Chinese chaos worse than Greece

News.com.au ^ | July 7, 3015 | FRANK CHUNG and AFP

[Perseverando]

WHILE the world worries about Greece, there’s an even bigger problem closer to home: China.

A stock market crash there has seen $3.2 trillion wiped from the value of Chinese shares in just three weeks, triggering an emergency response from the government and warnings of “monstrous” public disorder.

• LATEST: CHINESE INVESTORS FLEE FOR SAFETY

And the effects for Australia could be serious, affecting our key commodity exports and sparking the beginning of a period of recession-like conditions.

“State-owned newspapers have used their strongest language yet, telling people ‘not to lose their minds’ and ‘not to bury themselves in horror and anxiety’. [Our] positive measures will take time to produce results,” writes IG Markets.

“If China does not find support today, the disorder could be monstrous.”

In an extraordinary move, the People’s Bank of China has begun lending money to investors to buy shares in the flailing market. The Wall Street Journal reports this “liquidity assistance” will be provided to the regulator-owned China Securities Finance Corp, which will lend the money to brokerages, which will in turn lend to investors.

The dramatic intervention marks the first time funds from the central bank have been directed anywhere other than the banks, signalling serious concern from authorities about the crisis.

At the same time, Chinese authorities are putting a halt to any new stock listings. The market regulator announced on Friday it would limit initial public offerings — which disrupt the rest of the market — in an attempt to curb plunging share prices.

While the exact amount of assistance hasn’t been revealed, the WSJ reports no upper limit has been set.

All short-selling — the practice of betting that stocks will fall — has been banned, and Chinese media has rushed to reassure citizens.

Yesterday, shares in big state companies soared

[Perseverando]

This is from an Australian news website.

[SaveFerris]

[$3.2 trillion wiped from the value of Chinese shares in just three weeks]

Wow. 1/3 of the first part of U.S. debt in only 3 weeks. Wow.

[grumpygresh]

Gold took a big dump today. I wonder if the Chinese sold some of their gold to fund their markets, or at least the Chinese have probably stopped buying gold allowing the western central banks to do their paper shorts unabated.

[SunkenCiv]

Thanks Perseverando.

A stock market crash there has seen $3.2 trillion wiped from the value of Chinese shares in just three weeks

Soon, the news will be how the Chinese are dumping the US dollar and debt, and moving into a new reserve currency, thus destroying the US economy. (snicker)

[The Duke]

All short-selling — the practice of betting that stocks will fall — has been banned,..

While a nation may ban the short-selling of a particular stock I'm not sure it's really possible to ban the short-selling of an entire economy. It would be like trying to ban pessimism.

[Perseverando]

ZeroHedge has some interesting articles today.

[AppyPappy]

The Chinese people’s low level of experience with stock markets is a big problem. They aren’t used to riding out “adjustments”. Like most neophytes, they end up selling at the lowest point due to panic.

[samtheman]

Short selling is actually good for the stock market. It provides buyers during times when prices are falling.

Idiots.

[lee martell]

I have heard zero about this Chinese Market Meltdown. The numbers are stratospheric, hard for the average person to conceive of.

[Perseverando]

I haven’t been following them either, but that’s about to change.

[Buckeye McFrog]

Communist Stock Market is an oxymoron.

[GraceG]

I have this image of chinese salarymen leaving their office buildings in a hurry, scrambling out to the sidewalk, walking fastly around their buildings, the going back inside.....

[Perseverando]

Lead story on Drudge at the moment: JACK MA STOCK SWEAT

Here’s the story when I click on the link:

Alibaba to JD.Com Plunge as Investors Flee From All Things China - http://www.bloomberg.com/news/articles/2015-07-07/china-slump-spreads-as-alibaba-sinks-adrs-approach-bear-market

[nickcarraway]

Usually the media never says anything but positive about the Chinese economy.

[Uncle Miltie]

China needs a good old-fashioned bubble bursting. Gotta teach all those new investors what risk tastes like.

[Perseverando]

The DOW is up 75. Money must be moving this way a little.

[MeneMeneTekelUpharsin]

Pass the popcorn. U.S. media will try to ignore this as much as possible to protect the Dems & Obama.

[Flash Bazbeaux]

Chinese Chaos worse than Greece? Who’s ever heard of a Greek named Chao?

[PoloSec]

I am not up on these nation to nation loans but could the Chinese suddenly call in the trillions of dollars in loans to the U.S.

Some freepers will know

Could they... would they?

[Repeal The 17th]

Congress should authorize the U.S. mint to strike a single coin
with the face value of eleventy-mega-trillion dollars
and then have it sent it to the chinese and ask for change back.