The Telegraph: China losing control as stocks crash despite emergency measures
Margin debt on the Chinese stock market has reached is $1.2 trillion. 'We suspect that it’s a matter of time before banks may have to face the music,' Bank of America says.
Chinese equities have suffered the sharpest one-day crash in eight years, sending powerful tremors through global commodity markets and smashing currencies across East Asia, Latin America and Africa.
The Shanghai Composite index fell 8.5pc despite emergency measures to shore up the market, with a roster of the biggest blue-chip companies down by the maximum daily limit of 10pc. The mood was further soured by news that corporated profits in China are now contracting in absolute terms, falling 0.3pc over the past year.
The violence of the moves unnerved investors worldwide, stirring fears that the Communist Party may be losing control after stoking a series of epic bubbles in property, corporate investment and equities to keep up the blistering pace of economic growth.
WNU Editor: Everyone knew that this bubble was going to burst one day .... and now that it has everyone is now concerned on when will this situation stabilize .... or will it get worse. My prediction .... its going to get worse.
More News On China's Stock Market Crash
China shares continue to slide after historic sell-off -- BBC
China Shares Seesaw in Volatile Trading -- WSJ
China shares gyrate as Beijing scrambles to calm markets -- Reuters
China's stock market continues to free fall -- CNN
China Stocks Extend Rout as Traders Lose Faith in State Support -- Bloomberg
China's stock market is falling again, and it's a huge problem for the government -- VOX
China stock fall: Continued correction or start of economic meltdown? -- ABC News (Australia)
For the last year (actually since the introduction of Quantitative Easing) you could watch the markets and see the behind the scenes action. The markets begin to fall, there's meetings, then the phone call from the meetings and up and away the markets go. Everyone knows it's all a bubble, but it's a case of no one wants to be last one in or out and the governments (central banks etc) which have been running around propping each other up with money borrowed from each other are nearing the end of the line. There is no more money. I will give kudos to the Keynesians and various political factions for their coup of the century in convincing virtually everyone that debt IS money and IS good. There is no more money, except of course in borscht and beavers, somethings are timeless.
ReplyDeleteWhy do I now have a craving for borscht.
ReplyDelete