China’s Market Rout Is a Double Threat • Hacker News Board

Re: China’s Market Rout Is a Double Threat

#11

Post by PuppyWhirl » Sun, Jul 05, 2015, 10:06 PM UTC

dpweb wrote: post #8

Ignored is the fact that market was up 150% in the preceeding 12 months of its top. It's an extremely volatile market and a large selloff would be expected, probably inevitable. It's still up for 2015. Not exactly a crisis.

As an isolated case I would agree, but I'm still betting that this combined with the eurozone events will be the final straws for reversing investor sentiment to precipitate another large global recession.

The underlying causes of the 08 crash in America were never addressed (consumer debt, real growth), and the Fed's interest rate games and QE only served to force investors into riskier and riskier assets, which only hurt productive real investment. All the valuation and volatility metrics have been screaming louder and louder for a long time now.

Re: China’s Market Rout Is a Double Threat

#12

Post by intrasight » Sun, Jul 05, 2015, 10:11 PM UTC

jpatokal wrote: post #7

The Economist predicted this crash in May, and has a series of good articles about it: http://www.economist.com/blogs/freeexchange/2015/05/chinas-s... China's stockmarket is sufficiently weird to defy most normal analysis though: there are heavy restrictions on who can list and who can invest, plus China in general has lots of money sloshing around looking for a decent place to invest, because the usual mainstays lik…

>there are heavy restrictions And don't forget the fact that short selling was illegal until earlier this year, and even now only a limited number of stocks are allowed to be shorted.

Re: China’s Market Rout Is a Double Threat

#13

Post by olalonde » Sun, Jul 05, 2015, 10:16 PM UTC

dpweb wrote: post #8

Ignored is the fact that market was up 150% in the preceeding 12 months of its top. It's an extremely volatile market and a large selloff would be expected, probably inevitable. It's still up for 2015. Not exactly a crisis.

Not surprising coming from the NYT. They've been China bashing for a long time and that only intensified after getting blocked back in 2012.

Re: China’s Market Rout Is a Double Threat

#14

Post by [deleted] » Sun, Jul 05, 2015, 10:32 PM UTC

PuppyWhirl wrote: post #11

dpweb wrote: post #8

Ignored is the fact that market was up 150% in the preceeding 12 months of its top. It's an extremely volatile market and a large selloff would be expected, probably inevitable. It's still up for 2015. Not exactly a crisis.

As an isolated case I would agree, but I'm still betting that this combined with the eurozone events will be the final straws for reversing investor sentiment to precipitate another large global recession. The underlying causes of the 08 crash in America were never addressed (consumer debt, real growth), and the Fed's interest rate games and QE only served to force investors into riskier and riskier assets, which onl…

[deleted]

Re: China’s Market Rout Is a Double Threat

#15

Post by joosters » Sun, Jul 05, 2015, 10:35 PM UTC

dpweb wrote: post #8

Ignored is the fact that market was up 150% in the preceeding 12 months of its top. It's an extremely volatile market and a large selloff would be expected, probably inevitable. It's still up for 2015. Not exactly a crisis.

It's lost 30% of its value, was that to be expected? Are you saying it won't fall any further? To me, it seems that you are glossing over a large stock market crash.

Talking about it being 'to be expected' is a nonsense. If the market is so predictable, kindly enlighten us about what happens next, rather than being wise in hindsight.

Re: China’s Market Rout Is a Double Threat

#16

Post by marincounty » Sun, Jul 05, 2015, 10:38 PM UTC

yishanl wrote: post #9

sharetea wrote: post #2

China is in deep trouble; it has a total debt to GDP ratio of 282%, the highest compared to the other big gdp countries. ( http://bloom.bg/1evYSQ5 ). The housing bubble has already burst in the 3rd and 2nd tier cities in China, and the 1st tier cities are close to bursting. And the shanghai stock market is close to retracing back to 2000, since the current stock market has a p/e ratio that's 41% higher than that of U…

I think there's a ton of economic incentive for the rich to leave China and move to the US. In fact, I'd argue it's happening now already, regardless of the performance of the Chinese economy. Some observations: - The luxury goods that the rich in China are looking for are much cheaper here in US. The international students I know at school go on insane shopping sprees at the Apple/Sony/Microsoft stores since how "ch…

I don't think anyone will respond out of fear of being labeled a -------? I will only comment on buying realestate in the U.S.? I believe realestate should only be bought by U.S. citizens. Right now all a foreigner needs is a individual tax number, and money. We have no real idea how that foreign money was obtained?

Or, who cares?

http://www.zillow.com/intl/en/foreign-buyers-guide/

Re: China’s Market Rout Is a Double Threat

#17

Post by curiousjorge » Sun, Jul 05, 2015, 10:38 PM UTC

vast majority of Chinese firms trading on the Chinese stock exchange offer no transparency, and with the recent scandals involving phantom companies valued at billions and "anti-corruption" moves is causing sell offs and capital flight.

But this is hardly the concerning part, what is apparent is a loss of market trust in the system from the public and abroad. If China is to become a superpower, it cannot play by it's own rules.

Re: China’s Market Rout Is a Double Threat

#18

Post by matchagaucho » Sun, Jul 05, 2015, 10:42 PM UTC

Could the headline here just as easily be "Chinese stock market drops down to March 2015 levels"?

Re: China’s Market Rout Is a Double Threat

#19

Post by joosters » Sun, Jul 05, 2015, 10:46 PM UTC

jpatokal wrote: post #7

The Economist predicted this crash in May, and has a series of good articles about it: http://www.economist.com/blogs/freeexchange/2015/05/chinas-s... China's stockmarket is sufficiently weird to defy most normal analysis though: there are heavy restrictions on who can list and who can invest, plus China in general has lots of money sloshing around looking for a decent place to invest, because the usual mainstays lik…

An expensive prediction. Sure, they are now right, but the index grew from 4250 at the time of that article to over 5000 before this latest crash. Anyone shorting the market on their prediction would have most likely been wiped out before they could make a profit.

Calling the top of a market is difficult, and to be fair, the Economist hasn't done too badly here. However, you've got to call the bottom too. Will the Economist be able to say if the current market price is now 'correct' or not? Has the bubble burst or is there more to go?

Re: China’s Market Rout Is a Double Threat

#20

Post by yishanl » Sun, Jul 05, 2015, 10:48 PM UTC

marincounty wrote: post #16

yishanl wrote: post #9

Earlier quoted context omitted.

I think there's a ton of economic incentive for the rich to leave China and move to the US. In fact, I'd argue it's happening now already, regardless of the performance of the Chinese economy. Some observations: - The luxury goods that the rich in China are looking for are much cheaper here in US. The international students I know at school go on insane shopping sprees at the Apple/Sony/Microsoft stores since how "ch…

I don't think anyone will respond out of fear of being labeled a -------? I will only comment on buying realestate in the U.S.? I believe realestate should only be bought by U.S. citizens. Right now all a foreigner needs is a individual tax number, and money. We have no real idea how that foreign money was obtained? Or, who cares? http://www.zillow.com/intl/en/foreign-buyers-guide/

Sure. Although I do think if people don't respond out of fear of being labeled, then it's a shame because it is possible to discuss this topic without being portrayed as a xenophobe/racist. A lot are just observations I've heard and seen, especially when I was a chaperone for children from some of China's elite a few years ago.

Interesting on limiting real estate to only citizens. Although I doubt homeowner(s) who are selling care about where the money comes from, especially if it's upfront and comes in cash. And if you look at some of the prices for these townhouses/homes in South Bay suburbs, I imagine it'd be hard to say no.