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Necc0 posted:The NYSE has incredibly tight security giving any state-level hackers very little to work with. If the Chinese had/have any known exploits to get in I doubt they'd burn one just to save face when it doesn't even help them all that much even in the short run. Not saying it's impossible to shut down the NYSE or that the Chinese wouldn't do it, just that the cost/benefit doesn't really add up in this case. Maybe they're trying to save Chinese companies traded on NYSE?
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Jul 8, 2015 19:38
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Logikv9 posted:It was already said before, but this is so interesting and magical to see a crash in progress and a government with essentially unlimited power do anything to stop it. You can't stop bubbles so long as markets exist. Unless they're going to go back to a command economy there's nothing they can do. Passive aggressive bitching and angry statements about hurt feelings have failed them in the end icantfindaname fucked around with this message at 19:54 on Jul 8, 2015 |
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Jul 8, 2015 19:51
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ocrumsprug posted:Has anyone in power thought about just rolling back the servers to June 12 and telling everyone to start over? If not, they should totally try that next. I wouldn't be opposed to a small percentage of those trillions I just saved you. I think this literally happened in a Tom Clancy book.
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Jul 8, 2015 19:54
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sudo rm -rf posted:I think this literally happened in a Tom Clancy book. I still want my money, you hear me China?!?
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Jul 8, 2015 20:00
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So do I have this right that citizens were taking out loans to buy stocks because the government said to. Others that had cash were investing it all in stocks because the government said to. Companies were using their share prices to secure loans as well. And the solution to the bubble bursting is to say you aren't allowed to sell your stock. Isn't a stock that you can't sell kinda just a worthless piece of paper.
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Jul 8, 2015 20:01
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Nintendo Kid posted:2012 due to Hurricane Sandy. And I think NASDAQ was down more recently than that. In today's case, trading in NYSE listed securities continues on other exchanges so the US market isn't really impacted.
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Jul 8, 2015 20:02
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A lot of what's going is a little beyond me but I'm confused as to what Beijing should be doing. Just let the market collapse?
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Jul 8, 2015 20:11
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Well... if you accept that there is a market you have to accept that the market will determine what things sold in the market are worth. The government was more than happy to ride along when people were irrationally borrowing money to plow into stocks that were already well overvalued - this is just the other side of the same coin. The CCP can take steps to limit the damage caused by the collapse but if they try to make a rule that the market can only go up, things sold in the market are no longer worth what the market says they are and, well, there's not much point to it at that stage.
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Jul 8, 2015 20:13
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Raenir Salazar posted:A lot of what's going is a little beyond me but I'm confused as to what Beijing should be doing. Just let the market collapse? That would be preferable to the present course of doubling down by investing the pension fund and sparking panic with sales freezes.
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Jul 8, 2015 20:15
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Raenir Salazar posted:A lot of what's going is a little beyond me but I'm confused as to what Beijing should be doing. Just let the market collapse? At this point, yeah? They should implement a social security / pension system not tied to the stock market so people don't lose their life savings in stocks, but as for the market itself yeah unfortunately
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Jul 8, 2015 20:16
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ocrumsprug posted:Has anyone in power thought about just rolling back the servers to June 12 and telling everyone to start over? If not, they should totally try that next. I wouldn't be opposed to a small percentage of those trillions I just saved you. Good news! they found the backup.
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Jul 8, 2015 20:18
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Its like calvin ball economics where no one knows the rules and the value of everything appears to be some sort of Schrödinger like thought experiment. Just going to keep 
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Jul 8, 2015 20:21
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What the loving poo poo is happening in St. Louis and Seattle that the east coast of China hates so goddamned much? http://map.norsecorp.com/ rex rabidorum vires posted:Its like calvin ball economics where no one knows the rules and the value of everything appears to be some sort of Schrödinger like thought experiment. Just going to keep That's all financial markets, though. What China's doing is "merely" a particularly quintessentially silly example of it.
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Jul 8, 2015 20:34
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Willie Tomg posted:What the loving poo poo is happening in St. Louis that the east coast of China hates so goddamned much? Maps like that tend to use that as a generic "couldn't find its location but it's in the US somewhere" point, since it's one of the closest major metro areas to the geographic center of the contiguous US.
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Jul 8, 2015 20:37
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Willie Tomg posted:What the loving poo poo is happening in St. Louis and Seattle that the east coast of China hates so goddamned much? Boeing?
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Jul 8, 2015 20:44
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Nintendo Kid posted:Maps like that tend to use that as a generic "couldn't find its location but it's in the US somewhere" point, since it's one of the closest major metro areas to the geographic center of the contiguous US. Gotcha.
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Jul 8, 2015 20:47
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cheesetriangles posted:So do I have this right that citizens were taking out loans to buy stocks because the government said to. Others that had cash were investing it all in stocks because the government said to. Companies were using their share prices to secure loans as well. And the solution to the bubble bursting is to say you aren't allowed to sell your stock. Isn't a stock that you can't sell kinda just a worthless piece of paper. An asset still has value even if it's illiquid.
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Jul 8, 2015 20:55
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Vladimir Putin posted:An asset still has value even if it's illiquid. While technically true in the abstract, when talking about markets there's a distinct correlation between liquidity and value. Like I could post dozens of different economics papers that all use this basic 'fact' as a point of departure, just due to the fact that without a bid, value is entirely hypothetical. Like, what is the value of a share of a company with a 100 to 1 P/E ratio and no liquidity at all? Closer to zero than not, I'm afraid.
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Jul 8, 2015 21:09
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Franks Happy Place posted:While technically true in the abstract, when talking about markets there's a distinct correlation between liquidity and value. Like I could post dozens of different economics papers that all use this basic 'fact' as a point of departure, just due to the fact that without a bid, value is entirely hypothetical. Doesn't have to be zero. p/e is a ratio. Depends what the actual numbers of share price and earnings are. As you dial down where p approaches e then you are more into reality, but that doesnt have to be zero unless e is zero.
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Jul 8, 2015 21:22
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TheBuilder posted:Boeing? Bingo.
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Jul 8, 2015 21:33
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Vladimir Putin posted:Doesn't have to be zero. p/e is a ratio. Depends what the actual numbers of share price and earnings are. As you dial down where p approaches e then you are more into reality, but that doesnt have to be zero unless e is zero. This seems pedantic in light of the facts on the ground. I don't think Mr. Banana Cart gives two shits that his Sino E-Forest Tech Company shares aren't technically worthless, seeing as how he is leveraged 20 to 1 and needs to sell something ASAP to meet his margin call. Again, I don't disagree in theory, but practically speaking in a stock exchange, liquidity = value.
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Jul 8, 2015 21:48
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Raenir Salazar posted:A lot of what's going is a little beyond me but I'm confused as to what Beijing should be doing. Just let the market collapse? Yep, pumping a bubble without reforms is a completely pointless endeavour, at the end of the day there has to be some correspondence between stock value and reality. It also makes the inevitable crash even worse, the longer a bubble goes on the more it distorts and fucks up the whole economic system. It's somewhat similar to what is going on in greece right now, cheap loans flooded the economy with money and it was allocated in a completely inefficient and counter-productive manner. Once the tap turns off the whole thing has to return to economic reality, because again : you need a rough correspondence between the productivity / economic output and how much you spend. Why Greece is hosed right now is they took all that money and dumped into a clientalist - based economy (read: buying votes by giving out high paying jobs that do nothing productive). The go-to example everyone knows about is the US in 2007/8. The buildup to the crash caused huge distortions in the economy that are just now being settled. Distortions being things like misallocated capital (people buying AAA securities that were worthless) and labor (people train to work in housing related industries). Once it blows up you now have all these people trained in construction, mortgages, banking, real estate, etc that are now jobless, and a whole bunch of worthless paper. Because the same thing happened: much like stocks need to roughly reflect earnings and countries budgets reflect their productivity, housing needs to be roughly based on the areas average wages. If wages are stagnant while housing explodes in value where is it coming from? Speculation, and it will always eventually correct itself back to reality. We even tried to prop up the stock market - think back to the first time home buyer credit. It kept housing stable for the couple months (year?) the program was going on for and then the market immediately dived again once the money tap was turned off. So all it accomplished was extending the bubble, further making things worse, and burning up a whole bunch of cash without accomplishing a drat thing. China is an extreme case of this and everything they are trying will completely blow up in their face and make things even worse. The time to stop it is before it even happens, once tulips/houses/stocks/whatever get valued at 300x their normal value what are you going to do? You have to let it crash and try to stave off the worst effects (starvation, homelessness) with targeted programs. China is lucky in that they are self sufficient (for the most part) in food, some other staples, and are big enough that other countries will work with them --the problems are going to be that they import 50% of their oil and energy comes from incredibly polluting sources. Greece on the other hand has a much bigger problem on their hands as they need to import most of their basic necessities (particularly food and energy) while being isolated from the world markets. TROIKA CURES GREEK fucked around with this message at 22:18 on Jul 8, 2015 |
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Jul 8, 2015 22:12
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Franks Happy Place posted:While technically true in the abstract, when talking about markets there's a distinct correlation between liquidity and value. Like I could post dozens of different economics papers that all use this basic 'fact' as a point of departure, just due to the fact that without a bid, value is entirely hypothetical. Wouldn't the value of a completely illiquid asset be based on the probability of it becoming liquid in the future times the present expected value of the asset when it becomes liquid? Obviously it's gonna be a bunch of small probabilities times the present expected values at different times, but doesn't it just boil down to people betting that the asset will become liquid and be worth something in the future?
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Jul 8, 2015 22:17
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A GIANT PARSNIP posted:Wouldn't the value of a completely illiquid asset be based on the probability of it becoming liquid in the future times the present expected value of the asset when it becomes liquid? Obviously it's gonna be a bunch of small probabilities times the present expected values at different times, but doesn't it just boil down to people betting that the asset will become liquid and be worth something in the future? Sure, but at that point the value is entirely notional/hypothetical/speculative. The value of a share that doesn't pay dividends, is de-listed under mysterious circumstances, and can't be sold is... well, that's a piece of paper, not a financial instrument. Liquidity is value. Without the ability to convert something into cash, in the context of a financial market, that thing has no value at all. That's the entire premise behind mark-to-market accounting, and it's even explained in the U.S. tax code thusly: "The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts". Markets are like sonar. Each transaction between a buyer and a seller is a 'ping' that establishes the current 'location' (i.e. value) of an item. Without transactions to fix the current price, the 'location' of the share goes to a kind of quantum state. I guarantee you that if you approached one of those 5% equity fat-cats and said, "hey there Mr. Fuerdai, wanna sell me some of your shares off-market for 30% less than their last closing price?", you'd get a lot of interest. Heck, even if you disagree with me on that, you'd have to admit somebody would take the deal at 20%, or 10%, whatever. So right there we've established that the actual value of these locked-in shares is lower than what they were before, and until they are fairly traded on an open market, their value is something between 0% and less-than-100%. They wouldn't be freezing these symbols if that wasn't the case.
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Jul 8, 2015 22:29
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tl;dr, welcome to Schrödinger's Market.
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Jul 8, 2015 22:32
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Franks Happy Place posted:I guarantee you that if you approached one of those 5% equity fat-cats and said, "hey there Mr. Fuerdai, wanna sell me some of your shares off-market for 30% less than their last closing price?", you'd get a lot of interest. Heck, even if you disagree with me on that, you'd have to admit somebody would take the deal at 20%, or 10%, whatever. So right there we've established that the actual value of these locked-in shares is lower than what they were before, and until they are fairly traded on an open market, their value is something between 0% and less-than-100%. They wouldn't be freezing these symbols if that wasn't the case. Freezing those symbols operates under the assumption that the value of the share will be unchanged when they unfreeze them. The authorities are going to be in for a big surprise when the market finishes it's crash in about 6 weeks, and those stocks get relisted at their old P/E of 150+ again.
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Jul 8, 2015 22:33
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ocrumsprug posted:Freezing those symbols operates under the assumption that the value of the share will be unchanged when they unfreeze them. Exactly, the very fact that we all know a bunch of people want to sell and the government won't let them puts their value into question, let alone the fact that as long as they are locked as non-convertible they aren't financial instruments at all.
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Jul 8, 2015 22:35
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Franks Happy Place posted:Exactly, the very fact that we all know a bunch of people want to sell and the government won't let them puts their value into question, let alone the fact that as long as they are locked as non-convertible they aren't financial instruments at all. It does have the added benefit that we could be into the Fall before this crash is finished with. Which is something else that is unique and amazing about this situation.
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Jul 8, 2015 22:38
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I'd love to see the look on FHP's face when he finds out how many options contracts reach delivery.
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Jul 8, 2015 23:51
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icantfindaname posted:You can't stop bubbles so long as markets exist. Unless they're going to go back to a command economy there's nothing they can do. Passive aggressive bitching and angry statements about hurt feelings have failed them in the end You can place impediments in the way of them. Transaction taxes, taxes on nth properties, etc. The bubble would have to be expanding pretty quick to get ahead of that kind of thing.
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Jul 9, 2015 00:11
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Isn't there a way to pop a bubble ahead of time to get a much milder crash? I have no clue about things.
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Jul 9, 2015 00:27
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Poil posted:Isn't there a way to pop a bubble ahead of time to get a much milder crash? I have no clue about things. If you can undermine the value of the asset that's being driven up somehow, sure. Whether that's possible and how to do it would vary from bubble to bubble. edit: VV Oh yeah, you can cut off the supply of cheap credit driving a bubble, too. VideoTapir fucked around with this message at 00:39 on Jul 9, 2015 |
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Jul 9, 2015 00:33
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Poil posted:Isn't there a way to pop a bubble ahead of time to get a much milder crash? I have no clue about things. The recession at the end of Carter's presidency and the Reagan miracle was the Federal Reserve short-circuiting a major recession.
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Jul 9, 2015 00:36
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You know, what they really need to do is start taking out credit on the value of those stocks that have been taken off the market.
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Jul 9, 2015 00:36
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From just under a day ago, and this was before it was made illegal for large holders of stocks to sell, Simon Rabinovitch (of The Economist) tweeted@S_Rabinovitch posted:With so many shares suspended or halted because down by daily limit, just 11% of stocks in China (300 of 2776) are actually tradable now. How do you place a value on something you can't sell?
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Jul 9, 2015 01:42
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Trammel posted:How do you place a value on something you can't sell? Franks Happy Place posted:tl;dr, welcome to Schrödinger's Market.
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Jul 9, 2015 01:47
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  At least they had the common sense to outlaw the drop.
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Jul 9, 2015 02:15
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Trammel posted:From just under a day ago, and this was before it was made illegal for large holders of stocks to sell, Simon Rabinovitch (of The Economist) tweeted Imagine you have a painting done by Picasso when he was at age 3. This painting ultra rare and considered by many tone a window into his developmental phase as an artist. It's considered by many to be worth hundreds of millions of dollars. The market for the paintings absolutely zero because there is a limited number of people with 100 million dollars who want to spend it on a Picasso. Therefore the painting at any time is if extremely high value but highly illiquid. There are simply no buyers. There you go.
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Jul 9, 2015 02:27
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Willie Tomg posted:What the loving poo poo is happening in St. Louis and Seattle that the east coast of China hates so goddamned much? Maybe the St. Louis Cardinals hacked the wrong Reds?
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Jul 9, 2015 02:30
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They are just selling their shares so they can buy Australian property, don't worry.
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Jul 9, 2015 03:56
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