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Chinese Stocks Crash Most Since Feb 2007, Futures Limit-Down After Regulatory Crackdown On Margin-Trading
UPDATE:
- *SHANGHAI COMPOSITE HEADS FOR BIGGEST LOSS SINCE FEBRUARY 2007
- *CHINA CSI 300 INDEX FUTURES FALL BY 10% LIMIT
* * *
Who could have seen this coming?
Having tried and failed once to stem the speculative frenzy in Chinese stocks, regulators took more direct action tonight and suspended three of the biggest securities firms from adding margin-finance and securities lending accounts for three months following rule violations. As Bloomberg reports, Citic Securities, Haitong Securities, and Guotai Junan Securities shares plunged dragguing the entire Shanghai Composite down almost 7% and negative year-to-date.
As Bloomberg adds,
Regulators may have been concerned that stock gains, partly driven by margin financing, are too rapid, according to Hao Hong, a strategist at Bocom International Holdings Co. in Hong Kong. The move came after the Shanghai Composite Index surged 63 percent in six months and brokers including Citic and Haitong announced plans to raise more money to lend to clients.
“Brokerage shares are likely to get hit,” Hong said before the market opened today. “After all, margin financing is one of the reasons for people to be bullish on brokerage stocks, and these stocks have run particularly hard.”
Citic and Haitong, the nation’s biggest brokers by market value, announced plans for share sales that will help fund an expansion of businesses including margin financing. Those two and Guotai Junan were the three largest by assets in a 2013 ranking by the Securities Association of China.
“The regulators are doing this to cool down the stock market,” said Castor Pang, head of research at Core-Pacific Yamaichi in Hong Kong. “Stock market sentiment will definitely go down.”
* * *
In addition, China's currency was sold hard out of the gate - testing 6.2250, its weakest level against the USD this year.
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"No problem- my broker in my Citi account was using my Apple shares as collateral...."
Whoops.
Mortimer san? Mortimer san?
Easy come, easy go.
Its interesting when you see this move so soon after the SNB debacle... are the powers that be laying down as much padding as they can before the crash? You know anything to soften the blow of the derivatives collapse that is mere weeks away?
SNB debacle? Which debacle? The Swiss CB has gained it's flexibility and freedom back.
While NYSE margin debt soars from record to record, the action by the Chinese shows - very much in contrast to the plutocratic regimes - they do not propagandize bubbles as wealth creation, but try to fight them once they spot them. The City and NY keep them blowing even bigger and sell this with their media as wealth creation to the masses. This anti-bubble stance was done in China with shadow banking, the natural resource speculation and now with margin trading.
Debt Default and Dollar Meltdown,
Derivative Explosion and Deflation Implosion
are Timed According to a Controlling Calendar
"...but but but, the Chinese would NEVER do things like blow housing and stock market bubbles or massive scale fraud and corruption. The Chinese and noble and trustworthy people who believe in honest money, and they buy gold..."
Hahahaha! Suckers... Do you folks want a fake Rolex, Louis Vuitton bag or Tungsten filled Gold Bars? Go to China!
p.s. here's what the former head of the FSB thinks of 'chess master' Putin's 'wonderful' strategy of pissing off everybody and boxing himself into a Chinese corner: http://siberiantimes.com/other/others/news/n0092-former-head-of-moscow-f...
Tyler won't post it, I guess it does not fit into the self deluding story of how 'smart' China and Russia really are...
That is inconvenient, do not want to be this guy. He has pissed off the prince for sure.
So what? You think China and Russia will start fighting over a few miles of tundra, rather than unite to "take over the world" (hyperbole)?
Loads of problems in China. But yes, they are smarter than the west - plus they have the money and guts to prevent bubbles from bursting violently. I've been saying it for 4 years now: The chinese govt will buy a lot of real estate if necessary to prevent a crash, make it a smooth landing.
There's a LOT of gas, oil and minerals underneath that 'worthless' tundra, you dumb fucking idiot.
http://en.wikipedia.org/wiki/Mineral_industry_of_Kazakhstan
http://en.wikipedia.org/wiki/Siberian_natural_resources
http://en.wikipedia.org/wiki/Mining_in_Mongolia
You're just another typical example of how arrogant, dumb and ignorant Yanks are. "Ah, it's all just tundra, fuck it, it's not important!"
"...unite to "take over the world" (hyperbole)"
Hahaha, oh man, how naieve can someone be in order to 'confirm' their own wishful thinking? Two 'captains' on a ship won't work. If/when the US empire collapses, there will be no sharing between Russia and China. If you'd understand history a little bit better, then you'd know that the relationship between Russia and China has always been a bit uneasy, even when both were 'brother' communist states. The Russians (for the most part anyways) are not Asian, so China does not see them as natural allies.
Moving right along there, nothing to see here, just another IMF stooge.
He's probably right. I mean if you can just vote to join Russia then you can just vote to join China. All you need is the votes. Vancouver should vote to join China any day now.
The Chinese appear to be trying to avoid the disaster the Fed has planned for the world. That's going to be tough.
The powers that be knew this 1 year ago already and have gotten out already.
http://www.timesofoman.com/News/Article-13659.aspx
read also this. It shows that when the car manu's and appliance manu's will report their Q4's, that there's at least a 10% drop minimum in sales.
And that will trigger a 10 to 16% selloff in the stockmarket.
Another interesting point is that the Saudi government is now looking for petrochemical investments in North America which is quite interesting as there's plenty of idle rigs and plants that have now crashed over 80% in price so if they go on a buying binge, they can increase their market share exponential.
And than, most probably, they'll use them as strategic reserves for themselves.
Another robbery from the American economy... the Saudi's are at it again...
You are quite the little troublemaker, aren't you? The King demanded silence about this and you are all over this place here. C'est inouï! Tu est une personne incroyable et incrédule!
Well, I guess it does not matter anymore. The International Axis of Evil once again has triumphed.
Vylahkinnen
Our biggest problem for Americans is that we’re the largest global consumers. Living way beyond our means.
America's exorbitant privilege (Charles de Gaulle) as it resulted in an asymmetric financial system where foreigners (Bretton Woods and Petrodollar) see themselves supporting American living standards and subsidizing American multinationals.
Now, because we live in a finite planet, most of these nations don’t have enough for their survival anymore; even when these nations consume a fraction ‘per-capita’ compare to Americans.
So, ideally, Saudi Arabia would ‘should’ invest Saudi’s money in the Middle East.
Nah, I was joking. I lost my sanity a couple of years ago in this climate. Can't take most things seriously anymore. And btw - you've robbed me from my edit privilege and my poor old, half-blind, Jewish French teacher will discover that auto-correct-bullshit that I typed earlier - tu est...oh boy, I am in trouble.
Anyway - I don't care where the al-Sauds invest their money. And they do invest in the Middle East btw - just not in the same things we would. They can invest their money in whatever they like. As long as they don't promote their wahhabism shit in my North European country and stay the fuck outta there - I don't care about them or their medieval country. The Arabs have taken the wrong turn in 1200 AD. But that's my perspective and it's not my problem. These are things that the people there need to decide and fight for.
Now what about 'Merica? I agree with most of what you said. As a foreigner I would add - that as long as the American man does not look after his own - he is doomed. Just don't sacrifice another American generation, okay? Take better care of your people and your homeland. A new era is dawning. The Great Reset Cometh. Read your Thoreau and act accordingly. Don't spend your money on wars that you cannot win. You cannot rescue everybody. It hurts - but you have to leave good people behind. Give yourself a couple of years and rebuild and reinvent your country and your image of your country. Be generous if needed. Be harsh if needed. It's a rough time for the sensitive mind - so toughen up. Learn the best from other societies and cultures. Be open-minded. You know that America was not always like that. All great countries go through such episodes and transformations.
The best part? You don't need to become a North European socialist and utopianist paradise for all of that. Good luck to you.
Some years ago somebody asked: 'How many years do you think it is since anybody said "no" to Barbra Streisand? Could be a metaphor for the US as a whole. Since when did anyone say: "You're living beyond your means and are seriously in debt. It's time to draw your horns in , get back into the black and start saving for your future." Such an approach is the exact opposite of Amercan political and financial philosophy, of US flavoured capitalism. It's been a long game and it worked well for a few, but from where I'm standing, the US looks like one of the most unstable polities on the planet. Even a casual perusal of ZH posts shows that there are a lot of angry peeps out there. Then there's the Homeland security bunch buying five years worth of HV ammo, more than 500 APC's and internment camps popping up all over the Union like mushrooms. Has anyone thought what all this ordnance and accomodation is for? Are there really so many 'terrorists' loose in the US? I think we should be told.
"Mr Beale, there are no countries. There is only International Finance. The Saudis get oil money from us, and they must put it somewhere, so back it comes."
Without explanation, authorities in two Chinese cities have refused to issue approvals for transfers of apartments built by selected developers, including troubled Kaisa Group.
Most analysts believe the extraordinary moves are related to Xi Jinping’s so-called anti-corruption campaign, but that explanation fails to explain certain crucial facts. There is reason to think there could be bankruptcy law factors behind the withholding of the approvals, which have unsettled markets in recent weeks. The bankruptcy explanation suggests a market correction is coming soon.
Hurts my fucking heart when a communist country acts more responsibily then our own
China is a Socialist country, they haven't been communist in a long long time.
The US is a Socialist country too, they have not been a capitalist one in a long, long time. Both are unfortunately autocracies.
Er, China is a communist country absolutely. The ruling communist party calls itself the communist party and whilst some of the constitution refers to socialist ideals, it's the same 1949 constitution. Today the ruling communists like to wear nice suits and allow certain levels of commerce, supported by construction and industry, but otherwise it's an absolutist communist state. My Chinese wife had one of her two children taken from her and then when she had two more kids she had to go on the run because they were going to forcefully sterilise her; she's quick though and managed to get out of the country before they could do it. This is all within the last decade. I have family and some great friends in China, they are all good hearted and hardworking people, but they will all tell you they are communists. It's the communist idealogy which puts them at odds with theology such as the Tibetan buddhists and Ughuir Muslims, not to mention many forms of Christianity. For instance Catholicism places the Pope above the China President and the Anglicans place the Queen above the China President, none of which is permissible under the communist constitution, hence they are banned Churches and doctrines. Commies, through and through, albeit they are up for a bit of business these days. If I could get permanent residency or citizenship I'd love to live there, but they would never grant it.
I think you'll find that "communism" is the excuse. Just like Christianity is an excuse and Islam is an excuse.
Or indeed "the children" are an excuse.
This is nonsense, there is almost nothing communist in todays China (I lived there some time, have many chinese friends). Actually I dare say it's closer to liberal capitalism than any western state. Obviously it's a authoritarian one-party system as you say, but that's almost the opposite of communism.
Eastern Germany "called itself" the German Democratic Republic - so for you it was a democracy? lol
One of the main reasons the West has been so conditioned against Communism is because the idea of a popular uprising culminating in royal heads rolling is somewhat unappealing to the birthright class. Just a thought.....
Gotta love the French!
Yes. It's bizarre that so many ZH readers will cheer Putin on many of his moves, but I totally understand it. Relatively, he appears more moral and correct on many issues. Nobody wants to jump up and move to Russia. But you get the feeling that at least Putin cares that Russia will be around in 10 or 20 years, so I think that people support at least the thinking that's pointed in a positive direction. That US leaders are backing away from everything we really need to do to fix our mounting problems is very, very frustrating.
The U.S. - we're global it's and we're gay. Pretty much sums us up.
Bingo ! Nationalism vs. Globalism. When cracks appear in NWO, masses( excluding those connected to multinational corporations, Bankers and military industrial complex ) will return to Nationalism. What are those cracks ?----unsustanable national debt, losing and costly wars, declining middle class, unemployment and credit shocks, much of what is occurring in Japan, Greece, Ukraine, EU, and in your backyard which is not visable due to pretention, embarrasment and wide screen TV. Nationalism requires identity which is easy, Globalism requires growth which is so far has been unattainable without debt strangulation. 2015 will be interesting and may be pivitol.
Communist? Go try sitting in one of the party limosines.
Excessive bank credit leading to an over-inflated stock market...c'mon that's sooooooo 1929.
Massive inflation in China too.
Still...Shanghai sits on one of the biggest rivers in the world.
I'm still miffed Scotland voted no on Independence.
And that the Swiss said 'no' on the gold. At least they got their paper somewhat straightened out.
Agree with that too.
Who could have seen this coming?
Well the insiders who got a warning before the "regulators" made their move of course. The proles gets raped again.
The SNB's CHF change was the signal for the end. Insiders were told to get in cheap while the fix was in place.
BTFD right Mao.
Yu Peking Tu
https://www.youtube.com/watch?v=UQDs1q1Ri6k
At least they recognize the danger and are reeling it in. But here in the good 'ol US? Naa...
BEIJING, Jan. 15 (Xinhua) -- Chinese shares rose more than 3 percent on Thursday after the latest central bank report showed abundant market liquidity...
BEIJING, Jan. 14 (Xinhua) -- Analysts may be divided over possible rate cuts in China's future, but they agree the country's monetary policy going forward will be cautious, with only minor adjustments being made. China will maintain prudent monetary policies in 2015 with better coordination of tight and loose monetary measures and proper fine-tuning, said the People's Bank of China (PBOC) at a 2015 work meeting last Friday...
in other words, the old weekly whipsaw that the fed is so fond of. there is no market, there is only the pboc.
don't tase me bro.
the ghouls all came from their humble abodes to get a jolt from my electrodes.
Sure glad the crony-commie regulators got out in time.
Why...it could have been their head on a stick ;-)
Does anyone know what the china etf's are? Inverse 2+3, and the regular etf that would go long. I might short china.
They need to get Yellen's toolkit of software applications for controlling markets so people don't think the markets are being manipulated by the government.
What, WS's SW developers?
China's fine. Just putting on the brakes.......
I got popcorn.
so what exactly is holding S&P up when the rest of the papers have crashed?
Totally, it was plastered all over the press some weeks ago; turkeys required.
Ouchy. Good thing they have those currency controls so they can't all pile into tbonds and push the yields down even further. Oh, that was last week? Huh.
Looks like there maybe some T bonds on offer on Tuesday when the American banks open. Gotta meet those Shanghai margin calls...
Chinese authorities are surprisingly proactive these days on regulatory changes...
What if Financial Crises are by Design?
http://winteractionables.com/?p=17884
They know what credit is and how it grows and collapses.
However Diogenes corollary to that:
Of course it's by design.
ok down 7.7% BUT still up 55% since one year ago... Keeping it in perspective
BTFD!!!!!!!!!!!!!!!!!!
you would think that US with the vast history of financial markets (booms & busts) would have learned the lesson. But nah - China that knows financial markets for a decade counteracts, US will be "surprised" that another bubble burst.
And CNBC writes: "Shanghai Composite sinks as financial, property stocks decline"
Clearly directed towards algos. Don't panic. The stocks declined (a bit) so the index sank (a bit).
Newspeak is the fictional language in the novel Nineteen Eighty-Four, written by George Orwell. It is a controlled language created by the totalitarian state as a tool to limit freedom of thought, and concepts that pose a threat to the regime such as freedom, self-expression, individuality, and peace....
... and crashing markets.
Remember when chinese stocks were golden, now they're just a golden shower.
Yeah well, the DAX is at all time highs in a bloc where there is nothing but debt, corruption and a defunct currency...
Well at least if you invest in the DAX and Germany will leave the EUROZONE, you can get some Deutschmarks when you sell them...
Casey was just talking about how it was a good time to get it. Is now even better?
**************************
The Casey Report NEWSLETTER Issue: 8.1 January 15, 2015 A Bull Is Born in ChinaAfter a mostly tranquil 2014, volatility has returned with a vengeance. This month's edition of The Casey Report is all about how to prepare for—and profit from—the turbulent markets ahead.
We kick off 2015 with a story of a bull market that just awoke from hibernation. Then Bud Conrad, Terry Coxon, Dominick Graziano, and Don Grove each share useful analysis from their area of expertise.
On the other hand...what would it look like if China followed the SNB and stopped pegging to the USD? These little Yuan wiggles may be the hint that people know.
Could certainly explain these Chinee lever'ing up like there's no tomorrow...I would if I knew I'd be paying off the loans in packing peanuts.
The Shanghai Index was due for a blow-off top for technical reasons...I wrote about it on January 5th:
http://www.strawberryblondesmarketsummary.com/2015/01/blow-off-top-in-st...
http://www.jamesmaherphotography.com/images/0000/3245/gambling_in_chinat...
Their Capital Markets are just as defunct as eeverywhere else for real investments, Only that they hide their woes better with much help from censorship of free press.