Author: abramicus

SHANGHAI STOCK MARKET DROPS 30% IN THREE WEEKS! [Copy link] 中文

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Post time 2015-7-10 22:21:34 |Display all floors
Revolutionar Post time: 2015-7-10 21:12
chartered accountants can't help you when markets don't follow theory.

Aren't chartered accountants meant to be familiar with practical reality rather than theory ?

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Post time 2015-7-11 14:48:04 |Display all floors
Ladies and gentlemen, let us remind ourselves that the stock market does not represent except a small fraction of the real economy, even if it can mark to market itself by daily speculation to be worth more than the whole world.  When A sells to B a stock X, and B sells to A the same stock X at 5% the price he bought, and A sells again to B the same share of stock X at 5% higher than the price he last bought, the theoretical upper limit of the price of X is Infinite.  At no point does it mean that that one share of stock X is REALLY worth any astronomic amount, even if within the logic of this two-player market, it is worth the wealth of the world, say one quadrillion dollars.  The reality is that if there is no B wiling to buy stock X from A, its price drops to ZERO, in this 2-player market, and that would not mean that the company X is worth zero either.  The stock market is a derivative of the real market, but it is not the real market.  When you own a share of stock X, you cannot claim even one brick from the building of Company X.  The share only entitles you to a dividend per share, and when and if the company is liquidated, a certain cash equity residual - one share or all shares do not equate to the liquidation value of the company even, because the creditors get the liquidation money first, and the shareholders the remainder.

Let us not talk of the stock market as the real economy, because it simply is not.

To help the real economy, the economy must be given the profit incentive to produce, and requires the proper setting of the official exchange rate of the Yuan, above which all products are overpriced abroad in dollars or euros or yens, and also overpriced in Yuans at home, but below which all products become competitively priced in dollars abroad and n yuans at home as well.  The real economy runs on the correct Yuan exchange rate, period.

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Post time 2015-7-11 16:17:24 |Display all floors
Newtown Post time: 2015-7-10 22:21
Aren't chartered accountants meant to be familiar with practical reality rather than theory ?

Chartered accountants deal in numbers........they can't help you in trading and stir fried stocks.



I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Post time 2015-7-11 20:07:53 |Display all floors
Revolutionar Post time: 2015-7-11 16:17
Chartered accountants deal in numbers........they can't help you in trading and stir fried stocks. ...

"Chartered accountants deal in numbers."

Chinese are obsessed with numbers. Could you show me any reports about the drop in the stock exchange that don't feature numbers ? Or when those who do the trading don't use numbers to describe prices, rises and falls, the amounts of shares being bought and sold, margins, rates, percentage points, and the amounts of money being forked out etc. ?

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Post time 2015-7-11 21:02:49 |Display all floors
Newtown Post time: 2015-7-11 20:07
"Chartered accountants deal in numbers."

Chinese are obsessed with numbers. Could you show me any ...

You stir fry stocks based on rumors.


Chartered accountants not so creative and cannot give you the recipe.



I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Rank: 6Rank: 6

Post time 2015-7-11 21:26:20 |Display all floors
abramicus Post time: 2015-7-10 12:29
You said, "If Chinese government sell US dollars (in the US treasury  bond), and buy yuan from the  ...

Why do China central bank need to print yuan to give to those who want to buy or take the US dollar sold by Chinese government owned US dollar treasury bond ?    The US dollar auction system is just to unload excessive China owned treasury bond. China government will receive yuan from Chinese seller of the yuan assets.

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Post time 2015-7-12 00:06:37 |Display all floors
bushier Post time: 2015-7-11 21:26
Why do China central bank need to print yuan to give to those who want to buy or take the US dolla ...

I get it.  You are agreeing with me, actually, by making senseless questions that make your own ideas look senseless as well.  Make my day.

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