In the future, the big news that will move American markets will increasingly come from China. I wonder what this does to American indexes tomorrow.
China’s Market Rout Is a Double Threat
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Re: China’s Market Rout Is a Double Threat
#42In the future, the big news that will move American markets will increasingly come from China. I wonder what this does to American indexes tomorrow.
Hard to tell with the noise out the Eurozone. Together, the next week will be a bit of a bumpy ride.
Definitely agree with your first statement; maybe you should look towards Australia as an example country that over the past 5 years has been increasingly following Chinese financial markets (Commodities and now property).
Re: China’s Market Rout Is a Double Threat
#43Anti-China hyperbole.
Every pseudo-economist-nerve of mine tells me that one day China inevitably will crash and when it happens it will hurt us all.
But please, enough with the nitpicking in search of ideology affirmation.
Why this is not the crash everybody's waiting for? It's a stock market that is about to crash-out it's volume that was gathered just months prior. Not enough time for most of the worlds shareholders to incorporate Chinese prices into their portfolios.
The Chinese stockmarket's prior boom was mainly driven by the HK-SH stock-market link, allowing foreign investors to buy Chinese stock. Combine that with
- the assumption of risk-takers that the world would flock in gazillions to buy Chinese stock
- and the lack of investment options the ordinary Chinese people have to put their savings in
and you got your self a little bubble going.
But that bust (which is not close to eliminate the prior gains yet, btw) is not the bust we're rightly fearing. Not every economic accomplishment of China can be discredited just by the immorality of its leadership.
Re: China’s Market Rout Is a Double Threat
#44Anti-China hyperbole. Every pseudo-economist-nerve of mine tells me that one day China inevitably will crash and when it happens it will hurt us all. But please, enough with the nitpicking in search of ideology affirmation. Why this is not the crash everybody's waiting for? It's a stock market that is about to crash-out it's volume that was gathered just months prior. Not enough time for most of the worlds shareholde…
That bust could set off a domino chain reaction, which is why the leadership is so desperately and shamelessly trying to prop it up. There aren't many other signs of optimism for the "new normal", and I'm a bit worried about what will happen next.
Re: China’s Market Rout Is a Double Threat
#45China 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…
There's a lot of hyperbole in this post. The graph you link to of debt-to-GDP is actually very similar in China (282), South Korea (286), Australia (274), USA (269), Germany (258), and Canada (247). And for the record, South Korea's is higher than China's according to that graph. China's is more heavily weighted in "non-financial corporate" which is interesting. And the shanghai stock market is not "close to retracin…
sharetea, your comment was killed for some reason.
Re: China’s Market Rout Is a Double Threat
#46China 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…
There's a lot of hyperbole in this post. The graph you link to of debt-to-GDP is actually very similar in China (282), South Korea (286), Australia (274), USA (269), Germany (258), and Canada (247). And for the record, South Korea's is higher than China's according to that graph. China's is more heavily weighted in "non-financial corporate" which is interesting. And the shanghai stock market is not "close to retracin…
I think hysteria would be warranted if the Chinese government were to take a Schumpeter/Hayek/Mellon liquidationist response to the collapse of the market bubble (see the US/Europe circa 1929). Why yes then you would have contagion spreading out into the real economy and a long depression.
I'm thinking not. Instead I the Chinese central bank will inject liquidity again, much to the horror of the WSJ Editorial board who will again sternly warn that such actions, mark their words! come to an bad end!
snort
Re: China’s Market Rout Is a Double Threat
#47vast 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…
"China is to become a superpower, it cannot play by it's own rules."
A superpower by definition is it plays by its own rule.
Re: China’s Market Rout Is a Double Threat
#48To be honest, I spend much more energy studying the economy of my country (USA) than China. In the USA, we will probably have a major market corection to current "bubble-ism" soon, and in my opinion a 20 to 25% drop in prices would deflate bubbles and probably make things more stable. A good thing in the long term, I think. The other good thing about the current problems like we see in China, Greece, etc. is that it…
> hopefully slow down the trend of the elites making massive amounts of money with financial transactions instead of BUILDING THINGS and other productive activities
The Chinese already do this, but many of the projects are white elephants, or infrastructure that isn't useful (as opposed to useful infrastructure, which it still needs in many areas). How many steel plants do you need?
What China really needs is to get consumers consuming. People have to save lots of money to buy an overpriced house or to prepare for health emergencies, they can't afford to buy many things beyond that.
Re: China’s Market Rout Is a Double Threat
#49China 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…
> 1.5-2+X markups they have to pay back home
I'm surprised to hear that, esp. since much of it is actually manufactured there.
Re: China’s Market Rout Is a Double Threat
#50The chart in that article is grossly deceptive. It shows only the last six months of the Shanghai index. Here are the past ten years.[1] That tells you a lot more. For one thing, that index hasn't come back to its 2008 high. That's more significant than the current correction. [1] http://finance.yahoo.com/echarts?s=000001.SS+Interactive#{"r...
The other interpretation (that I stole from ZeroHedge) is that a collapse of the Shanghai index will again correlate with the collapse of the US markets.
Exactly what I thought. The peak now is ~2/3 that right before the 2007 crash.