Posted on 04/24/2008 5:54:27 AM PDT by TigerLikesRooster
China flips switch and stock market bolts
Commentary: Manipulation can only end badly
By David Callaway, MarketWatch
Last update: 4:53 a.m. EDT April 24, 2008
HONG KONG -- Dusk is the best time of day in Hong Kong, as the gray, polluted skies and thick humidity that rule the office hours of this workaholic city give way to a skyline wave of neon lights, pulsing to life seemingly with the flip of a switch.
Like everything else in China these days, the change is sudden, and filled with expectation. But when it comes to the country's nascent stock market, investors need to be wary about being blinded by the lights of excitement and possibility. Chinese stocks soared more than 9% on Thursday after the government reversed a ruling last year that tripled the taxes, or stamp duties, on stock trades. Just as the ruling last year caused the market in Shanghai to plunge, the reversal triggered the biggest single-day rally of the year to date.
After a steady slide in the past several months that has seen the Shanghai Composite Index give back half its value -- including a 12% decline last week in one of the worst weeks in years -- the government is pulling out all the stops to try to provoke a rally this summer ahead of the Olympic Games.
Earlier in the week, the Chinese government limited block trades in a way that it hoped would reduce the volatility that has wiped more than $2 trillion in market cap off the market since last year. On another day, it imposed a limit on casino growth in the booming gambling city of Macau, causing a surge in shares of the casinos that are already there, including the big Las Vegas boys.
(Excerpt) Read more at marketwatch.com ...
Ping!
Financial markets in both countries will eventually reap what they sow, though.
Doubtful. To the best of my knowledge, there’s no such thing as economic karma.
When it’s the only game in town, people keep playing.
If the RNC was smart, an OXYMORON, they would be out telling voters, “The RATS took control of congress 2 years ago. Gas prices are higher, food prices are higher, investments are lower - not since Jimmy Carter has one group failed our economy with poor leadership!! The facts don’t matter - it is the story that matters. RATS are terrible leaders. Repeat every day till Nov.
Chinese stocks soared more than 9% on Thursday after the government reversed a ruling last year that tripled the taxes
Tax Cut, when are we going to get our income tax rates cut to the 15% that works so well for capitol gains? Not with Democrats in power, at least Republicans cut taxes.
Re: Dusk is the best time of day in Hong Kong, as the gray, polluted skies and thick humidity
Wonder if they will sue over this offensive reporting?
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