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China the monster.
alonso
post Posted: Jun 19 2015, 10:38 AM
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In Reply To: triage's post @ Jun 19 2015, 08:18 AM

Staggering stuff triage.



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"The optimist proclaims that we live in the best of all possible worlds. The pessimist fears this is true"

"What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom." Adam Smith
 
triage
post Posted: Jun 19 2015, 08:18 AM
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Want to know how China could pour more concrete in 3 years than was poured in the US in the entire 20th century? Want to know why China has such a voracious appetitie for electricity? Here's some pretty pictures that may help. The article is maining in Russian but the photo and chart captions are in english.

http://aftershock.su/?q=node/311149

I got the link from a fairly safe blogsite so the link should be okay (fingers crossed).

http://marginalrevolution.com/marginalrevo...d-links-16.html



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle

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triage
post Posted: Jun 16 2015, 08:21 AM
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A twofer, not sure whether either article provides THE answer to where China is headed but some comfort reading at least...

the first one is along the lines of history-may-not-repeat-but-sometimes-rhymes ...

https://www.foreignaffairs.com/articles/chi...ade-and-trouble

Just on that, sure the Ming Dynasty collapsed in the 17th century and a relatively small band of foreigners from the north, from Manchuria, were able to invade China and set up the Qing Dynasty, but China remained the largest economy in the world for about another 200 years from then.

and yes sooner or later everything reverts to mean so this next one may not be wrong, merely early...

http://www.bloomberg.com/news/articles/201...of-margin-loans



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle
 
early birds
post Posted: Jun 15 2015, 10:30 AM
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Yet another move by China’s stockmarket regulators to try and cool the bubbling bourses in Shanghai and Shenzhen, by increasing pressure on margin trading.

It’s the third time in the past couple of months that margin trading has been targeted. Apart from sparking an immediate sell off (especially a couple of Thursday's ago when the markets plunged 6.5%), the moves by China’s Securities Regulatory Commission (CSRC) have fallen a bit flat as the markets have rebounded strongly.

The move came as figures were released late last week showing foreign investors have started withdrawning billions of dollars from the Chinese stockmarket.

The Commission has been making rather fitful attempts to lower the bubble like atmosphere in the Chinese markets where leverage is soaring.

Last week the markets in China ended the week up 2.9% - the best performance of any of the world’s major bourses (Australia’s was up 0.8%) and the US was up just 0.1%.

So the reaction today and over the rest of this week to the announcements of last Saturday from the CSRC will tell us a lot about the bubble-like nature of Chinese investor sentiment.

The Commission has “asked” securities companies not to help illegal lending to share purchases - a sign that it is certainly happening and is now a major concern

A draft rule was released by the CSRC on Friday night, confines the volume of margin trading conducted by each brokerages to four times their net capital and the Commission demanded that brokerages should make clients fully aware of the risks in this business.

The CSRC said it aimed to strengthen risk management and protect investors' interests.

Any violation including insider dealing and activities that facilitate illegal trading is prohibited, the draft said.

China’s main market in Shanghai has seen its Composite Index surge over 60% so far in 2015 while margin trading also rose high to more than 2 trillion yuan from slightly above 1 trillion yuan at the end of 2014.(That’s getting close to $US400 billion).

News of the new directive came as figures were published in the US showing foreign investors are quitting China’s stockmarket. Figures out on Friday showed that billions of dollars flowed out of emerging market investment funds last week - $US9.3 billion, according to fund tracking group, EPFR. And of that amount, a massive $US7.1 billion were taken out of Chinese share investment funds. That was the biggest withdrawals since the GFC back in 2008 and signals a real turning in attitude to emerging markets and China (there are fears the rise in US interest rates will damage emerging economies).

That was stunning about face by foreign investors - in the three preceding weeks billions had flowed into $US4.6 billion had been pushed into the funds and the Chinese markets by foreigners. It is a stunning reversal of sentiment in such a short time frame.
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those small start up stocks are in a huge bubbles.......but most of large cap still traded in reasonable level.

 
early birds
post Posted: Jun 10 2015, 08:30 AM
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http://www.cnbc.com/id/102745429

saw H share from HK market under performed about 10% to it's shanghai comp last few session.
there might be a short term up side trading for HK market esp Hshare..imho



 
early birds
post Posted: Jun 9 2015, 12:12 PM
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Looking overseas at today's main bit of economic news out of China, consumer inflation eased to 1.2 per cent year-on-year in May, weaker than market expectations, raising concerns about growing deflationary pressures as the economy cools.

Analysts had predicted the index would come in at 1.3 per cent compared with 1.5 per cent the prior month.

The producer price index was unchanged at minus 4.6 per cent in May, the National Bureau of Statistics said, the 38th straight month of decline. The market had expected producer prices to fall 4.5 per cent on an annual basis after a decline of 4.6 per cent the prior month.

"Both CPI and PPI data indicate that tepid domestic and global demand continue to weigh on economic growth, and the country is still facing serious downward pressure and awaiting the government to roll out more policy stimulus to support it," said Hwabo Trus macro strategist Nie Wen in Shanghai.

"However, the chance for the central bank to largely ease monetary policy, including interest rates and RRR cuts, might be low. They are more likely to resort to targeted easing measures in the future.
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i thought they gonna cut RRR after this data. as shanghai comp went over 5100 yesterday, market might think the same thing, if there is no cut then another heart beating sell off to come?? unsure.gif


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triage
post Posted: Jun 6 2015, 08:26 AM
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There are plenty of articles around about the Chinese stock market bubble but, as usual, The Economist's contribution is pithy, comprehensive, and identifies the gist of the matter imo.

http://www.economist.com/news/finance-and-...-goring-concern

As is pointed out in the article this bubble looks a bit like the one they had in 2007 but the big difference this time around is that millions of retail punters are leveraged to the hilt to magnify their profits. When the bubble pops there will be carnage amongst people who cannot imagine the downside of debt.

One point made in the article that I am unsure about however: the article seems to suggest that because the stockmarket is relatively small in China the short term ramifications of it popping may be relatively minor.

QUOTE
The free-float capitalisation of the [Chinese] stockmarket is just about 40% of GDP; in rich countries it is typically more than 100%. ChiNext [China's attempted version of NASDAQ] accounts for less than a tenth of GDP.


but I seem to recall reading that in 1929 the US stockmarket was also a relatively small player in the American financial system and actually only a small proportion of Americans were exposed to the Wall St crash. And yet that crash, its underlying causes, and the inappropriate reactions to it by the authorities triggered a worldwide depression that was only ended by a world war over a decade later. I'm not suggesting that this Chinese bubble will have the same result here, merely that often terrible stampedes are caused by the slightest of issues.



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle

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eshmun
post Posted: Jun 3 2015, 02:42 PM
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In Reply To: eshmun's post @ Jun 3 2015, 02:35 PM

Bingo. Didn't take long to find some reporting. Bloomberg 25 May 2015.

http://www.bloomberg.com/news/articles/201...china-debt-pile

Eshmun




 
eshmun
post Posted: Jun 3 2015, 02:35 PM
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In Reply To: Barra's post @ Jun 2 2015, 05:00 PM

Barra,Something is up with the unsecured interbank lending rates (the SHIBOR rates) in China and I'm sure it isn't pretty.

I'll have a look on the net to see if I can find any commentary. Looks to me like a central bank intervention has occurred since early April on the scale of that which must have happened during the GFC. The chart below could be worthy of a bit of discussion under the Calling the Crash in Equities topic.

Eshmun

Attached File  ONv2.png ( 20.81K ) Number of downloads: 4





 
Barra
post Posted: Jun 2 2015, 09:36 PM
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In Reply To: Barra's post @ Jun 2 2015, 05:17 PM

http://chinadailymail.com/2014/11/22/china...n-indian-ocean/




and cold war




http://chinadailymail.com/2015/05/31/china...rception-tests/




One thing we can guess at is if things do get messy economically then they have some initiatives in place to tackle rally the masses




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