China spends billions to prevent stock market crash

Discussion in 'Financial Cents' started by stg58, Jul 4, 2015.


  1. stg58

    stg58 Monkey+++ Site Supporter+ Founding Member

    I can see barry pushing to bail out China..
    Greece, Puerto Rico now China in trouble...hmmmmm

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    China spends billions to prevent stock market crash - Jul. 4, 2015
    China's stock market is in trouble. It's down over 20% since mid-June.
    But Chinese stock brokers are trying to tell scared investors: Stop selling. Help is on the way.

    On Saturday, China's 21 largest brokerage firms said they would spend a whopping 120 billion yuan (about $19.3 billion) to try to stabilize the market, according to Chinese state media. The firms will actually buy stock funds themselves.

    The goal is to show regular mom and pop investors that the big players still think buying stocks is a good idea. It's a similar strategy to companies buying back their stock when they think it's undervalued.
     
    Marck, Tully Mars and Pineknot like this.
  2. HK_User

    HK_User A Productive Monkey is a Happy Monkey Site Supporter

    And this is the country that will be the new reserve currency and also wants to back their money by gold?

    Yuan to supersede dollar as top reserve currency: survey
     
    Marck, William Antrum and Ganado like this.
  3. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    3 words. Special Drawing Rights.
    It has existed since late 60's early 70s.
    International Reserve Asset already. Can be swapped for dollars, euro, yen and pound sterling.
    Unfortunately, you and I can not obtain them. Only IMF member countries get their allocation.
     
    Tully Mars and Brokor like this.
  4. Dunerunner

    Dunerunner Monkey

    Glad I have a small stash of gold and silver along with a rather insane cash of ammunition....
     
  5. vonslob

    vonslob Monkey++

    Adams smiths invisible hand will eventually slap china upside the head. Government interference in the equity markets never ends well. You don't mess with the invisible hand.
     
  6. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    Actually, Japan is the top. They owe something like a quadrillion yen. and are 220+% Debt to GDP where as Greece is only 170%
     
    Ganado likes this.
  7. stg58

    stg58 Monkey+++ Site Supporter+ Founding Member

    Not looking good for our "friends" in China.

    Nearly 25% of Chinese stocks have stopped trading

    The turmoil in China's stock market is so bad that some companies are calling it quits.
    Over 700 Chinese companies have halted trading to "self preserve," according to the state media. That means about a quarter of the companies listed on China's two big exchanges -- the Shanghai and Shenzhen -- are no longer trading.

    China's stock markets are in trouble. The Shanghai Composite Index has fallen over 25% since mid-June. The Shenzhen, which has more tech companies and is often compared to America's Nasdaq Index, is down even more.

    According to Bespoke Investment Group, China's stock markets have now lost $3.25 trillion. To put that in perspective, that's more than the size of France's entire stock market and about 60% of Japan's market.

    While it's a top issue for China, few foreign investors have much exposure to these stock markets. The real concern for those outside China is an economic slowdown, not so much the stock market fluctuations.

    "We reiterate that selling global risk assets on fears of Chinese 'contagion' driven purely by stock declines is a fool's errand," Bespoke wrote in a morning note.



    Nearly 25% of Chinese stocks have stopped trading - Jul. 7, 2015
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    Beijing's desperate attempts to control the stock market will end badly | Business | The Guardian
    Nervous about the Chinese stock market? You should be. First, it looks expensive, even after a dip. Second, the authorities in Beijing, by adopting increasingly desperate measures to prop up share prices, are sending an unmistakable message that they fear a crash is a possibility.


    The latest official attempt to manipulate the stock market would be laughed out of court if it were attempted in the west. The central bank is shovelling cash towards a state-backed finance company that lends to individuals who would like to make bigger bets on the stock market than they can afford. That’s right, in today’s communist China, there are subsidies for stock market speculation.



    By way of further encouragement, the state itself is piling in. A state-backed wealth fund is buying blue-chip stocks. Meanwhile, supposedly independent brokers and fund managers have decided this is the ideal moment to invest the equivalent of £12bn and pledge not to sell until the main Shanghai index has risen at least 20%. This extraordinary effort, apparently, is required to “uphold market stability”.

     
    Last edited: Jul 7, 2015
    Marck likes this.
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