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China Stock Market Plummets As Sell-Off Continues
#21914629 - 07/08/15 11:51 AM (8 years, 6 months ago) |
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WORLDPOST
China Stock Market Plummets As Sell-Off Continues 4 hours ago | Updated 3 hours ago
JOE McDONALD AP
BEIJING (AP) — China announced a flurry of new moves Wednesday to halt a stock market slide. The result? Another big dive in share prices.
The government told state companies and executives to buy shares, raised the amount of equities insurance companies can hold and promised more credit to finance trading.
Hundreds of companies have halted trading in their stock after emergency measures announced last weekend failed to stop a rout that has dragged down the benchmark Shanghai Composite Index by more than 30 percent since early June.
The Shanghai index lost another 5.9 percent on Wednesday despite the new measures and Hong Kong's Hang Seng index closed down 5.8 percent after diving as much as 8.5 percent earlier in the day.
Greece's debt crisis has unsettled Asian stock markets but the losses in China are driven entirely by internal factors. Beijing fostered a market boom over the past year, but with Chinese economic growth slowing, it had little basis in reality. Prices began collapsing after unrelated changes in banking regulations made investors in the rumor-fueled market suspect the government could withdraw its support. Regulators also tightened lending to stock investors, adding to their fears.
The decline in Chinese stock prices threatens to fuel political tensions and set back Communist Party plans to use financial markets to make China's state-dominated economy more productive. The party wants to encourage stock ownership but small investors whose holdings have plunged in value say they will no longer buy shares.
Little more than a month ago, China's stock market was the best performing in the world. The boom began after state media said last year stocks were cheap, which led investors to believe Beijing would prevent prices from falling. The Shanghai index still is up 70 percent from one year ago but novice investors who piled in just before the peak hold shares that are worth less than they paid.
Financial literacy is limited in a society where the mainland's first communist-era stock exchange opened in Shanghai only in 1990. Brokerages offer classes in trading but a culture of commentators who preach the gospel of low-risk, long-term investing has yet to develop. Many small investors rely on rumors or tips from friends in a market rife with complaints of insider trading and fraud.
"The central government made considerable reputational investment in the rally over the last year, particularly via ample cheerleading from state media," said IHS Global Insight economist Brian Jackson in a report. Official support "is likely to remain extraordinary," he said, but it will be hard to revive flagging investor enthusiasm.
On Wednesday, the Cabinet agency that oversees China's biggest state-owned companies said it had told them to avoid selling shares and to buy more "in order to safeguard market stability."
In a separate order, the securities regulator told directors, executives and senior managers of publicly traded companies who have sold shares in those companies within the past six months to buy them back and said they are barred from selling. It said they are required to buy more if the price falls by more than 30 percent in the next 10 days.
The insurance regulator said the proportion of their assets Chinese insurers are allowed to invest in stocks will be increased to 40 percent from 30 percent. The amount of a single blue-chip company's shares that an insurance company can buy will increase to 10 percent from 5 percent.
The central bank said it will provide "ample liquidity to support stock market stability" through a state-owned company that lends to brokerages to finance share purchases, a practice known as margin lending. The People's Bank of China statement was read on state TV's national midday news.
Chinese authorities have tried to reassure investors the decline is normal following the boom that saw the Shanghai index soar by more than 150 percent beginning in late 2014. The flagship ruling party newspaper, People's Daily, said Monday the economy can maintain steady growth and provide "solid fundamentals" for "healthy development of capital markets."
Jackson, of IHS Global Insight, noted a survey by the Southwestern University of Finance found 8.8 percent of households participated in the stock market in the second quarter of this year, up from 6.1 percent in the first quarter. According to the newspaper China Business News, the latest percentage is the equivalent of 37 million households.
"That confirms that a substantial number of households rushed in just as valuations were peaking, but also that the total exposure of private households in China is relatively low compared to Western countries, where often a third or more participate in equity markets," said Jackson.
Also Wednesday, a group of 21 state-owned brokerages that pledged last weekend to buy blue chip stocks — or shares in major state companies — said they will increase the size of a fund to finance that from 120 billion yuan ($19 billion) to 260 billion yuan ($42 billion).
The pledge helped to boost shares in major banks and other government companies such as PetroChina Ltd., Asia's biggest oil and gas producer. Their prices rose by up to 10 percent on Monday and Tuesday, but shares in smaller companies that are not included in the pledge have fallen.
A state company that provides credit to brokerages said it had injected a total of 200 billion yuan ($32 billion) into five mutual funds to buy shares. It said that would help to support prices of smaller companies because those funds can buy any shares, not just blue chips.
Some 787 companies suspended trading on the exchanges in Shanghai and the southern city of Shenzhen by the end of trading Tuesday, according to China Business News. It said more requested a suspension later, raising the total to more than 1,000 — the equivalent of almost 36 percent of the total of 2,802 companies traded in Shanghai and Shenzhen.
Hong Kong shares in which trading was suspended included Sinopec, China's No. 2 state-owned oil company.
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Re: China Stock Market Plummets As Sell-Off Continues [Re: Adden]
#21915193 - 07/08/15 02:02 PM (8 years, 6 months ago) |
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China is hilarious.
in the past half-year they were all like "oooooh, our market doing very good. we need to make sure bubble no happen. we put limits on margin trading and the number of new accounts that can be created."
---last two weeks---
"anybody can open an account. large banks are going to pump billions into the market to prop it up. you can borrow as much as you want for investing. anybody can open an account, no limits! we're restricting short selling!"
1/3 of chinese shares on the two main indexes have trading halted. the rest are being dumped to get liquidity to cover the margin buys that are tanked.
shit's fucked.
contagion? we'll see~
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Stonehenge
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Re: China Stock Market Plummets As Sell-Off Continues [Re: memes]
#21916614 - 07/08/15 07:45 PM (8 years, 6 months ago) |
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Has it begun already?
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
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nooneman


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Re: China Stock Market Plummets As Sell-Off Continues [Re: Adden]
#21916635 - 07/08/15 07:50 PM (8 years, 6 months ago) |
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Read a couple articles about this. The problem is that the chinese stock market rose something insane like 140% over the past 8 months. Now it's been falling for weeks straight, but it's still up by 70% over last year at this time.
If it went up 140% it should go back down 140% before the correction is complete.
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Re: China Stock Market Plummets As Sell-Off Continues [Re: nooneman]
#21917990 - 07/09/15 03:46 AM (8 years, 6 months ago) |
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Quote:
nooneman said: If it went up 140% it should go back down 140% before the correction is complete.
It won't go all the way back down.
In the end, MOST of China's stock market is made up of retail investors (aka, mom and pop - not Goldman). China's economy has been booming for decades, and more and more of a middle class has been pulling themselves up by their bootstraps (not to mention Asians are known savers). Since people are putting their savings in equities, and since the Chinese have had inherent faith in their government instilled into their psyche, I see the general upward trend (even a generally accelerated upward trend) continuing in the medium- and long-term
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Stonehenge
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Re: China Stock Market Plummets As Sell-Off Continues [Re: memes]
#21918726 - 07/09/15 10:03 AM (8 years, 6 months ago) |
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They managed to stem the drop by draconian measures. Over half the stocks were stopped from trading, owners of large blocks of stock were forbidden to sell and short sellers are threatened with arrest. Also, state owned companies were ordered to buy back their stock.
How long will this crap keep working?
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
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Stonehenge
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Re: China Stock Market Plummets As Sell-Off Continues [Re: Stonehenge] 1
#21920241 - 07/09/15 02:38 PM (8 years, 6 months ago) |
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I also do not believe the ny stock market had a "glitch" when it shut down. Its too much of a coincidence that it happened just as china's market was crashing. They wanted to stem the contagion but it didn't work, stocks went way down the next day.
China meanwhile created a rally out of thin air via ordering companies to buy shares, forbidding most sales and threatening to lock up short sellers. Has the big crash been averted or just put off a little?
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
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Adden

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Re: China Stock Market Plummets As Sell-Off Continues [Re: Stonehenge]
#21920623 - 07/09/15 03:55 PM (8 years, 6 months ago) |
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"Glitch", LOL
I was reading the article to my wife and she broke out laughing.
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geokills
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Re: China Stock Market Plummets As Sell-Off Continues [Re: Stonehenge]
#21921170 - 07/09/15 06:12 PM (8 years, 6 months ago) |
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Quote:
Stonehenge said: They managed to stem the drop by draconian measures. Over half the stocks were stopped from trading, owners of large blocks of stock were forbidden to sell and short sellers are threatened with arrest. Also, state owned companies were ordered to buy back their stock.
How long will this crap keep working?
"The central planners are in control, and I don't suspect they'll be giving up the reigns anytime soon..." - Rick Santelli
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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Stonehenge
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Re: China Stock Market Plummets As Sell-Off Continues [Re: geokills]
#21921297 - 07/09/15 06:46 PM (8 years, 6 months ago) |
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Yes, but preventing people from selling makes them desperate to get out from under. This is taking price fixing to a whole new level. They may find the cure is worse than the disease. But, it will keep the world economy from blowing up for a while.
What happens when the little guys want to cash in and can't?
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
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Stonehenge
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Re: China Stock Market Plummets As Sell-Off Continues [Re: Stonehenge]
#21971040 - 07/20/15 02:39 PM (8 years, 6 months ago) |
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Reports say china is dumping gold. The bears were right, at least in the short term. This means china is doing even worse than we suspected.
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
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Adden

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Re: China Stock Market Plummets As Sell-Off Continues [Re: Stonehenge]
#21971062 - 07/20/15 02:43 PM (8 years, 6 months ago) |
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I figured something happened when I got 5 emails from APMEX this morning for their gold specials.
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Re: China Stock Market Plummets As Sell-Off Continues [Re: Adden]
#21972823 - 07/20/15 08:49 PM (8 years, 6 months ago) |
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Quote:
Dys said: I figured something happened when I got 5 emails from APMEX this morning for their gold specials.
lol i dont even go to kitco anymore; i just gauge the price of PMs by the spam in my inbox, lol
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Re: China Stock Market Plummets As Sell-Off Continues [Re: memes]
#22002829 - 07/27/15 03:51 AM (8 years, 6 months ago) |
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down another 8%+ in monday's trading session.
let the fun continue!
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Re: China Stock Market Plummets As Sell-Off Continues [Re: memes]
#22004843 - 07/27/15 02:31 PM (8 years, 6 months ago) |
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gartman's neutral at best slightly bearish at worst
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Adden

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Re: China Stock Market Plummets As Sell-Off Continues [Re: memes]
#22004869 - 07/27/15 02:36 PM (8 years, 6 months ago) |
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China just put together almost $500 billion in cash to help restore confidence in its stock market, and the country is threatening to arrest stock traders if stock prices keep dropping. It also banned people who own a lot of stock from selling their shares.
Bloomberg posted that 7.6bn USD was just pulled by foreign investors.
Malaysia currencies are at crisis levels.
Biggest drop since 2007.
See how this plays out I guess.
Found this too even if sensational journalism.
"China's main stock index — the Shanghai Composite — dropped more than 30% from mid-June to early July. The Shenzhen market, which is loaded with Chinese tech stocks, lost more than 40%. All told, Chinese stocks lost about $3.9 trillion in value. It looked like the market could be on the verge of a total collapse."
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Stonehenge
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Re: China Stock Market Plummets As Sell-Off Continues [Re: Adden]
#22005750 - 07/27/15 05:38 PM (8 years, 6 months ago) |
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Quote:
Dys said: China just put together almost $500 billion in cash to help restore confidence in its stock market, and the country is threatening to arrest stock traders if stock prices keep dropping. It also banned people who own a lot of stock from selling their shares.
Bloomberg posted that 7.6bn USD was just pulled by foreign investors.
Malaysia currencies are at crisis levels.
Biggest drop since 2007.
See how this plays out I guess.
Found this too even if sensational journalism.
"China's main stock index — the Shanghai Composite — dropped more than 30% from mid-June to early July. The Shenzhen market, which is loaded with Chinese tech stocks, lost more than 40%. All told, Chinese stocks lost about $3.9 trillion in value. It looked like the market could be on the verge of a total collapse."
No wonder they are selling gold and gold is dropping. What will really cause the stuff to hit the fan is if they start massively dumping us treasuries.
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
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Stonehenge
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Re: China Stock Market Plummets As Sell-Off Continues [Re: Stonehenge]
#22019555 - 07/30/15 12:16 PM (8 years, 5 months ago) |
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They are getting desperate now, threatening to arrest those dumping stocks, asking citizens to report those who do and instructing the media to give only positive stories on the market and the economy. Average citizens do not believe it and despite a massive intervention by the govt, the Chinese market remains down.
They have committed some $350B already and its not enough. Do they have enough money to keep it up or will they let things collapse? In any case with their economy cooling and this disaster unfolding, I'm sure they are selling gold and other things to raise cash so I don't see gold going up any time soon. If they start dumping usa treasuries it could get ugly.
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
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Adden

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Re: China Stock Market Plummets As Sell-Off Continues [Re: Stonehenge]
#22019789 - 07/30/15 01:06 PM (8 years, 5 months ago) |
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It already sounds ugly..
What effect(s) could this have on the US stock market?
What effect(s) could happen if they dump US treasuries?
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Corporal Kielbasa


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Re: China Stock Market Plummets As Sell-Off Continues [Re: Adden]
#22051889 - 08/06/15 05:50 AM (8 years, 5 months ago) |
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I been tuned out. But wtf is goin on?!?! Gold just a little over a G and silver under 15?!?!
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