This Chinese collapse is going to take awhile...

The news just keeps getting worse...
Back in July when the Shanghai was starting to erode, China passed a 6 month ban on large shareholders (anyone exceeding 5% ownership in a company's shares) and executives selling listed stocks.
www.bloomberg.com...
That ban expires tomorrow. That means the sell-offs we've seen in China this week have NOT involved China's largest stock players.

Now comes this:
www.cnbc.com...

The China Securities Regulatory Commission has ruled that large shareholders -- those holding 5% or more of shares in listed companies -- won't be allowed to sell more than 1% of total shares outstanding within the next three months, according to a statement on the regulator's website.

The agency also ruled that large shareholders must disclose their share reduction plans to the exchanges 15 trading sessions in advance.

This type of manipulation virtually guarantees that the Shanghai is going to be a slow rolling car wreck for the next few months. It also likely increases the chances of contagion, as a lot of China's largest investors are also major international investors and will be scrambling with those non-Chinese holdings to find liquidity enough to cover their losses in the Chinese market.

2016 is looking to be an extremely rough ride.

a reply to: burdman30ott6

How can a free market function when rules/regulations are put in place that make it not free ?

And what happened to cause all this I thought China was going through a boom thanks to them experience their own version of the industrial revolution ?

a reply to: burdman30ott6

I'm not too concerned. This is just indicative of the natural corrections of the market that need to take place. Global markets and stock values are well above what they should be and this "fake" wealth created does not even exist.

originally posted by: introvert
a reply to: burdman30ott6

I'm not too concerned. This is just indicative of the natural corrections of the market that need to take place. Global markets and stock values are well above what they should be and this "fake" wealth created does not even exist.

You keep up with this same rhetoric. Are you stuck in something you can't get out of, financially?

Don't worry? If you think this just a 'correction' then why are we seeing unprecedented intrusions in that market. (Not that we wouldn't see similar actions in the west if the Chinese allow a 'fast correction'.)

You know damn well this world economy is a house of cards and this is one serious 'wind'.

Personally, I prefer a heads-up from those that see it for what it is rather than avoiding a 'panic'. I liquidated yesterday and near emptied my accounts as well. I'll put them back if it settles out.

Better safe than sorry.

originally posted by: burdman30ott6
The news just keeps getting worse...
Back in July when the Shanghai was starting to erode, China passed a 6 month ban on large shareholders (anyone exceeding 5% ownership in a company's shares) and executives selling listed stocks.
www.bloomberg.com...
That ban expires tomorrow. That means the sell-offs we've seen in China this week have NOT involved China's largest stock players.

Now comes this:
www.cnbc.com...

The China Securities Regulatory Commission has ruled that large shareholders -- those holding 5% or more of shares in listed companies -- won't be allowed to sell more than 1% of total shares outstanding within the next three months, according to a statement on the regulator's website.

The agency also ruled that large shareholders must disclose their share reduction plans to the exchanges 15 trading sessions in advance.

This type of manipulation virtually guarantees that the Shanghai is going to be a slow rolling car wreck for the next few months. It also likely increases the chances of contagion, as a lot of China's largest investors are also major international investors and will be scrambling with those non-Chinese holdings to find liquidity enough to cover their losses in the Chinese market.

2016 is looking to be an extremely rough ride.

But since the western stock exchanges haven't got this slow down, and they are linked to the Chinese economy, does this mean the West will have a far faster train wreck?

a reply to: burdman30ott6

China also has a major real estate bubble going on to.

Do we know if that has popped?

originally posted by: Discotech
a reply to: burdman30ott6

How can a free market function when rules/regulations are put in place that make it not free ?

And what happened to cause all this I thought China was going through a boom thanks to them experience their own version of the industrial revolution ?

China's market is anything but "free." They have manipulation issues that even exceed America's extremely manipulated market.

China was trying to pass the USA as the world's largest economy and market. China is dealing with similar issues to what the US has struggled with for the past 3-4 decades:
1. Increasing domestic wage demands that increase the price of domestic manufacturing
2. Decreasing demand for Chinese exports due to those increasing prices.

They built an economy on the backs of extremely cheap labor and, as that labor has modernized and a middle class formed, they're finding that manufacturers are looking elsewhere for new cheap labor.

originally posted by: anonentity

But since the western stock exchanges haven't got this slow down, and they are linked to the Chinese economy, does this mean the West will have a far faster train wreck?

We have circuit breakers, plunge protection teams, and blatant lies that keep our stock markets from "disorderly" crashes. Our markets operate inversely to what the Chinese market operates: The large shareholders and executives are allowed to bail out first while the folks depending on their stock investments for their future retirement are met with the stock trading version of "microaggressions," small glitches and bumps that conveniently delay those little guys long enough for the connected wealth to get theirs before the prices drop further. If anything, the western collapse will probably be far slower, with a lot of little up cycles that serve a similar purpose to shaking an emptying ketchup bottle to get every last drop out before discarding the empty.

a reply to: burdman30ott6

This Chinese collapse is going to take awhile...
page: 1

What like a half an hour?

a reply to: nwtrucker

You keep up with this same rhetoric.

I rarely talk money on this site. What are you talking about?

Are you stuck in something you can't get out of, financially?

No. I got out in 2007 before the crash. Why someone would invest money in to something that isn't tangible and easily manipulated is beyond me.

Also, I do not subscribe to the doom and gloom scenarios because, as you can see, the minute they get wind of a drastic drop in the markets they will halt trading. They cannot let the market crash beyond a certain point and the ones that will be left hung out to dry is the small investor.

The market will survive, but they will take a chunk of the little guys money in the process. They will recoup their losses after the correction based solely on their buying power.

a reply to: burdman30ott6

China is too big to fail.

We'll bail them out.

(shakes head)

a reply to: introvert

I don't disagree with anything you just posted.

I moved my entire portfolio into non-publicly traded investment shares almost 9 years ago and while It's easy to look at it and say it hasn't made the same caliber of return as it *could* have based solely on the high points in the market, I've sure as hell beat the average when you factor in all the 401K money investors lose when we hit a down cycle.

a reply to: burdman30ott6

The Chinese market has been doing this for a LOOOOOOONG time. Other markets make corrections as well. The NYSE has failsafes and corrections to curb ridiculous selloffs. I understand the Chinese markets do this more, but it is only theory that is is going to cause a world catastrophe anytime soon.

originally posted by: burdman30ott6
a reply to: introvert

I don't disagree with anything you just posted.

I moved my entire portfolio into non-publicly traded investment shares almost 9 years ago and while It's easy to look at it and say it hasn't made the same caliber of return as it *could* have based solely on the high points in the market, I've sure as hell beat the average when you factor in all the 401K money investors lose when we hit a down cycle.

My 401k is doing as expected. The stocks I bought in public companies make moderate gains, if I wait and don't sell or if I sell at a good time, as in the case of Vonage. I actually made money recently as I bought when everyone was selling several months ago.

Take a que from these market manipulators !!!



Trading Places: Sell!

originally posted by: burdman30ott6
a reply to: introvert

I don't disagree with anything you just posted.

I moved my entire portfolio into non-publicly traded investment shares almost 9 years ago and while It's easy to look at it and say it hasn't made the same caliber of return as it *could* have based solely on the high points in the market, I've sure as hell beat the average when you factor in all the 401K money investors lose when we hit a down cycle.

Good idea. I moved almost everything I had to local investments. If I want to know what my money is doing, I can go see for myself.

The media is hyping a lot of hysteria about the Chinese market. It's relatively new and small with hardly any foreign investment. It's basically a casino that wildly fluctuates and doesn't reflect any fundamentals about the Chinese economy.

originally posted by: burdman30ott6

originally posted by: Discotech
a reply to: burdman30ott6

How can a free market function when rules/regulations are put in place that make it not free ?

And what happened to cause all this I thought China was going through a boom thanks to them experience their own version of the industrial revolution ?

China's market is anything but "free." They have manipulation issues that even exceed America's extremely manipulated market.

China was trying to pass the USA as the world's largest economy and market. China is dealing with similar issues to what the US has struggled with for the past 3-4 decades:
1. Increasing domestic wage demands that increase the price of domestic manufacturing
2. Decreasing demand for Chinese exports due to those increasing prices.

They built an economy on the backs of extremely cheap labor and, as that labor has modernized and a middle class formed, they're finding that manufacturers are looking elsewhere for new cheap labor.

This is the same thing that happened with Japan when the World thought Japan was surging past the US and buying up America. This are like industrial bubbles that surge up and then have to switch to a modern economy or die. China should come out all right and they likely will hold on to the number two spot until the next big rise, likely by India.

originally posted by: introvert
a reply to: nwtrucker

You keep up with this same rhetoric.

I rarely talk money on this site. What are you talking about?

Are you stuck in something you can't get out of, financially?

No. I got out in 2007 before the crash. Why someone would invest money in to something that isn't tangible and easily manipulated is beyond me.

Also, I do not subscribe to the doom and gloom scenarios because, as you can see, the minute they get wind of a drastic drop in the markets they will halt trading. They cannot let the market crash beyond a certain point and the ones that will be left hung out to dry is the small investor.

The market will survive, but they will take a chunk of the little guys money in the process. They will recoup their losses after the correction based solely on their buying power.

OK.Makes sense. So when you say your not concerned, it's due to you not having investments? That those small investors you refer to are not of a concern. Got it.

By the way, in three posts on this subject since Monday you've made the same basic comment of no concern/not a big deal/just a correction....

That was the point of my query,

Sweet!

We're that much closer to a better economy!

Is there any way we can help to make it worse?