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CHINA SUCCEEDS IN STABILIZING THE STOCK MARKET [Copy link] 中文

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Post time 2015-7-9 15:12:52 |Display all floors
This post was edited by abramicus at 2015-7-9 15:15

Finally, China succeeded in stabilizing the Shanghai stock market whose composite index rose and plateaued at 6% above yesterday's close, and the Shenzhen stock market, whose index also rose and plateaued at 4% above yesterday's close.

It is good that the rescue did not go overboard with ramping up the gains to double digits in a day, because the lessn of the past is that such rises in stock prices can only be sustained by a public buying up the shares without use of margin loans, and without government intervention.

It is time to realize that the previous attempt to inflate share prices in the past 9 months, in preparation for liberalizing capital accounts that allows foreigner to buy mainland shares, created more problems than the number of problems it purported to solve.  The main problem is that such stratospheric prices cannot be sustained by the retail public.  Like the major bourses of the world, such prices can only be sustained by algorithmic trading backed by liquidity that exceeds the volume of transactions in the stock market by a factor of 2 at the least.  Once tamed, the stock market is no longer as attractive as it once appeared to the inexperienced hand.

It is time to drop these juvenile adventures that do not create real wealth, any more than two people determined to buy and sell to each other can keep ratcheting up the price of any asset, until it is worth more than all the wealth in the world, except that such asset valuations are impossible to replicate in a public auction.

It is time for the CHINA DREAM to focus on the reality that production must always precede and surpass consumption under any model of the economy, and that the job of the state is ensure that production is profitable, first of all, which means that the overvalued exchange rate of the Yuan must come down to 6.50 Yuan/Dollar as soon as possible, to get the factories producing, the workers working, and the working middle class going back to the real estate market to buy homes for their families, all over again, and once had happened all over China, and made her standard of living something to be admired.







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Post time 2015-7-9 15:28:22 |Display all floors
Congratulations, I must say.

Without the need to pull the plug and shutting down the world’s best-known stock exchange.

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Post time 2015-7-9 20:27:24 |Display all floors
No they did not succeed

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Post time 2015-7-9 22:22:24 |Display all floors
drip drip drip....................apres this, le deluge
No, I live above Sunset Plaza, it's a little house I rent and it's a little rundown but has a beautiful view, what about you?

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Post time 2015-7-9 23:13:58 |Display all floors
This post was edited by cd231013 at 2015-7-10 21:30

Each stock market all over the world  is 'working' differently than the world of physics
For example, DAX in Germany shows different features.. Foreigner (mostly Hedge Fund)hold half of the DAX stocks.      Individuals investors hold minuscule part of DAX.

Mainland domestic stock market is surrrounding and accompanied with very dynamic environment(strong Government and Institutions)
China is going own way to stabilize the stock market

This is why the bull market will gradually, slowlly but surely, coming back /moving in orderly path

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Post time 2015-7-11 14:56:34 |Display all floors
China should professionalize the financial services industry by forcing individual investors into mutual funds managed by trained and certified financial planners. The retail investors are too ignorant and too gullible to participate as day traders in thee stock markets of China. Let the pros handle the day trading which is too risky for retail investors.

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Post time 2015-7-11 15:02:52 |Display all floors
There is no doubt that the top leadership of China is able to stabilize the stock market.  But 80% of the population is not invested in the stock market, but they earn their living in the REAL market.  This is why we should not be distracted by the ups and downs of the stock market.  

Instead we must focus on the real market, and ask ourselves, why is all the surplus productive capacity of China not creating the income and wealth that the 80% of the population earns through wages and trade?  The answer is because the Yuan is overvalued, making all Chinese products overpriced in dollars abroad, and also overpriced in yuans at home.  Solving the problem of Yuan devaluation will save the real economy, even if it may not affect the stock market as much.  Yuan devaluation to 6.50 Yuans/Dollar will unleash all the pent up surplus productive capacity and manpower resource of China that is second to none.  Saving the economy requires a different set of measures than what the stock market requires.  

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