China's Stock Market is Failing Fast...

It will be interesting to see how all the millions of peasants who were moved from rural to urban areas to work in the factories react when they are stuck in their concrete shoe boxes with no job and no where to go.

Couple that with a population that is skewed with millions more men than women and you have the very real potential for serious unrest.

originally posted by: AugustusMasonicus

originally posted by: ketsuko
...they could cook the books and hide the nature of their debt.

They have been cooking the books for decades, the double digit growth has a lot of smoke and mirrors fudged into it.

Agreed.

This whole hybrid Capitalist/State Run markets were doomed to fail from the start. I wonder if the IMF would offer rescue packages for them eh?

~Tenth

originally posted by: AugustusMasonicus

originally posted by: tothetenthpower
Realistically no reason, but we all know how fear drives the market.

If he bought a massive amount of our debt he is the one who would need to be fearful for a variety of reasons.

Russia doesn't have to buy the debt, if the Chinese know for sure it has to be sold, a straight exchange or % value of the bonds could be exchanged for natural resource guarantees.

originally posted by: tothetenthpower
This whole hybrid Capitalist/State Run markets were doomed to fail from the start. I wonder if the IMF would offer rescue packages for them eh?

While this is past the correction stage and not an outright crash as of yet (although it could transform to that quite easily) the IMF cannot do much as this is market capital errosion so the main vicitms are the burgeoning Chinese middle class.

originally posted by: EA006
Russia doesn't have to buy the debt, if the Chinese know for sure it has to be sold, a straight exchange or % value of the bonds could be exchanged for natural resource guarantees.

Understood, but that was not really the sentiment of the post, holding a huge amount of debt, however it was acquired, is not exactly great leverage for anyone.

China has lost of third of it's stock value in the last 3 weeks. Around 940 companies have stopped trading (on China's 2 main indices) over the last 3 weeks. China's really worrying financial crash

How Europe has failed to notice (Agit8dChop) is beyond me - how do you not notice the worlds second largest economy tanking by a third?

This has massive global implications, not least of which is massive Chinese investment in Europe (back to how did Europe not notice?). The only positive (long term) is that the Chinese market was hugely bloated and over valued so this will eventually bring it back to more realistic levels - which while true, doesn't help the Global markets in the short term.

a reply to: AugustusMasonicus

It's still relevant.

That's why I added it.

It does look like the Chinese have been suckered in.
It's the ultimate margin call.

a reply to: Flavian

Europe and the u.s know exactly what's going on.

It's end game time.

a reply to: flatbush71

a snip from your quoted source :

...As to the cause of this devastating melt-down, this report continues, PRC experts have stated that “evil” market forces are going short to ruin the Chinese economy, and even suspecting Western-backed investment “predators” of lurking behind the turmoil, with US banking giant Morgan Stanley among the names mentioned.

the poking of the China markets by USA investors (TBTF bankers), the excessive leveraged shorts for creating irrational fear in the stock market is all part of the asymmetric financial warfare by the westerners..

a possible aim is to degrade the Yuan as a possible additional reserve currency this October 20th

another possible aim is to undercut the China Central Bank reputation (while the perception of the western bank empire remains strong)... they (the China Central Bank) are not doing the stock market reaction or lack of effective actions...
NO - the policies are coming from the Central Planning Committee interested mainly with policies of control not the financial/economic/paths to direct the masses thinking & behaviors... massive fail !
(making China an ineffective elephant-in-the-economic front)

still a 3rd possible aim would be to cause a citizens panic as the supply of goods chain gets disrupted and the citizens sell their private coin & PM bars collected over the last decade


the western central banker empire is Not going into a 2nd class position in the world without a death-match fight

originally posted by: EA006
It's still relevant.

Not in the context of who owns it. It does not matter who or how it is acquired, it is not leveragable.

originally posted by: AugustusMasonicus

Understood, but that was not really the sentiment of the post, holding a huge amount of debt, however it was acquired, is not exactly great leverage for anyone.

If you owe the bank $10,000, the bank owns you.

If you owe the bank $100,000,000, you own the bank.

a reply to: Seamrog

Tell me how non-leveragble debt with a fixed conversion date allows you to 'own' the issuer?

a reply to: AugustusMasonicus

Wow, you seem to have a very good knowledge of markets and such Augustus.

Do you mind writing a brief ' this is why this is happening' post in here?

I'm good in finance, but the nuances elude me.

~Tenth

a reply to: AugustusMasonicus

You enjoy arguing - I'm not trying to argue - I was agreeing with your point.

Nevermind.

a reply to: tothetenthpower

Thank you. Most via osmosis through my uncle who manages a hedge fund. Let me see if I get some free time later today, it would need to be well-sourced and composed.

originally posted by: AugustusMasonicus

originally posted by: Rocker2013
America produces very little internally, and you have a consumer economy. When there's nothing to sell, people stop buying...

The United States still manufactuers a tremendous amount of goods and flagging overseas markets, coupled with a stronger dollar, means domestic prodcuers will sell to domestic end users:

This leaves manufacturers dependent on greater demand domestically from consumers. Solid job growth over the past year has flowed into spending on cars and trucks, which should bolster manufacturing. Auto sales rose 2 percent in May compared to the prior year, as people bought 1.64 million cars and trucks, the highest total since July 2005, according to Autodata Corp. Source

I am an engineer and work in manufacturing here in the US and although you are correct about the tremendous amount of goods that the US still manufactures, the biggest problem with a Chinese collapse is with raw materials. A large percentage of the raw materials used in manufacturing here in the US come from China. So, it will definitely affect the US when we are not able to produce our goods because we cannot get the basic raw materials (metals, plastics, pvcs, etc.).

a reply to: AugustusMasonicus

Send me a PM if you do, I'll sticky it to my OP .

~Tenth

originally posted by: Seamrog
You enjoy arguing - I'm not trying to argue - I was agreeing with your point.

Nevermind.

I did not really understand your post then if you were agreeing. Are you saying Russia (or whoever) is 'the bank'? If so, my apologies as we would indeed 'own them'.

a reply to: St Udio

Whilst i understand what you are saying, China's bubble hasn't been caused by the West, it has been caused by the Chinese investors and companies themselves. Every time China has attempted to take control of the issue (gold, housing, construction, etc), it is Chinese citizens that have scuppered their moves.

This was also expected to occur, it was just a matter of when. Quite simply, economists and financial experts (as well as historians) said over a decade ago this would occur. You can't have this much growth and investment without a fall coming. China has gone from medieval peasant society to space age super power in a dramatically short period of time. This caused Britain (and leading Euro powers) problems over several hundred years, the US a problem over a slightly shorter time frame and the Soviets (as was) a problem over a 25-30 year period. For China to manage it in 15-20 years was always going to be problematic and involve periods of pain.

originally posted by: charolais
So, it will definitely affect the US when we are not able to produce our goods because we cannot get the basic raw materials (metals, plastics, pvcs, etc.).

Agreed, however there are secondary and teritiary soucres for these raw goods which will, of course, carry an incurred price increase in the short term. If it is a sustained collapse we will need to source more locally or internally where possible.