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Cultural Imperial posted:You'll find out in approximately 7 hours. Chinese stock markets don't observe american labour day?
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Sep 7, 2015 00:49
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More like mock starkets.
Arglebargle III fucked around with this message at 02:21 on Sep 7, 2015 |
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Sep 7, 2015 02:09
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Shcomp up 1.78%. Revive the a shares to benefit the people
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Sep 7, 2015 03:01
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Cultural Imperial posted:Shcomp up 1.78%. Boooooooooring
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Sep 7, 2015 03:03
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down 1.5% after lunch
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Sep 7, 2015 06:59
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Sep 7, 2015 07:02
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It just went off a loving cliff down ~3%
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Sep 7, 2015 07:43
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Down 2.5% at close
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Sep 7, 2015 08:01
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I guess we're at parade's end.
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Sep 7, 2015 17:31
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China used up around 2.5% of their foreign reserves last month, most of it likely going into propping up the markets.
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Sep 7, 2015 18:53
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Shifty Pony posted:China used up around 2.5% of their foreign reserves last month, most of it likely going into propping up the markets.  While hilarious, this is also not great.
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Sep 7, 2015 19:25
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Shifty Pony posted:China used up around 2.5% of their foreign reserves last month, most of it likely going into propping up the markets. How much of a nation's foreign reserves does a country use at any given time, usually? I'm not very familiar with economics so I don't know just how bad it is.
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Sep 7, 2015 19:50
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Artificer posted:How much of a nation's foreign reserves does a country use at any given time, usually? I'm not very familiar with economics so I don't know just how bad it is. I wondered the same thing. The beginning of a NYT article details how much that 2.5% is in context: quote:HONG KONG — China is burning through its huge stockpile of foreign exchange reserves at the fastest pace yet as it seeks to prop up its currency and stem a rising tide of money flowing out of the country.
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Sep 7, 2015 20:08
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So everything is hosed over the coming days, yes?
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Sep 7, 2015 20:10
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Venomous posted:So everything is hosed over the coming days, yes? Well the drop seems to have slowed down compared to the -8% every day, but I do not know.
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Sep 7, 2015 20:11
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Artificer posted:How much of a nation's foreign reserves does a country use at any given time, usually? I'm not very familiar with economics so I don't know just how bad it is. If your bank account was decreasing at 2.5% a month, would you be happy or sad?
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Sep 7, 2015 21:26
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GreyjoyBastard posted:
it's like what happened in russia when the price of oil crashed.
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Sep 7, 2015 21:28
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Hey guys your national finances should be managed just like your personal household finances because
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Sep 7, 2015 22:25
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Funny thing is that China is propping up its currency which is quite the opposite of the narrative after they devalued it so much earlier this summer. If they let it float it would result in people accusing them of starting a currency war when really it is just people fleeing a perceived to be sinking ship.
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Sep 7, 2015 22:31
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Shifty Pony posted:Funny thing is that China is propping up its currency which is quite the opposite of the narrative after they devalued it so much earlier this summer. I honestly don't understand anything about the policy and after reading a bunch of articles am not sure the media does either, why would they devalue in the first place if they were consistently dumping treasuries and thus propping the RMB up? Everybody knew they were consistently dumping treasuries and the forecast for this month was supposed to be even higher (an outrageous 200 bil), so why the doomsday stuff about devaluation? The only thing I can think of off the top of my head is that other countries' QE policies have been strangling the Chinese markets/economy in some way and it threw their big plans to make the RMB stronger into an ugly situation and the deval was sort of like throwing on an emergency brake because buying treasuries or dumping less treasuries would be impossible/take too long coma fucked around with this message at 23:22 on Sep 7, 2015 |
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Sep 7, 2015 22:57
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You need to think one step ahead. If China wasn't artificially propping up its currency, they'd be forced to devalue it even further.
filthychimp fucked around with this message at 23:20 on Sep 7, 2015 |
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Sep 7, 2015 23:16
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filthychimp posted:You need to think one step ahead. If China wasn't artificially propping up its currency, they'd be forced to devalue it even further. I don't understand what the 'step' is here, wouldn't not propping it up with FX dumps cause it to 'devalue' on its own? Why would they be forced to formally devalue it further?
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Sep 7, 2015 23:24
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In a normal market yes. But China announces what the exchange rate is and then allows it to trade in a tight band around whatever they have announced it to be for the day. There is a secondary non-official market but it tracks the official exchange rate pretty tightly because China is so willing to intervene if there is any danger of the rate not being what they say it is. If China weren't buying up all the extra Yuan using foreign denominated assets what would happen is either the official exchange rate would have to drop to reflect the fact that there are is a surplus of Yuan or the unofficial exchange rate would diverge from the official one and that is very, very bad. As for why they devalued it in the first place and then rapidly shifted to propping it up... nobody is entirely sure about that one.
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Sep 8, 2015 00:37
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coma posted:I don't understand what the 'step' is here, wouldn't not propping it up with FX dumps cause it to 'devalue' on its own? Why would they be forced to formally devalue it further? Because they purposefully overvalue their own currency and prop up growth rates to support their claims.
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Sep 8, 2015 00:38
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China keeps its currency undervalued in order to make their exports more attractive, since you get more renminbi for your dollar. Essentially, they do this by buying and holding foreign currency. The People's Central Bank foresaw that demand for yuan would crash as a result of their flagging stock market, as traders sell and then exchange yuan for other currencies. China can't allow the yuan to depreciate too much, as that'll drive up the cost of certain imports (namely oil and food), which would then negatively affect domestic growth, which would then negatively affect, well, everything. Right now, they're selling tremendous amounts of foreign currency to prop up the renminbi. They devalued their currency to bring it closer to the actual market price, then started selling reserves to keep it from dropping further. Without the devaluing, they would be selling more than the current $100-200 billion per month to maintain the current price. When do they stop? When demand for renminbi recovers, i.e. when the market believes this crisis has passed and that China is maintaining healthy growth.
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Sep 8, 2015 02:17
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filthychimp posted:When do they stop? When demand for renminbi recovers, i.e. when the market believes this crisis has passed and that China is maintaining healthy growth. That's gonna take a while considering their growth is steadily slowing...
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Sep 8, 2015 02:18
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filthychimp posted:China keeps its currency undervalued in order to make their exports more attractive, since you get more renminbi for your dollar. Essentially, they do this by buying and holding foreign currency. I thought the FX sells have been going on since last month though, and since the post above said they have to set the exchange rate every day how do those two policy levers actually work together? The main thing I'm trying to suss out through all the media noise is whether China keeps its currency undervalued, or now with FX revelations overvalued, and whether there's not a bit of bias accusing China of doing basically the same thing the advanced economies are doing through QE policies. And it's hard to find any confident, concise opinions on the topic except for libertarian goldbuggish anti-QE types who are smearing blood and ash all over their faces and yelling "BEGUN, THE CURRENCY WARS HAVE"
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Sep 8, 2015 02:31
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CommieGIR posted:That's gonna take a while considering their growth is steadily slowing... Something something consumption based sub-10k per capita economy
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Sep 8, 2015 02:41
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coma posted:I thought the FX sells have been going on since last month though, and since the post above said they have to set the exchange rate every day how do those two policy levers actually work together? I fudged the timeline a bit. Demand for yuan drops -> Sell reserves to maintain price -> It becomes apparent that demand will drop further -> devalue yuan to bring it closer to actual market price -> continue selling reserves. quote:The main thing I'm trying to suss out through all the media noise is whether China keeps its currency undervalued, or now with FX revelations overvalued, and whether there's not a bit of bias accusing China of doing basically the same thing the advanced economies are doing through QE policies. In the past, yuan was undervalued since China's central bank bought and held on to foreign currency. Now it is overvalued, and they're selling foreign currency to prevent it from dropping further. QE is a different beast entirely, since it doesn't involve buying or selling foreign currency, only that central bank's currency. In QE, a central bank buys long term financial assets from other banks, increasing the prices of those assets and increasing the money supply beyond what current interest rates allow. Manipulating exchange rates is not the goal of QE, it devalues a currency as a side effect of increasing the money supply in hopes of stimulating growth and preventing deflation. Other governments don't like China doing this. When you manipulate exchange rates via buying/selling foreign currency, that gives you some power over other people's exchange rates. Other large counties try not to engage in that specific operation, and mostly let their currency float where the market prices it. When they do market operations, they do it in terms of their own currency, like QE.
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Sep 8, 2015 03:34
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filthychimp posted:I fudged the timeline a bit. Demand for yuan drops -> Sell reserves to maintain price -> It becomes apparent that demand will drop further -> devalue yuan to bring it closer to actual market price -> continue selling reserves. Yeah, I think we're almost to the heart of what I'm getting at, the fringe economy bloggers have been baying about QE being a roundabout way of strategically devaluing currencies to remain competitive and that it's not just an unintended side-effect, however most of them are the anti-Fed-intervention libertarian crowd who have been predicting The Currency Wars since QE started. See: http://www.amazon.com/Currency-Wars-Making-Global-Crisis/dp/1591845564 Yet that's the most confident and 'complete' narrative I've read so far, it seems like most people in the mainstream have been revising the narrative from "China's fine" "Ok maybe China's not fine but they can't affect us" "Ok they're affecting us but it's just market overshoot" "Ok they're affecting us a bit more than we thought but it's just because there's a round of devaluations that that FUCKUP China started to artificially lower their currency to sell more exports" and I'm wondering if the whole picture of the lead-up to this currency-wise is a little more complex. Also I found a good contrarian article about the political fallout of this crash in the party: http://chinamatters.blogspot.com/2015/08/for-ccp-stock-market-meltdown-takeaway.html
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Sep 8, 2015 04:03
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Also what do you guys know about the carry trade alleged to have goosed the chinese markets to the tune of a trillion bucks? Besides that ChinaMatters blog I've only ever seen it alleged by some anti-Fed diehard on CNBC and I think ZeroHedge (lol) but on the other hand it's the only thing I've seen that's addressed at all why Western markets might actually be following China's lead
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Sep 8, 2015 04:35
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Let's play "spot when August trade data was released" https://www.google.ca/finance?ei=4v_kVamtMsXSmAGg7YzQBA&q=sse
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Sep 8, 2015 04:38
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Hey we're pretty close to 3000 again.
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Sep 8, 2015 04:57
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Hope they have another parade coming up.
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Sep 8, 2015 05:19
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AllanGordon posted:Hope they have another parade coming up. maybe some more university cheering will make it better?
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Sep 8, 2015 05:20
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Now we play "spot where the government began to buy stocks"
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Sep 8, 2015 07:44
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Fojar38 posted:Now we play "spot where the government began to buy stocks" Check out the CSI300 graph for today lol.
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Sep 8, 2015 08:07
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I think I found out why it bounced
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Sep 8, 2015 08:19
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I feel like this could gently caress up their stock market even more. Yay or nay? Also if true am I correct in thinking that they are essentially flailing around without any real way to control the situation?
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Sep 8, 2015 08:24
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A stock market that isn't allowed to go down isn't a stock market, it's a sham, so yeah.
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Sep 8, 2015 09:03
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