Chinese Economics Thread

[Jeff Head]

Ultra, you received a warning on July 16th about these very types of post.

Now to post as "good news," a recession or depression on China?

Sorry, but you are now receiving a two-week suspension from SD.

Any posts you try to make will be deleted. If you continue to try before the 2-week period is up, you will receive a permanent ban.

SD is 1st and foremost a Military/Defense forum.

Politics and ideology are specifically warned against in SD's rules. Continued political and ideological posts get warnings, then suspensions, and then banning.

Sorry...but that's the way it is.

DO NOT RESPOND TO THIS MODERATION

 

[Blackstone]

Remember to keep count.

There's more beyond corruption in palace intrigues. If Li Keqiang can't get his arms around the stock market crisis before it turns ugly, Xi might have enough ammo to replace him in his second term as emperor. Li, unlike Xi Jinping, doesn't have the support of the Praetorian Guards.

 

[broadsword]

There's more beyond corruption in palace intrigues. If Li Keqiang can't get his arms around the stock market crisis before it turns ugly, Xi might have enough ammo to replace him in his second term as emperor. Li, unlike Xi Jinping, doesn't have the support of the Praetorian Guards.

You can do a write-up on such intrigues with your imagination. It will be the first time if it happens.

 

[antiterror13]

If i remember correctly many of the stock brands had been barred from sales and the people who owns large amounts of any single brand are barred as well. If and when they are allowed they will no doubt start selling as well. I wonder what will happen then.

I would buy some

 

[SampanViking]

I found this article very informative.

Please, Log in or Register to view URLs content!

There has been a lot said about factors of instability in the market; lack of major Domestic Institutional Investors, Margin Investors, Aggressive Short Selling etc, but this could help put context into the equation and one that I would say would be a uniquely Chinese phenomenon.
Essentially is this the cumulative effect of a young investor class, that have grown up on Online games and Social Networking? If so are they approaching the Investing in the same mindset - Investment as game play, plus investment messages to buy and sell "going viral"?
If so, then the cumulative effect of millions of young investors treating stock transactions like playing a game level or posting a picture of their cat, could seriously explain the bizarre volatility of recent weeks.
The other question is of course, is this a sign of things to come and phenomenon that will come to Western Bourses as well?

 

[delft]

OT
This reminds me of research in the Netherlands about profits on shares as a function of the political affiliation of the punters, about two years ago. It showed that members of a left wing party made more money on investments in shares than those of other parties, presumably because they treated them as investments rather than seeing them to be akin to lottery tickets.

 

[Brumby]

I found this article very informative.

Please, Log in or Register to view URLs content!

There has been a lot said about factors of instability in the market; lack of major Domestic Institutional Investors, Margin Investors, Aggressive Short Selling etc, but this could help put context into the equation and one that I would say would be a uniquely Chinese phenomenon.
Essentially is this the cumulative effect of a young investor class, that have grown up on Online games and Social Networking? If so are they approaching the Investing in the same mindset - Investment as game play, plus investment messages to buy and sell "going viral"?
If so, then the cumulative effect of millions of young investors treating stock transactions like playing a game level or posting a picture of their cat, could seriously explain the bizarre volatility of recent weeks.
The other question is of course, is this a sign of things to come and phenomenon that will come to Western Bourses as well?

What has been will be again, what has been done will be done again; there is nothing new under the sun (Ecclesiastes 1:9). There is nothing unique about the volatility as seen in the Shanghai Composite. It is a common feature in every financial market from currencies, indices, to commodities. Such swings are common whether in 1 minute chart to daily charts because market movements represent a feature common across all instruments and that it reflects greed and fear of human emotions. It is people which move prices and people are motivated by either greed or fear.

If you think the swings in the Shanghai Composite were wild I don't believe you have seen what is unique. The chart below is the daily of the USDCHF currency pair, one of the currency major. This year a one day drop almost sent some of the world's biggest retail brokers bankrupt.

 

[broadsword]

I found this article very informative.

Please, Log in or Register to view URLs content!

There has been a lot said about factors of instability in the market; lack of major Domestic Institutional Investors, Margin Investors, Aggressive Short Selling etc, but this could help put context into the equation and one that I would say would be a uniquely Chinese phenomenon.
Essentially is this the cumulative effect of a young investor class, that have grown up on Online games and Social Networking? If so are they approaching the Investing in the same mindset - Investment as game play, plus investment messages to buy and sell "going viral"?
If so, then the cumulative effect of millions of young investors treating stock transactions like playing a game level or posting a picture of their cat, could seriously explain the bizarre volatility of recent weeks.
The other question is of course, is this a sign of things to come and phenomenon that will come to Western Bourses as well?

You are right to bring up easier access to stock trading via smartphones as a cause for concern.
The people who got burnt by this convenience are mostly the young and inexperienced punters who hope to make a quick buck. Unfortunately, for them as opposed to investors, time is not on their side and they tend to shun the market after getting their fingers burnt.

 

[SampanViking]

Of course volatility is nothing new, but the factors driving it most certainly can be.
Its not particularly useful to compare a Blue Chip main Index Bourse with a highly speculative Forex exchange. Blue Chip markets are expected to slow, steady and reliable, while nobody plays Forex or Commodities unless they are serious adrenaline junkies.

The point I was alluding to in my previous post, is that in the West trading is mostly institutional and private investors operate either indirectly via managed funds or directly through a Broker. In China this is different, as we see small investors buying and selling directly through trader account software and phone apps.
Its a big difference.
Likewise the big market collapses we have seen in the West have always been institution led, but in China it has been led by the mass public, in a market where the Institutional Investors have only now been earmarked for permission to invest.
It is a massive difference., mainly expressed by the difference between professionals reading financial forecasts and none professionals listening to a teenage girl on a video upload who does not think a latest product is pink enough!.

Asia Unhedged also makes another valid comment. If you take out a third of the market by banning margin investors, you reduce the investor pool by a third and prices will fall as a consequence.

 

[Jura The idiot]

it's been some time since I visited this thread

Jul 10, 2015

If the Index had not breached 3742, it could easily rebound to 5100-5200. Given what it is now, I think the target is 4272 or thereabouts provided it can clear 3742.

3633 at the end of the chart:

Please, Log in or Register to view URLs content!