[dolanbaker]

In a nutshell, a classic case of supply and demand. Lots of supply but not enough demand.

More a case of supply & demand being out of sync, there was a severe shortage of supply in the mid noughties which spurred massive investment in oil production which eventually produced the goods.

But, the problem is that they all turned on the taps at the same time!

Now they're all turning the taps off, we could easily see a shortage in a couple of years unless they moderate the supply.

[evilgenius]

I'm amazed how clueless the Chinese seem to be about "managing" their stock market. For example:

http://www.bloomberg.com/news/articles/ ... six-months

China’s securities regulator banned major shareholders, corporate executives and directors from selling stakes in listed companies for six months, its latest effort to stop the nation’s $3.5 trillion stock-market rout.
Investors with stakes exceeding 5 percent must maintain their positions, the China Securities Regulatory Commission said in a statement. The rule is intended to guard capital-market stability amid an “unreasonable plunge” in share prices, the CSRC said.

1). Stopping capital markets from being freely traded capital markets MAINLY serves to make investors lose confidence in a market when capital is no longer freely traded, but traded at the whim of the powers that be.

2). It's not like people with enough wealth to own 5% of a major company (and access to expert advice commensurate with that wealth) can't find a way to trade or place hedges on some other exchange in some other part of the globe.

3). This is after several other measures, which have cumulatively stopped trading on thousands of Chinese companies. For all intents and purposes, they've practically shut down the entire market, so people can't trade. Now THAT should inspire confidence. (Funny how they weren't trying to inject caution or place limits on trading while the market was booming month after month).

As a long term trader (who has never owned Chinese funds or ETF's), this makes me NOT want to consider doing some buying of those if the market goes down 90% or so -- as a matter of principle AND as a matter of practicality.

Which is why I maintain China and most countries simply do not have the cultural headstart to manage liquidity flows as does the UK or US and which is why the world defers to these two managing the choke points.

On trading generally, there is no beating technical day trading. It cuts out all these sorts of uncertainties when youre out by NY closing. If you can get your head around price discovery, I would recommend it for a stress free life.

Do you mean so that when you come in in the morning you aren't suddenly down? You don't have any skin in the game until you make your first purchase, which you don't have to make if the thing is going against your prior deliberations. Why, that's just like not having to jump into a roulette or black jack game until you have gotten a handle upon what is going on. And skipping a turn if something weird changes that you are comfortable with. It's clever, but it doesn't come with every single guarantee. What kind of stuff do you use to protect yourself from black swans? You know, intraday flash crash type stuff, sudden convolutions for which you haven't got a prior defense. Do you diversify in some way?

[SeaGypsy]

AD trades currency, not stocks, last I heard anyhow. Mega liquidity & volume & multiple cross checkable signal sources, a different ball game to stocks or bonds.

The statement about Chinese inability to control their markets is spot on for cultural reasons not easily shifted. Practical oversight systems which make genuine real time business assessments are a western thing. The east is much more about a cult of personality, where obfuscation is standard practice & regulation is mainly about who you have to throw cash at to get doors open than fiscal or environmental prudence. The extent of market bluff in China & the ability to sell illusions from behind what remains of the bamboo curtain, continuance of ancient family based power structure, all lend to dependence on western systems management, at least at the top banking levels. Not that local managers are not subject to smoke & mirrors games, but by proximity at least can apply some direct oversight.

[evilgenius]

Math, if you know its secret, is a wonderful thing. I wonder if all along the Chinese have been pretending?

[yeahbut]

Monday 27 July 2015
Turmoil has returned to the Chinese stock market as shares suffered their worst fall in eight years, knocking commodity prices and fuelling jitters among investors in London.

Following three weeks of relative calm, the Shanghai Composite Index plummeted on Monday, ending down 8.5% at 3725.56 – its worst fall since February 2007. Meanwhile the Shenzhen index dropped nearly 7.6% to close at 12493.05 points. Analysts predict more misery ahead for investors in the world’s second largest economy.

Xinhua, China’s official news agency, commemorated the latest crash in a tweet that read: “The return of the debacle!” Two-thirds of all companies listed on the Chinese mainland, or about 1,800 stocks, lost 10% of their value – the maximum daily limit – and were suspended.

Not much coverage of this latest massive plunge, why is that?

Interesting times

[onlooker]

http://www.forbes.com/2010/07/05/us-inv ... s-fdi.html
Maybe because a fair amount of big US companies have markets and headquarters there , so they do not want to scare away capital or investment of any kind. Also, no doubt US entities have investments tied up in Chinese stock market. They figure this Chinese stock volatility will subside soon.

[dolanbaker]

Monday 27 July 2015
Turmoil has returned to the Chinese stock market as shares suffered their worst fall in eight years, knocking commodity prices and fuelling jitters among investors in London.

Following three weeks of relative calm, the Shanghai Composite Index plummeted on Monday, ending down 8.5% at 3725.56 – its worst fall since February 2007. Meanwhile the Shenzhen index dropped nearly 7.6% to close at 12493.05 points. Analysts predict more misery ahead for investors in the world’s second largest economy.

Xinhua, China’s official news agency, commemorated the latest crash in a tweet that read: “The return of the debacle!” Two-thirds of all companies listed on the Chinese mainland, or about 1,800 stocks, lost 10% of their value – the maximum daily limit – and were suspended.

Not much coverage of this latest massive plunge, why is that?

Interesting times

Lead story on the BBC website business section, anyway this dive is after a massive climb over the last year or so.
This time last year is sat around 2200 so still far higher now than a year ago.

[GoghGoner]

In Indianapolis, a friend works for a real estate management firm and her job is to buy houses to rent out for Chinese investors. All of this free money and global deflation. Scratching head...

Former teenage soldier hatches millions from Chinese egg futures

The opportunity Zhang saw was very specific: to borrow a lot of money quickly to produce high profits in a poorly understood market.

"The leverage is high in futures," Zhang said, who is spoken of as a celebrity by other Chinese traders. "You can make a fortune overnight."

But the high concentration of leveraged retail investors chasing overnight fortunes is a growing concern for China's regulators after recent turmoil in the country's stock market.

[GoghGoner]

China's GDP growth has to be close to negative right now. Forget 7%.

Chinese Spurn Unprecedented Car Discounts Amid Slowdown

“This round of price cuts is the worst in China’s auto industry history in terms of the number of models involved and the depth of the cuts,” said Su Hui, a deputy division head at the state-backed China Automobile Dealers Association and a 26-year veteran of the trade. “Nobody saw it coming, not the government, not the automakers, not the dealers.”

[americandream]

The currency markets are in turmoil of the likes I have not seen in a long time. The Chinese have once again demonstrated their credentials as a safe haven for investors dollars.

[Cog]

The currency markets are in turmoil of the likes I have not seen in a long time. The Chinese have once again demonstrated their credentials as a safe haven for investors dollars.

Safe haven?!


LOL

[americandream]

The currency markets are in turmoil of the likes I have not seen in a long time. The Chinese have once again demonstrated their credentials as a safe haven for investors dollars.

Safe haven?!


LOL

From an investment/speculative perspective, not flight. Perhaps you have a better explanation for why global institutional funds prefer Chinas management style. And that includes Trumps money.

[Cog]

Its not even good from an investment standpoint. You do realize that China just last month stopped the sell of over $1.4 trillion in Chinese stocks for six months? Just stopped the trade. Would you invest over there if you couldn't sell a plunging stock? If so, you are an idiot. Also they have cracked down on short selling stocks which is absolutely essential to a smooth running stock market. If you can't hedge a loss, that will increase your likelihood to dump whatever you can and get out of it completely. That is, if the Chinese government will allow you to sell at all.

I seriously hope you have not a dime invested in the Chinese stock market.

[americandream]

Its not even good from an investment standpoint. You do realize that China just last month stopped the sell of over $1.4 trillion in Chinese stocks for six months? Just stopped the trade. Would you invest over there if you couldn't sell a plunging stock? If so, you are an idiot. Also they have cracked down on short selling stocks which is absolutely essential to a smooth running stock market.

I seriously hope you have not a dime invested in the Chinese stock market.

It pays to understand how the exchanges work. Regional clampdowns do not affect global funds who trade from NY and London exchanges (which incidentally is why Trump is lying when he talks about barriers). Chinese and global infrastructure in general largely run their infrastructural liquidity pools through these two centres, the home exchanges being second tier and less of a concern to the international players. Generally, capital that is handled through these two exchanges is being traded by mature market players as that is where you essentially want to be based when you grow up.

[Cog]

But that is not what you said. You said that investment in China was a good idea. Wrong again. If they can't run their own exchanges without a meltdown, why should anyone invest in anything in their country? Your investment could easily be seized the day after you made it. No one is going to invest into that nightmare. China showed their hand. They love the markets when they go up but can't deal with it when markets go down.

China has overextended, has no idea really about how capitalism works, and simply have too many people to feed reliably. They are toast.

[americandream]

But that is not what you said. You said that investment in China was a good idea. Wrong again. If they can't run their own exchanges without a meltdown, why should anyone invest in anything in their country? Your investment could easily be seized the day after you made it. No one is going to invest into that nightmare. China showed their hand. They love the markets when they go up but can't deal with it when markets go down.

China has overextended, has no idea really about how capitalism works, and simply have too many people to feed reliably. They are toast.

I said, invest, not trade. Market makers will invest funds in say a car company based in China but trading in NY. That is how China works as an investment machine in this globalised system (owned by global capital, not American workers such as yourself or Chinese workers for that matter).

The small players on the local exchange suffer yes, but they do not matter in the scheme of things. If you are based in London or NY, you are kingpin.

[GoghGoner]

The carnage in coal is extraordinary.

Chinese Coal Miner Longmay Slashes Workforce to Survive Glut

Chinese coal producer Heilongjiang Longmay Mining Group will cut 100,000 jobs in the next three months, China Daily reported, in a sign of how slumping commodity demand and a push away from the fuel is hurting domestic suppliers.

The cuts mark a more than 40 percent reduction in the workforce of the largest coal miner in the country’s northeast, the state-owned newspaper reported Saturday, quoting Chairman Wang Zhikui. It also plans to sell its non-coal business to help pay off debt, according to the report.

"Longmay has reached a critical moment of life or death, a critical stage when we must save ourselves through resolute reforms," Wang said in a Sept. 21 statement posted on the company’s website, which didn’t mention the job cuts. "So we must reform, resolutely and completely, without delay."

[onlooker]

wow this will assuredly shake things up even more in China which was reeling from the stock market corrections. Have to wonder now about the worlds largest manufacturer because of this as coal is their no 1. fuel source.