wrong. Chinese SOEs have been on a buying spree in Europe, gobbling up both infrastructure and small and medium sized enterprises. As of now, the reports of the Chinese economies death seem greatly exaggerated .

  4. #4
    Quote Originally Posted by Ausr View Post
    Even though things will go bad for bit, I honestly can't wait to see China get taken down a peg or two because of their fake economy.
    Why? China is a huge player in the global economy. Something like this would be felt across the world. And if things get really nasty over there, we could well be facing a worse crisis than in 2008.

  5. #5
    Quote Originally Posted by Ausr View Post
    Even though things will go bad for bit, I honestly can't wait to see China get taken down a peg or two because of their fake economy.
    Yup, let's hope a country with 1.350.000.000 inhabitants gets into a crisis for...reasons!

  6. #6
    Quote Originally Posted by Venant View Post
    I'm pretty sure everyone realized long ago that the government produced economic information out of China is fraudulent
    Like with others. Many countries are running out of tricks to show growth where there is none or a lot less then expected.


    The Chinese government is running a massive ponzi scheme with how it funds SOEs (Stated Owned Enterprises), funding trillions in bad debt and keeping it off the books of the state owned banks by transferring it into what are essentially permanent 'bad' banks run and owned by the government but portrayed as public companies.
    You mean just like Federal Reserve schemes after 2008 crash?

    "Bad banks for dumping bad debt" was also widely used in Europe.

  7. #7
    The Unstoppable Force Mayhem's Avatar
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    Quote Originally Posted by Ausr View Post
    Even though things will go bad for bit, I honestly can't wait to see China get taken down a peg or two because of their fake economy.
    Do you think this way about every country with fake economy or just china? Totally unrelated, where are you from?
    Quote Originally Posted by ash
    So, look um, I'm not a grief counselor, but if it's any consolation, I have had to kill and bury loved ones before. A bunch of times actually.
    Quote Originally Posted by PC2 View Post
    I never said I was knowledge-able and I wouldn't even care if I was the least knowledge-able person and the biggest dumb-ass out of all 7.8 billion people on the planet.

  8. #8
    Deleted
    Clearly you don't know Chinese stock market. The volatility of Chinese stock market are hugely bigger than any western stock market and their volume are also dozen times over westerns. Given said, the huge fall and rise like this are simply well expected. The reason are imo two:
    1. Over 80% of the investors in Chinese stock market are individual investors, they don't have enough professional training in finance, they simply treat the stock market as a new version of casino. Therefore, their trading frequency is high and can cause stampede effect when the market falls.
    2. The new developing countries like China or other South Asian countries simply has un-mature and unstable financial system. The government policy, international influence, even undetected rat trading can cause great volatile in the market. As far as I know, today's crash is due to government policy change.

  9. #9
    This worries me much more than any of the situations in the Middle East or Europe, because as others have said what happens in China effects pretty much every person. Can't remember the last time I bought something that wasn't made in China. Their cheap products were likely able to be so cheap due to China's currency manipulation and this drove off a lot of competition, but a sudden scarcity of such goods could be an issue for a lot of impoverished people in this country. I will likely be ok (not in a retail position or a position dependent on retail) but I can see this acting in a domino effect and really hurting stores like Walmart (which employ a lot of people).
    "You have succeeded in life when all you really want is only what you really need"
    ~Vernon Howard

    "The truly rich are those who enjoy what they have"
    ~Yiddish Proverb

  10. #10
    Quote Originally Posted by Shalcker View Post
    You mean just like Federal Reserve schemes after 2008 crash?

    "Bad banks for dumping bad debt" was also widely used in Europe.
    In China, these bad banks have become permanent fixtures that have been around since the 90s. The government is giving bad 'loans' to SOEs as a means of employing people under the SOEs.

    Maybe the Chinese are brilliant, and they have figured out that you can have prosperity by the government just printing limitless amounts of money. Of course, the problem with this is that it is all dependent on the country maintaining a really high rate of growth.

    Large amounts of publicly traded stock may be held by the general population, resulting in wild market swings, similar to the boom/bust markets of early 20th century America. The problem is that the debt market dwarfs the stock market, and there is an enormous amount of bad debt owned by the government through insolvent bank proxies.
    Most people would rather die than think, and most people do. -Bertrand Russell
    Before the camps, I regarded the existence of nationality as something that shouldn’t be noticed - nationality did not really exist, only humanity. But in the camps one learns: if you belong to a successful nation you are protected and you survive. If you are part of universal humanity - too bad for you -Aleksandr Solzhenitsyn

  11. #11
    The Unstoppable Force Mayhem's Avatar
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    Quote Originally Posted by Bonewang-EU-Ragnaros View Post
    Clearly you don't know Chinese stock market. The volatility of Chinese stock market are hugely bigger than any western stock market and their volume are also dozen times over westerns. Given said, the huge fall and rise like this are simply well expected. The reason are imo two:
    1. Over 80% of the investors in Chinese stock market are individual investors, they don't have enough professional training in finance, they simply treat the stock market as a new version of casino. Therefore, their trading frequency is high and can cause stampede effect when the market falls.
    2. The new developing countries like China or other South Asian countries simply has un-mature and unstable financial system. The government policy, international influence, even undetected rat trading can cause great volatile in the market. As far as I know, today's crash is due to government policy change.
    http://www.bloomberg.com/news/articl...under-new-name


    Come again?
    Quote Originally Posted by ash
    So, look um, I'm not a grief counselor, but if it's any consolation, I have had to kill and bury loved ones before. A bunch of times actually.
    Quote Originally Posted by PC2 View Post
    I never said I was knowledge-able and I wouldn't even care if I was the least knowledge-able person and the biggest dumb-ass out of all 7.8 billion people on the planet.

  12. #12
    Quote Originally Posted by Ausr View Post
    Even though things will go bad for bit, I honestly can't wait to see China get taken down a peg or two because of their fake economy.
    Terrible thing to wish for but okay...?

  13. #13
    Scarab Lord TwoNineMarine's Avatar
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    Today will be interesting for our markets. I'm still learning about how all this works. But it's definitely never good when such a big player takes a hit like that.
    "Be polite, be professional, but have a plan to kill everybody you meet.” - General James Mattis

  14. #14
    Legendary! Collegeguy's Avatar
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    Chinese bubble is something people saw coming long ago.

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