China's Stock Market is Failing Fast...

China isn't the bastion of financial solidarity as some would like us to believe.

Hong Kong's main stock index plummeted as much as 8.5 per cent on Wednesday as a sell-off in mainland Chinese shares accelerated despite the government's new measures to support the market.

The China rout also battered investor sentiment elsewhere in Asia, with other major markets finishing sharply lower. European benchmarks, though, opened higher and the euro rose as investors there woke up to news that European leaders gave Greece a last-minute chance to avoid a ruinous exit from the euro currency.

The drop in Hong Kong's Hang Seng and the Shanghai Composite came despite China's government on Wednesday telling state-owned companies to buy shares, raising the amount of equities insurance companies can hold and promising more credit to finance trading.

Hundreds of companies have announced a halt to trading in their shares after emergency measures announced last weekend failed to stop a slide that has caused China's main market index to decline by more than 30 per cent since early June.

Source

1000 companies have asked to have their shares halted. Some have had 50% decrease in price so far.

Yikes. I wonder if China will sell any of that US Debt?

~Tenth

a reply to: tothetenthpower

That's a few times now I've heard of u.s debt being sold.

This all seems to be part of a well executed plan, a new American century after all?

a reply to: EA006

Just sell all the debt to Russia, then Putin has got some teeth in his financial threats.

It's certainly going to be an interesting summer in the markets. With Greece potentially exiting the Euro, it's going to be a bit uncertain.

Oil prices are down too.

~Tenth

a reply to: tothetenthpower

Yikes. I wonder if China will sell any of that US Debt?

China currently holds about $1.2 trillion is US debt. Even if all of it was sold and used to prop-up their market, I have doubts that it would be enough. But I am not an economist.

I'm amazed at how slow the US and Europe have been to China's crash this past 15 days.

AMAZED
I was involved in a conference with a number of corporate types in London, Berlin and Paris on Monday, the whole meeting was about finance and current positions but all that was discussed was Greece and how Europe had prepared for it. It wasn't until the final few minutes that someone in Australia had a chance to speak that they raised the issue with China and how badly it will affect everything.

The Europeans sat there silent, one of them had ''heard'' someone talking about China but they were not to fussed over it.

I know there's a timezone different here Tenth, but there's a number of threads on the Chinese collapse that seem to get largely ignored by the US side of this board.

I have a feeling you'll be a little more awake when the weekend comes and China's lost close to 50% value.

originally posted by: tothetenthpower
Just sell all the debt to Russia, then Putin has got some teeth in his financial threats.

Why would that give him 'teeth'? Not like they can call it in, they are long term Treasury Bonds.

a reply to: tothetenthpower

Forget the US debt, there are far bigger problems coming from a collapse of the Chinese economy.

The US govt could cover the problems from this debt, but they can't cover the problems caused to the US retail market when Chinese companies can no longer manufacture, sell or transport goods to the US.

If the Chinese economy does implode (which it will, eventually, whether that's this month or in ten years), US retail will collapse, and take millions of jobs with it.

Then you have the inevitable turmoil within China too, with millions of people reliant on manufacturing and export.

America produces very little internally, and you have a consumer economy. When there's nothing to sell, people stop buying, retailers downsize or close, employees loose their jobs, taxes are not collected, social support requirements increase...

The US debt held by China is a drop in the bucket compared to the potential damage done to the US retail business.

originally posted by: AugustusMasonicus

originally posted by: tothetenthpower
Just sell all the debt to Russia, then Putin has got some teeth in his financial threats.

Why would that give him 'teeth'? Not like they can call it in, they are long term Treasury Bonds.

Realistically no reason, but we all know how fear drives the market.

~Tenth

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

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.

The weaker the Chinese economy, the better chance the U.S. dollar has of staying the world reserve currency a little longer. The IMF will decide on Oct. 20,2015.

I would say that the Chinese are a little hot about the whole mess.

The Ministry of Foreign Affairs (MoFA) is reporting today the Federation has been informed by the State Council of the Peoples Republic of China (PRC) that a de facto “State of War” now officially exists between that Asian nation and the United States of America. According to this report, following the “provisions and protocols” of the 8 May 2015 Russian-Chinese Cyber-Security Agreement that states a signatory to this pact that anticipates the outbreak of hostilities is obligated to immediately inform the other so that “war preparations” needed to protect critical infrastructure can be undertaken, the PRC has informed the Federation that these “conditions now exist”. Leading to this grave war warning from the PRC, this report explains, has been the catastrophic loss of over $3.7 trillion in wealth from Chinese stock markets over the past fortnight that has seen them plunge by over 30% and has led to panic among financial investors and ordinary citizens alike. 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.

a reply to: flatbush71

Source?

I'm not surprised about this really. The warning signs have been there for a long while now, what with their need to build ghost cities that are too expensive for anyone to move into all so they can prop up the construction industry. It was only a matter of time before the bottom fell out. It may cause the world to go into a recession, but I don't think it will be the big one.

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.

Me and you see eye to eye on this, realistically speaking.

But don't you think they would use that as a means to stoke up fear among US citizens? Obviously I doubt China will go that route, but it was an entertaining thought.

originally posted by: tothetenthpower
But don't you think they would use that as a means to stoke up fear among US citizens? Obviously I doubt China will go that route, but it was an entertaining thought.

He could, the gullible and ignorant will fall for it, but we can trot you out on CNBC daily to set the record straight.

Some of us have seen this coming for a while. I'm shocked some are surprised but not surprised that there were so many who are/were in denial over this inevitability.

China has been a rotten house of cards for a while. A lot of their staggering growth has been fueled by state spending, and because of how they are mostly a state-run enterprise, they could cook the books and hide the nature of their debt.

The whole country was a bubble begging to burst. It just wasn't reported that way because it suited the agenda of TPTB to hold China up as the model of what WE should be and aspire to be here in the US. It wouldn't do to point out that the emperor has no clothes if you are trying to establish your fascist nation state here would it?

Additionally, most companies are wary about business in CHina because they have little protections there. The state can pull the rug out from under them at any time for piddling reasons. So there should be limited exposure on the business side.

originally posted by: AugustusMasonicus
a reply to: flatbush71

Source?

one not worth mentioning

China Warns Russia That “State Of War” Now Exists With United States

By: Sorcha Faal, and as reported to her Western Subscribers

The Ministry of Foreign Affairs (MoFA) is reporting today the Federation has been informed by the State Council of the Peoples Republic of China (PRC) that a de facto “State of War” now officially exists between that Asian nation and the United States of America.

a reply to: tothetenthpower

Too bad that great wall is crumbling and it is a good thing it is not higher...

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.