China Stock Market Crash

[ambiambi]

Will this mean more girl come from China to work?

Sydney house price also come down?

[harmony]

Great question brother ambiambi

I cant imagine anything would change, just a lot of people blowing their dough

[AHLUNGOR]

Will this mean more girl come from China to work?

Sydney house price also come down?

The government had interfered and it's now business as usual !

Just those people who played the game with borrowed money or speculating on margins would have some serious burns ！

[AHLUNGOR]

Will this mean more girl come from China to work?

Sydney house price also come down?

The government had interfered and it's now business as usual !

Just those people who played the game with borrowed money or speculating on margins would have some serious burns ！

If you were a WLs in China, you probably won't want to serve these guys !

[harmony]

Haha
The stock market falls, and the Chinese government buys the falling shares to control the market !
I wonder where the money comes to pay for buying all the shares ?
Oh, of course, the working person / tax payer !

Crazy shit

[wilisno]

Haha
The stock market falls, and the Chinese government buys the falling shares to control the market !
I wonder where the money comes to pay for buying all the shares ?
Oh, of course, the working person / tax payer !

Crazy shit
What so funny about it ? This is the basic strategy of all governments around the world, including cash pay-out !

[AHLUNGOR]

Haha
The stock market falls, and the Chinese government buys the falling shares to control the market !
I wonder where the money comes to pay for buying all the shares ?
Oh, of course, the working person / tax payer !

Crazy shit

This is nothing new, the Hong Kong government did this before back in 1998! The HK government has plenty of money and they only purchased the blue chips stocks to prevent the downwards slides. As the Blue chips stock directly link to the Hang Seng Index, so all good after the money was poured in. It's call the Hong Kong Tracker Fund and you can invest in that as well.

[harmony]

"This is the basic strategy of all governments around the world, including cash pay-out"

Are you sure. Do central banks in England, Germany, and even Australia, buy up shares of many blue chip companies, if the sharemarket is falling ??

Its a pretty risky and expensive strategy. Trying to support a collapsing stock market, when the end of the crash is not clear

I doubt this is true
I didnt hear about the central banks on a large scale, buying up shares of many Blue Chip companies, during the Global Financial Crisis 2008, or the Stockmarket Crash of 1987
Many companies went broke in Western economies, and a huge amount of investors lost a lot of money
Central banks dont want to throw in money into a bottomless pit - in economies where market demand and supply ALONE determine price of company stocks

Occasionally the government will step in when a particuarly large company is likely to collapse, such as in the USA when the USA government stepped in to save 1-2 banks from collapsing

But show me the news articles where Western central banks bought up many different blue chip company stocks to support the stock market ???

[wilisno]

"This is the basic strategy of all governments around the world, including cash pay-out"

Are you sure. Do central banks in England, Germany, and even Australia, buy up shares iof many blue chip companies, if the sharemarket is falling ??

Its a pretty risky and expensive strategy. Trying to support a collapsing stock market, when the end of the crash is not clear

I doubt this is true
I didnt hear about the central banks on a large scale, buying up shares of many Blue Chip companies, during the Global Financial Crisis 2008, or the Stockmarket Crash of 1987
Many companies went broke in Western economies, and a huge amount of investors lost a lot of money
Central banks dont want to throw in money into a bottomless pit - in economies where market demand and supply ALONE determine price of company stocks

Occasionally the government will step in when a particuarly large company is likely to collapse, such as in the USA when the USA government stepped in to save 1-2 banks from collapsing

But show me the news articles where Western central banks bought up many different blue chip company stocks to support the stock market ???
Of course I'm sure ! Look around at recent history !

Especially the last global recession, every country was taking similar measures to soften the blow, including cash payments !

If all major industries fall, the country will fall, who's gonna pay tax !

What a government can do depends on the severity of the problem, that's why HongKong only bought the Blue Chips stocks. And also depends on the size of their reserve !

[harmony]

Of course, all governments around the world will spend cash to prevent or lessen an economic recession
This is self evident

But this is not what I said
I had a very specific economic question:

I said, "Do central banks in England, Germany, and even Australia, buy up shares of many blue chip companies, if the sharemarket is falling ??"

The fact is that they do not.

The Chinese government is different. It is attempting to control a market economy with a control system mentality

This is Forbes Magazine, confirming that the Chinese government are contemplating buying up falling shares ...
http://www.businessinsider.com/the-chinese-stock-market-sell-off-may-be-far-from-over-2015-7?IR=T

The Chinese stocks have come under increased focus recently, owing to their recent slide and the subsequent intervention by the Chinese government.
After increasing by about 150% during 2014 to June-2015, the Chinese stocks (as represented by Shanghai Stock Exchange Composite Index) have fallen sharply by around 20-30% since mid-June, from their peak levels seen during 2015.
Panic selling by retail investors caused this sudden fall in the market
As a result, the Chinese government has taken a slew of measures to curb the fall, including restricting the selling of shares by large shareholders, cutting interest rates, freezing new IPO issues, as well as setting up a fund to buy shares.

http://static3.businessinsider.com/image/55a60aa76bb3f7c82aa53fad-1004-692/shanghai%20composite.jpg

I would like to see a report showing any examples of Western economies "setting up funds to buy shares"
Sure, governments spend money, including cash payments to its citizens.
But buying shares during a falling sharemarket, is another thing entirely

Radical, and with the publics money !

[harmony]

My point is that the manipulation of the Chinese stockmarket in the way the Chinese government is attempting, is way beyond what Western developed economies would attempt

http://www.businessinsider.com/the-chinese-stock-market-sell-off-may-be-far-from-over-2015-7?IR=T

"More importantly, the rescue measures by Beijing in using the most extreme administrative measures to intervene in the market could hurt stock price performance in the longer term as those steps represent a huge set back in cultivating a healthy onshore capital market.

“Suspending the trading of a large number of stocks is a major defeat for the market regulator supervisors.
Bullying a number of domestic financial firms and rich individuals into not selling stock and/or purchasing stocks they would not have voluntarily held or bought is a confidence-undermining demonstration that the state will not try to manipulate stock prices.”



Trying to catch falling stocks, and stopping them from hitting the ground, is like trying to catch arrows
Good luck with that
Particularly a national government stepping in and actually trying to buy shares on a large scale, using taxpayers money

[wilisno]

My point is that the manipulation of the Chinese stockmarket in the way the Chinese government is attempting, is way beyond what Western developed economies would attempt

http://www.businessinsider.com/the-chinese-stock-market-sell-off-may-be-far-from-over-2015-7?IR=T

"More importantly, the rescue measures by Beijing in using the most extreme administrative measures to intervene in the market could hurt stock price performance in the longer term as those steps represent a huge set back in cultivating a healthy onshore capital market.

“Suspending the trading of a large number of stocks is a major defeat for the market regulator supervisors.
Bullying a number of domestic financial firms and rich individuals into not selling stock and/or purchasing stocks they would not have voluntarily held or bought is a confidence-undermining demonstration that the state will not try to manipulate stock prices.”



Trying to catch falling stocks, and stopping them from hitting the ground, is like trying to catch arrows
Good luck with that
Particularly a national government stepping in and actually trying to buy shares on a large scale, using taxpayers money

HongKong got out of trouble with that measure, didn't they ?

[harmony]

I dont think there is a precedent worldwide for the degree of intervention by a central bank, that we are currently seeing in China
Hong Kongs central bank, like most modern free market central banks, mainly intervene by adjusting official interest rates, or buy purchasing currency
These are recognised and rational measures to attempt to support an economy during a downturn

But purchasing shares on a grand scale, or legislating for companies to purchase their own shares is a totally different situation

http://howestreet.com/2015/07/china-attempts-to-prop-up-stock-market-after-steep-declines-1929-flashback/
The way China is conducting stimulus is eerily similar to what happened right before the 1929 stock market crash
“A total of 21 of the country’s largest brokerages announced plans to pool funds to buy shares in the market and some large firms such as developer China Vanke announced a 10 billion A-share buyback plan on Monday to boost their company’s shares.”

Bailout attempts of this nature will either fail miserably or produce an even bigger moral hazard bubble with more leverage and speculation.
That the Chinese central bank and brokerages would act as they did is a sure sign of genuine trouble in China’s banking system"


The current financial opinion is that the Chinese market is on the skids, after a long period of significant speculation
Hopefully China stays healthy, for the sake of the world economy, including Australia !!!

[rhinopark]

Governments rarely buy stock just to prop up the stock market. There are easier ways they can limit share market declines via regulatory means. I don't follow China specifically, but internationally the more common techniques are short restrictions (ie preventing someone betting a particular segment of the market - eg banks - will go down, or "up tick rules") and margin tightening (ie requiring brokers to apply more aggressive credit modelling and therefore reducing the amount of borrowed money in the market).

As others have noted, governments are rarely interested in the stock market itself but rather the broader economy or financial system stability. They can achieve a great deal there with monetary policy (including quantitative easing, ie printing money via bond processes), currency policy, fiscal policy (eg $900 cash giveaways here), prudential regulation (eg APRA here), market regulation (eg ASIC here) and systemic guarantees (eg 3 year guarantees for bank deposits up to wholesale investor thresholds circa $1M+). With such a broad range of mechanisms routinely employed it would be fairly absurd (ie unnecessary and ineffective) for a government to actually buy a share from someone! They might be doing it in China for all I know, but it would be pretty surprising.

[harmony]

My point too
No conventional government would want to purchase shares and join in the speculative losses of money !
Particularly since this involves spending and usually losing taxpayers money

But as I have quoted in several financial articles, the Chinese government is attempting unconventional means to control what should be a free market
This includes possibly manipulating the market by buying up shares, amongst other measures

I confirm what I said - any spending of taxpayers money on share speculation is highly risky

[rooter]

The Chinese stock market and indeed the whole economy is quite unique and a complete mystery.
It's not the same as other capitalist markets and economies simply because other big or medium sized economies have democratic governments, free press etc.
China is a totalitarian state so you can't analyse it in the same way you analyse other capitalist economies.
You can't really make any sense of any news from China whether its good or bad, and you can't make any sense of figures whether they are good or bad.

[harmony]

Agreed brother rooter
And good luck to their system

Just as long as we don't sell all our farmland to the totalitarian state, with this free trade agreement with China

The sooner Australia has a proper listing of which rural properties are being sold to which country, and limit foreign purchase of key agricultural properties, the better

[harmony]

Today's news confirms what I posted earlier

It is pure folly for a government to try to influence a free market entity - the stock exchange, and stock prices

Particularly, as was my main point, it is a waste of taxpayers money for any government to be spending money buying up shares in companies whose share price is in freefall !

Anyone still care to defend a government from trying to influence the price of shares by trying to buy up shares to support their prices ?
Exactly as I said, trying to stop share prices from falling excessively, is like trying to stop a falling arrow, by catching it

But enough of what I suggest, this is the latest SMH economic report ...

http://www.smh.com.au/business/markets/china-stocks-fall-as-economic-rout-fears-return-20150727-gilirg.html

China stocks fall as economic rout fears return


27 July 2015

China's stocks have tumbled the most since February 2007, in a sudden late selloff amid concern a three-week rally sparked by unprecedented government intervention is unsustainable.
The Shanghai Composite Index plunged 8.5 per cent to close at 3725.56, shattering the sense of calm that had fallen over mainland markets last week.

http://www.smh.com.au/content/dam/images/g/i/l/o/0/u/image.related.articleLeadwide.620x349.gilirg.png/1437986875845.png


It wasn't immediately clear what caused such a sharp tumble in the afternoon session.
At midday, the two indexes were down about 2.5 per cent.

"Monday's retreat shattered the sense of calm that had fallen over mainland markets last week, raising questions over whether government efforts to prop up prices are viable"

[harmony]

Trying to stop a stampede of buffalo, by pulling out your chequebook ...

http://www.smh.com.au/business/markets/chinas-stunning-sharemarket-rout-stings-global-equities-20150727-gilqyn.html

28 July 2015

The biggest rout in Chinese shares in eight years stoked concerns on Monday over slowing growth in the world's No. 2 economy, knocking down global equities and the prices of key commodities.

Wall Street was down on worries over China's slowing growth, crystallised by a stunning 8.5 per cent fall in shares in Shanghai (http://www.afr.com/markets/china-stocks-fall-as-economic-rout-fears-return-20150727-gilirg) that also rattled equity markets in Europe and Asia.

China's top securities regulator quickly said the government would continue to buy shares to stabilise the stock market as an unprecedented rescue plan already in place appeared to be sputtering

Crazy shit

[Sextus]

It is like "loaning" money to Greece!

[harmony]

"Any intervention by an entity to prop up a stock market or similar will have some serious unintended repercussions"

My point too, Timetogo

Sometimes a command economy just cant control everything and everyone
But a command economy can waste a lot of taxpayers money, using irrational uneconomic control measures

The country wants to have its feet on both sides of the fence - a modern market economy on the one hand, and a command economy on the other

Good luck with that.

Ignore basic economics at the peril of billions of dollars lost down the toilet

Some more basic economics...
When the sharemarket is crashing, the smartest people are those that make it to the exit doors the fastest
Do not hang around and try to keep the sharemarket from crashing
You will end up with the biggest losses after everyone else has left

The party has started when the price of speculative shares has reached ridiculous unsustainable values
The party has ended (and the bubble is about to burst) once even people in the elevator are talking about shares