Cultural Imperial posted:

Y'all tripping balls. China had more money than good right now and they will pull through this.

Arglebargle III posted:

People mentioned a bailout for select investors. If state-owned-enterprises and investors backed by state-owned-enterprises, who have nearly unlimited lines of credit with the Bank of China, bought shares at face value while most other trades were suspended... what would you call that? [...]

Fall Sick and Die posted:

I wonder if they've considered putting up some kind of banner, maybe white letters on red? I'm just throwing out ideas.

meristem posted:

Exactly my point - I don't understand the derision in this thread. It's just a bailout at the expense of some people. Additionally, if company directors and upper management are forced to invest in the stocks *and* forbid to sell in the short-term, shouldn't this, in theory, encourage the promotion of a long-term perspective?

Of course, as you say, the real interesting thing right now is, who is selling the stocks those people are forced to buy.

Fojar38 posted:

A market whose activity is literally dictated by the government isn't a market at all. It's a potemkin market that's completely disconnected from economic reality and whose sole purpose is propaganda.

Fojar38 posted:

A market whose activity is literally dictated by the government isn't a market at all. It's a potemkin market that's completely disconnected from economic reality and whose sole purpose is propaganda.

Arglebargle III posted:

But money is still changing hands. You can go on about it being disconnected from economic fundamentals but money is being traded for stocks. Who is getting the money and unloading stock?

rex rabidorum vires posted:

I would think bank of China is supplying the money to certain entities to purchase shares to create a price floor at the expense of say increased lending or increasing the money supply. Whether that then creates an even bigger debt bubble or forces a devaluation of the currency which could in turn increase inflation, who knows. A more amusing thought is the BoC directly buying stocks itself which in theory could expand the money supply devaluing the currency and riding the storm as a holder and maintaining a price floor. Then if/when stability returns the bank can unwind its holding through either direct sales or debt for stock swaps.

Vladimir Putin posted:

That's what the fed did and is still doing with mortgage backed securities and a whole bunch of other securities.

Vladimir Putin posted:

That's what the fed did and is still doing with mortgage backed securities and a whole bunch of other securities.

Jumpingmanjim posted:

Why have you turned bullish all of a sudden? I thought you wanted it all to burn to the ground.

Cultural Imperial posted:

Dude, the proof is in front of you. China managed to halt the slide, to my chagrin.

TheBalor posted:

Isn't this just going to be a giant money pit forever, then? They refuse to let prices slide, so they're going to just subsidize the poo poo out of the market forever.

gently caress, maybe that's why Goldman-Sachs says BUY BUY BUY. That's the kind of no-lose situation they love.

TheBalor posted:

Isn't this just going to be a giant money pit forever, then? They refuse to let prices slide, so they're going to just subsidize the poo poo out of the market forever.

gently caress, maybe that's why Goldman-Sachs says BUY BUY BUY. That's the kind of no-lose situation they love.

quote:

On Sunday, the new graduates of Tsinghua University are set to gather in their smartest attire to celebrate degrees from one of China’s most prestigious institutions, a place that has fostered generations of political leaders. Just after the ceremony starts — according to a written agenda — the graduates must “follow the instruction and shout loudly the slogan, ‘revive the A shares, benefit the people; revive the A shares, benefit the people’.”

Hungriest Hippo posted:

The biggest problem with China's stock market isn't that its manipulated by the government, the US's stock market is horribly manipulated by the Fed.

TheBalor posted:

So how to they keep valuation from blowing up too much? Surely, if people catch wind en masse, they'll try to get in on it, but that could blow up to the point where even the CCP can't comfortably absorb the hit.

TheBalor posted:

So how to they keep valuation from blowing up too much? Surely, if people catch wind en masse, they'll try to get in on it, but that could blow up to the point where even the CCP can't comfortably absorb the hit.

meristem posted:

I think the key to that is Arglebargle III's question: who sold the stock that the institutions were forced to buy.

It would be funny, for example, if (pure assfic here) the institutions bought out Banana Cart Men and, in general, the locals, and left the foreigners (with the GS-advocated buys) when trading returned to normal. No societal unrest, right?

Fojar38 posted:

The comment sections in articles about China are even more retarded than usual over the past couple days.

quote:

Myth of China’s retail investors understates large players’ role

During the dramatic rise and fall of China’s stock market this year, one piece of conventional wisdom has gone mostly unquestioned: mom-and-pop investors drive the market.

Stories of dowdy grandmothers and college graduates eagerly speculating in the market form an easily comprehensible narrative that fits neatly with stereotypes of the Chinese as an unruly people — lurching between exuberance and panic — whose investible savings have grown faster than their good judgment.

A close look at available data on who invests in China’s stock market, and how much, tells a different story. While retail investors do make up a large share of overall market participants, their share of overall market value is probably 5 per cent or less, while the vast majority of Chinese households own no stock at all.
According to the widely respected China Household Finance Survey led by Gan Li, professor at Southwestern University of Finance and Economics, only 6 per cent of households owned stock in the first quarter of 2015.

By comparison, a Gallup poll in April showed that 55 per cent of Americans say they are invested in the stock market, either personally or through a spouse.
To be sure, other data appear to support the retail-driven market hypothesis. The number of newly opened stock accounts totalled 38m in the three months to the end of June, up from 9m for all of 2014, according to clearing house data. That creates the impression of a surge of retail money entering the so-called “A-share” market just as the rally was peaking.

However, a single individual may hold multiple accounts. The number of distinct individual market participants is 91m, of which only 51m held any stock at all in their accounts at the end of June. That equates to just 11 per cent of China's 443m households.

And as the household survey indicates, the true share of Chinese households that play the market is probably much lower.

Anecdotal evidence suggests big investors wishing to disguise their holdings often control multiple accounts under different names. In their 2003 book Privatizing China, Carl Walter and Fraser Howie describe how 4,329 stock accounts were opened in the remote northwest province of Gansu in two days in February 2001, compared with only three accounts during the rest of the month.

quote:

Though most Chinese households never play the market, there is little doubt that those who do control a large share of the market’s overall value. According to data from the Shanghai Stock Exchange, individual investors owned 81 per cent of tradeable shares by market capitalisation in July 2014.

Yet this figure, too, overstates the role of middle-class amateurs in the market. That is because a small number of wealthy investors own a disproportionate share of stock market wealth.

Of all individual investors in the stock market, 21 per cent held less than Rmb10,000 ($1,600) worth of stock at the end of June, while 69 per cent held less than Rmb100,000. Based on the combined tradeable A-share market capitalisation of Rmb46tn, this implies that more than two-thirds of investors owned less than 5 per cent of market value.

At the other end of the spectrum, 71,400 investors — just 0.1 per cent of the total — held between 10m and 100m, and more than 4,400 accounts held more than Rmb100m.

Though registered as “individuals”, such investors are hardly the amateur punters of popular imagination.

quote:

China stocks extend winning streak to three

Chinese shares edged higher on Monday morning, even as hundreds of companies resumed trading and the regulator launched a fresh crackdown on margin lending.

The Shanghai Composite rose 0.8 per cent in spite of sharp falls for large cap stocks such as commercial lenders and oil producers. Bank of China dropped 4.3 per cent while Agricultural Bank of China sank 3.8 per cent. PetroChina, which has the highest weighting in the index, lost 4.5 per cent.


Smaller companies fared better, with the Shenzhen index rising 2.9 per cent and the ChiNext startup board climbing 2.8 per cent. Hundreds of stocks hit their daily upwards limit of 10 per cent.

The advances followed the biggest two-day gain for the Shanghai market since the financial crisis, as Beijing’s all-out campaign to prop up shares gained traction.
Some analysts had raised doubts about the sustainability of the bounce as more than 1,400 companies — about half the China market— were suspended from trading for much of the past week. On Monday, more than 400 of those companies resumed trading, taking the percentage of the market frozen by shares suspensions down to 36 per cent.

Baofeng Technology, which had been on a trading halt since June 10, was among those to return to the market. It fell by the maximum 10 per cent limit, but remains the best performing stock in China this year having gained about 4,000 per cent since listing in Shenzhen in March.

Some analysts see the company as the epitome of China’s stock fever of the past year, during which both the Shenzhen and Shanghai markets doubled before plummeting in the past four weeks.

Chinese officials have sprung into action to prevent the stock market plunge from turning into a collapse. The two main share indices have dropped by a third since hitting multi-year highs on June 12, wiping trillions of dollars off the value of listed companies.

Beijing’s efforts include a ban on sales by major shareholders and executives, and the extension of credit to brokers to help them buy shares and equity funds.

In the latest government intervention, the China Securities Regulatory Commission said on Sunday that it was clamping down further on “grey market” margin finance, seen by many analysts as a key cause of China’s extreme volatility.

An earlier CSRC attempt to tackle margin lending — the use of borrowed money to buy shares — was seen by many as the original trigger for the share rout, as retail investors rushed to unwind leveraged bets on the market.

Separately, the head of a special task force set up to deal with China’s stock market crisis said “evidence” had been found of “illegal manipulations”. The government has already banned short selling, and vowed to punish those it deems to have manipulated the market.

Cultural Imperial posted:

Cultural Imperial posted:

Dux Supremus posted:

So is there a name for this? On the one hand it resembles a pump-and-dump, but with the entire economy instead of a particular security. On the other, you also have this idea of mandating the market can only go up regardless of fiscal soundness and then using the basically conjured funds to pay off real debt. In both regards it's a con-job in the truest sense of the phrase, but it seems unique in being a two-stage con and is playing out on a ridiculous scale.

Jumpingmanjim posted:

Dux Supremus posted:

So is there a name for this? On the one hand it resembles a pump-and-dump, but with the entire economy instead of a particular security. On the other, you also have this idea of mandating the market can only go up regardless of fiscal soundness and then using the basically conjured funds to pay off real debt. In both regards it's a con-job in the truest sense of the phrase, but it seems unique in being a two-stage con and is playing out on a ridiculous scale.