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Crazed Chinese Housewives Frothing At Hong Kong Bubble Euphoria

Tyler Durden's picture




 

As we pointed out Wednesday evening, the spill over of China’s self feeding, margin debt driven, domestic equity buying frenzy into Hong Kong-listed shares accelerated markedly overnight as the Hang Seng jumped nearly 7% at one point with volume turnover 400% above the 30-day average. Shares closed up 2.7%, with the Hang Seng now at a 7-year high as cash poured in thanks to reduced regulation on Chinese mutual fund purchases and as some investors likely feel that the following chart may suggest mainland shares are overvalued. 

As we’ve documented over the past several weeks, this has all the makings of an epic bubble as retail investors in China, some with little in the way of formal education, are opening stock accounts at a furious pace with more than 4 million created in March alone. Now, with Hong Kong undervalued relative to extremely overvalued mainland shares, the mania is spreading quickly as housewives and security guards “buy stocks like they’re gambling in Macau.” 

Via Bloomberg:

“Things are getting quite exciting,” said Chow Man, a 68-year-old housewife who favors Chinese banks and infrastructure stocks and says she has as much as HK$200,000 ($25,000) in play. “It’s becoming like a hobby for a lot of mainland investors to trade stocks now. That’s why more of them are taking opportunities in Hong Kong.”

 

Hong Kong locals are jostling with bargain-hunting Chinese investors after the Shanghai Composite Index’s world-beating rally pushed the discount on shares in the former British colony to the widest since 2011. While enjoying the gain, one of the patrons at the brokerage likened the situation to a casino.

 

“I’m trying not to buy too much because the market will likely go down a bit and some stocks are getting more expensive,” said Juliana Lui, a government worker.

 

“I’m staying conscious. Some people are buying stocks like they’re gambling in Macau.”

 

“The rally may last for a few more days,” said the security guard, who’s hoping stocks will rise another 10 percent. “I’m just taking a lunch break to do some trading because the market is hot.” 

We suppose this is further evidence that no one is planning on listening to the China Securities Regulatory Commission, who recently warned that investors “shouldn’t be thinking if they don’t buy now, [they’ll] miss it.” 

Here's a look at the longer-term picture and peak madness from the Thursday session:

*  *  *

And so, as the "elementary school-educated Chinese momentum trading hoardes descend" onto the Hong Kong exchange, we'll quote BNP who recently gave up trying to predict what happens when millions of semi-literate retail "investors" suddenly adopt (without knowing it) the greater fool theory of investing wherein it doesn't matter how much you overpay as long as someone else is willing to overpay-er: 

"What happens next is an unknown unknown... speculative bubbles are inherently re-enforcing in the short-term and frequently last longer than expected. The longer they continue, however, the larger the eventual bursting." 

 

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Thu, 04/09/2015 - 09:26 | 5974880 q99x2
q99x2's picture

Pretty sure they got hold of the FEDs software.

Thu, 04/09/2015 - 09:27 | 5974887 GetZeeGold
GetZeeGold's picture

 

 

I get my best tips from Hong Kong shoeshine boys.

Thu, 04/09/2015 - 09:31 | 5974908 p00k1e
p00k1e's picture

'Hong Kong Phooey' loves "Anacott Steel".

Thu, 04/09/2015 - 09:56 | 5975012 ParkAveFlasher
ParkAveFlasher's picture

You do mean Brue Horseshoe?

Thu, 04/09/2015 - 10:03 | 5975034 Ivanovich
Ivanovich's picture

LOL!

Thu, 04/09/2015 - 10:59 | 5975237 SilverIsKing
SilverIsKing's picture

I buy 100 shares of Doublecrick (DCLK) and Rycos (LCOS) prease.

Thu, 04/09/2015 - 12:05 | 5975428 wallstreetapost...
wallstreetaposteriori's picture

I think a 1929 dow layover is more appropriate for China at this point the NAZ. 

Thu, 04/09/2015 - 18:35 | 5976727 SuperVinci
SuperVinci's picture

No Crinton's!

No Bush's!

 

 

 

 

Thu, 04/09/2015 - 10:03 | 5975035 Ivanovich
Ivanovich's picture

LOL!

Thu, 04/09/2015 - 09:33 | 5974913 froze25
froze25's picture

Well that maybe the trigger for the great reset.  Lots of triggers out there these days.

Thu, 04/09/2015 - 09:47 | 5974977 new game
new game's picture

the hong kong swan has ducked his head. they do that right before they take flight.

Thu, 04/09/2015 - 12:03 | 5975396 Dollarmedes
Dollarmedes's picture

That's what I was thinking.

Is this the Chinese bubble spilling over, or is it the sign the Chinese bubble is bursting? Right before the 2008 crash, people put their money in oil ETFs in the hope that commodities would be a safe haven, or that's what I heard: http://www.oil-price.net/en/articles/2008_economic_collapse.php

The stock market collapsed, and oil ETFs soon followed.

Note that the combined capitalization of the Shanghai and Shenzhen stock exchanges is about $4.5 trillion, while the Hong Kong exchange is about $1.0 trillion. So a 1% decline in the capitalization of the Chinese exchanges flowing into the Hong Kong exchange would result in a 4% increase.

http://en.wikipedia.org/wiki/Shanghai_Stock_Exchange

http://en.wikipedia.org/wiki/Shenzhen_Stock_Exchange

http://www.theglobaleconomy.com/Hong-Kong/stock_market_capitalization_dollars/

Thu, 04/09/2015 - 10:12 | 5975061 GMadScientist
GMadScientist's picture

Just make sure they wear a condom.

Thu, 04/09/2015 - 11:04 | 5975254 chilli sauce
chilli sauce's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com

Thu, 04/09/2015 - 11:49 | 5975390 williambanzai7
williambanzai7's picture

Thu, 04/09/2015 - 09:27 | 5974883 Dr. Engali
Dr. Engali's picture

Looks like a blow off top to me. Better get those printers fired up and turn them up to eleven.

Thu, 04/09/2015 - 09:30 | 5974902 NoDebt
NoDebt's picture

I'm just glad they finally relaized that real wealth is created in PAPER assets.  Not real estate.  Certainly not gold.

Thu, 04/09/2015 - 09:43 | 5974921 Dr. Engali
Dr. Engali's picture

Who said we have nothing in common? It turns out the masses in China are just as stoopid as the sheep in Merika.

Thu, 04/09/2015 - 09:48 | 5974982 new game
new game's picture

never met a human that couldn't be fleeced...

Thu, 04/09/2015 - 09:26 | 5974884 Philo Beddoe
Philo Beddoe's picture

The sheep never leave the casino winners. That is all you need to know. 

Thu, 04/09/2015 - 09:36 | 5974925 froze25
froze25's picture

Typically they give into impulses and lack the discipline needed to leave a winner.  The biggest idiots I know can be successful if they possess basic discipline.  Funny how it seams society and the education system seams to try to discourage discipline at every turn.

Thu, 04/09/2015 - 11:29 | 5975337 Urban Redneck
Urban Redneck's picture

So it's sort of like sex, except that most people don't want to get off for some reason, and will do insane things to avoid it.

Sex is more fun when you get off more than once.

I feel sorry for Chinese housewives - NO HAPPY ENDINGS FOR YOU!

Thu, 04/09/2015 - 09:37 | 5974929 Dr. Engali
Dr. Engali's picture

They don't build those big buildings out of nothing. Now what they pay for them with is another story.

Thu, 04/09/2015 - 09:50 | 5974988 new game
new game's picture

but they do send out a winner every now and then to keep the hope alive...

Thu, 04/09/2015 - 10:11 | 5975058 quasimodo
quasimodo's picture

Exactly, like the line in the movie Casino goes"it's all been arranged for us just to get your money, we're the only winners, the players don't stand a chance"

 

 

Thu, 04/09/2015 - 10:13 | 5975066 GMadScientist
GMadScientist's picture

And if they start to, that's why we have pit bosses.

Thu, 04/09/2015 - 09:27 | 5974888 whatthecurtains
whatthecurtains's picture

I was hoping for some pics of Chinese housewives.   

Thu, 04/09/2015 - 09:29 | 5974891 Rodders75
Rodders75's picture

Ahem, ZH'ers I think the Nasdaq analogue isn't valid...for now. THis is more realistic and shows a lot more upside if you can run the trend successfully and anticipate what the peasants are going to do...ie gamble. 

http://www.marketanthropology.com/2015/03/china-flirts-with-major-breako...

Some of us will have to make money sometime, we can't be out of every market forever and we can't all buy ZH's most shorted selection. WTF else can you buy?

Thu, 04/09/2015 - 09:31 | 5974905 Dr. Engali
Dr. Engali's picture

Who says we aren't making fiat in the market? Oh, Pms and semi-Pms (think lead) are always nice to have just in case.

Thu, 04/09/2015 - 09:53 | 5974995 new game
new game's picture

it is back to normal pricing

350 rds of blazer, 9mm for 80!

ok, the math

1 oz=5250 rds.

i ask, what would you rather have 5k rds or one oz shinney?

Thu, 04/09/2015 - 09:55 | 5975007 new game
new game's picture

another dumb question 

20 oz or 20 acres with woods and deer?

Thu, 04/09/2015 - 10:15 | 5975076 cheech_wizard
cheech_wizard's picture

Still working on the 20 oz. The second half is already accomplished.

Thu, 04/09/2015 - 09:54 | 5975002 jcaz
jcaz's picture

LOL- spoken like a true top-of-the-market pleeb....

Yes, Nancy-  sometimes shit DOES get too expensive-  and the suckers are ALWAYS you guys who think that there's just "one more push up left".

ZH doesn't have a "most shorted selection"-  ZH reports facts, and lets you draw your own conclusion-  last time I checked,  ZH never told you to buy or sell anything.

 

 

 

Thu, 04/09/2015 - 13:20 | 5975649 Inthegreen
Inthegreen's picture

ZH doesn't tell you how to sell or buy anything but when has ZH ever said anything positive?  I hope you haven't been short this whole time, sir.

Thu, 04/09/2015 - 10:15 | 5975072 GMadScientist
GMadScientist's picture

"WTF else can you buy?"

Uncut Cocaine. Time to get a real job, slick.

Thu, 04/09/2015 - 11:39 | 5975345 mtl4
mtl4's picture

Hate to say it but it's now China's time to enjoy a good capital flow shift and party like it's 1999.........

 

Thay haven't been burned like we did (twice now) so this thing could get alot hotter before it cools down (hope theyremember where the green line is though)

Thu, 04/09/2015 - 09:31 | 5974898 Blopper
Blopper's picture

Many people may soon jump down from buildings.

Thu, 04/09/2015 - 10:17 | 5975085 GMadScientist
GMadScientist's picture

Very few will fly.

Thu, 04/09/2015 - 09:32 | 5974909 keremetski
keremetski's picture

... and us housewives are pimping themselves. Heard it through the vine.

Thu, 04/09/2015 - 09:32 | 5974910 keremetski
keremetski's picture

... and us housewives are pimping themselves. Heard it through the vine.

Thu, 04/09/2015 - 09:48 | 5974981 SheepDog-One
SheepDog-One's picture

LOL....hoes.

Thu, 04/09/2015 - 09:35 | 5974914 yogibear
yogibear's picture

The house always wins.

Once they lose big they turn from housewives to hookers for the owners.

Thu, 04/09/2015 - 09:34 | 5974915 FreeShitter
FreeShitter's picture

Horry fuk...

Thu, 04/09/2015 - 09:36 | 5974923 Spungo
Spungo's picture

Greedy people end up losing everything. They never stop when their stock is up 100%. They let it ride in case it goes up another 100%, but it eventually crashes back down to its true value.

Thu, 04/09/2015 - 10:11 | 5975056 GMadScientist
GMadScientist's picture

Like AAPL. j/k

Thu, 04/09/2015 - 09:37 | 5974927 Dubaibanker
Dubaibanker's picture

Those who procrastinate are bound to miss the bus.

Shanghai exchange has jumped 92% in one year and over 80% last year (Jan to Dec 2014) being the best stock exchange returns in the world. Thus far in 5 quarters it is up over 120%...

If you missed it, you can only blame yourself, if you did not invest.

1.4billion people out of which even if 100m people invest in stocks is a lot more than the entire United States of America investors!

I sold some stocks today and will sell some more tomorrow.

Rally should last a few more months but best is to boko gains. Some stocks are up 50% in one month and some are 100% in a few months. 

New laws are being introduced to let investors send money out to HK as well as invest in domestic markets.

Plus real estate is slowing down so the money is flowing into stocks instead.

accounts new china stock trading

Thu, 04/09/2015 - 09:52 | 5974996 Stormtrooper
Stormtrooper's picture

I missed out on the Zimbabwe run up too. Still kicking myself for that.

Thu, 04/09/2015 - 10:21 | 5975018 Dubaibanker
Dubaibanker's picture

Well...we must adapt and move fast in today's hyper ventilating news world.....it is a trader's world...not an investors world any more..like the good old days.

We may as well throw all the school text books!

Neither QE nor any zero rates are mentioned in them!

What did you ever buy from Zimbabwe? By the way, China sells EVERYTHING TO EVERYONE!

You should not be comparing apples to oranges. That will be a good start...

Thu, 04/09/2015 - 11:13 | 5975279 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Investing in Old Mutual stock actually made sense as a hedge against "Zimbabwean" hyperinflation. Old Mutual stock was actually worth something. This is a pretty obvious pump-and-dump scam. Hong Kong has a currency board, so the rubes don't even have hyperinflation as an excuse.

Thu, 04/09/2015 - 09:38 | 5974934 SmilinJoeFizzion
SmilinJoeFizzion's picture

Dead cat bounce, then into wok you go kitty

Thu, 04/09/2015 - 09:41 | 5974951 Hulk
Hulk's picture

Chinese housewives of Orange County approve this message !!!

Thu, 04/09/2015 - 09:51 | 5974989 buzzsaw99
buzzsaw99's picture

awesome sauce

Thu, 04/09/2015 - 10:03 | 5975036 actionjacksonbrownie
actionjacksonbrownie's picture

If it looks like this when they tell you NOT to buy, just try imagine the fantastic rally when they announce the "buy" signal!

 

I's gonna be rich I tells ya... RICH!!!

Thu, 04/09/2015 - 10:10 | 5975051 GMadScientist
GMadScientist's picture

Fuckin' A...how do I get listed?

Thu, 04/09/2015 - 10:12 | 5975060 aribabak
aribabak's picture

When Hong Kong housewives and housemaids talk about share prices while buying foodstuff in the market every morning we know the euphoric stock bubble is real. This is augmented by teachers calling their stock brokers during teaching hours while their students wait for them to return to the classrooms. Above is real in certain Asian city.

Thu, 04/09/2015 - 10:18 | 5975090 GMadScientist
GMadScientist's picture

Funny. I have a vivid memory of my high-school English teacher ducking out of class to conduct a real-estate transaction in the states a few years back. Wonder how that turned out... heh

Thu, 04/09/2015 - 11:21 | 5975308 Niall Of The Ni...
Niall Of The Nine Hostages's picture

She'll be fine. She'll look back and realize being forced to do MILF porn was the best thing that ever happened to her.

Not like there's a future in gubmint schooling---and porn is the only trade where women can make nearly enough to retire on unassisted without a gubmint-mandated "equal opportunity" handicap.

(What? Teach was a he, you say? I say, not any more.)

Thu, 04/09/2015 - 10:29 | 5975121 Dr. Bonzo
Dr. Bonzo's picture

You don't really know shit about Hong Kong do you? Yacking about how to get rich quick and goddamned dimsum is all these fuckers yack about 24/7. The singular obsession with money and how to make lots of it fast and easy is nauseating, and it's nonstop. Whether ZH reports on it or not, whether the concept penetrates your skull or not.

4 years ago it was property... 2 years ago it was gold... now its stocks. All these morons do is crowd into trades and blow cash. Get it?

SMFH.

 

Thu, 04/09/2015 - 10:49 | 5975210 GMadScientist
GMadScientist's picture

They've just been under the thumb of communism for so long they're making up for lost time!

Thu, 04/09/2015 - 10:56 | 5975228 Dr. Bonzo
Dr. Bonzo's picture

H-O-N-G K-O-N-G scientist duuuuuuuuuuuuuuuude.......

Thu, 04/09/2015 - 11:27 | 5975324 vyeung
vyeung's picture

So that you get the idea:

4 years ago it was the start of the property boom.....now I've increased my net worth 5x and have a portfolio of property that produces yields in excess of 8% p.a

2 years gold.........SGE is now pricing it 20% above LBMA/Comex prices and we are about to have the price setting removed from the Comex/LBMA (not that you have any clue). Plus the price has been a give away ever since so I have zip clue about the bubble here.

With regards to crowed trades, I doubt you even know where the fark the HK Stock exchange is, let alone where the a fark Hong Kong is on the map, so.....DUMB ARSE ANYONE!

Thu, 04/09/2015 - 11:32 | 5975346 vyeung
vyeung's picture

being dumb is holding your nominal dollar whilst they increase the qty of fiat 4x.

I've managed to keep up and beat the devaluation of the ccy, I do not see your wages or whatever you are living off staying with asset prices in general. SO I ASK WHO'S THE DUMB FARK?

I think the last laugh is on yourself! So LYAO really doesn't help.

Thu, 04/09/2015 - 10:25 | 5975114 Dr. Bonzo
Dr. Bonzo's picture

You guys crack me up. These are the same dumbasses cloggin Chow Tai Fuk buying gold at all-time-highs... but then you all proclaim them fucking geniuses. LMAO. Fwiw... these decrepit sad sacks sit in little penny-stock shops day-in-day out all over the city doing this shit. The Macau gambling analogy is apt. If theyr'e not fritting away their earnings on bad stock plays they're on the overnight ferries to Macau to blow their hard-earned miserly income there. They're compulsive gamblers, whether its stocks, actual gambling, property, or gold. Get-rich-itis infects this whole fucking city. And piling into in the same trade is what they do best.

But go ahead and applaud their fucking brilliance when it's gold.

 

LMFAO.

 

Thu, 04/09/2015 - 10:50 | 5975215 GMadScientist
GMadScientist's picture

Pai Gow Market

Thu, 04/09/2015 - 11:20 | 5975302 vyeung
vyeung's picture

I guess being poor has its perks for you!

Please also enlighten us on what you know about GOLD and why you are able to price it say better than the SGE?

Your not financially literal period.

Thu, 04/09/2015 - 10:36 | 5975151 combatsnoopy
combatsnoopy's picture

The US needs to get China to remove barriers to the US financial sector.  Clinton failed in 1995 during the Multilateral Investment Agreement between the US and China, bring back Glass Stegall and cut capital gains tax to 0.

Thu, 04/09/2015 - 11:05 | 5975162 vyeung
vyeung's picture

No ones really sure who's bidding up the HSI. The cross border tranche from the China side has been used up but the HK side still has quite alot of quota left.

With regards to housewife investing, yes you have a strong culture of it and before the average keyboard worrier discount their instinctive ability alot of them are already muti-millionaires, financially independent and pretty street smart. Yes you have your dumb arses too.

What is happening is highly unusual for sure.

Thu, 04/09/2015 - 10:40 | 5975171 Budnacho
Budnacho's picture

Just bought 10,000 Shares from my Asian-Markets Advisor Long-Duk Dong. 

Thu, 04/09/2015 - 10:46 | 5975194 MEFOBILLS
MEFOBILLS's picture

The average person is immersed in money and prices.  People take signals they barely understand, and then let those signals drive their behavior.

There is no question about it, money and prices are a control system for humans.   Like a fish in water, a human is immersed in money and prices. This is why money power needs to be moral and legal.  Without legal moral money, high-trust civilizations are unlikely.  We will not evolve.

People’s simple behavior predicated by prices is why original money masters, Jews – think Goyim are cattle.  Goy can be led with money and prices.  Kabala occult methods are further used to enforce illuminist control methodology, creating hidden vertical (pyramid) money power structure.  Chinese people on average, are superstitious, and hence will easily fall prey to Zohar and ancient Talmudic/ Babylonian control grid.

To my mind it can be reduced to this: debt instruments are hung on populations as control means.  Populations then take out new loans, and this private credit is then directed into “markets.”  This new credit then asset inflates what it points at, which in this case is stocks.  More credit then comes on-line with yet more loans, in a positive feedback scenario, pushing up prices, signaling to Goy to borrow and buy more.

At some point in future, real productivity does not keep up with prices.  People cannot work to produce goods-as- prices to then pay for their loans.  Also, said former credit that came on line quickly per unit time, is now being grabbed out of money supply and vectoring to bankers quickly per unit time.  In other words, all credit loans are usury front loaded, and this usury passes to banker on front of loan.  This drains money supply and enriches banker while leaving private debts in place.  Banker can now use his stored usury money to buy goods and services at cheap prices.

A stock market collapse leaves private debts high, and that then causes debt depression.  No new private loans will be formed with now saddled debtors, hence no new credit formation, and positive feedback swings in the opposite direction as the money supply rapidly reduces; former credit money is grabbed to pay-off former debts.  This accelerates into rapid depression unless there is counter-spending by government.  Keynes couldn’t fix flawed credit system, all he did was identify its flaws and hence the can was kicked down the road to us.

Bankster private credit system is inherently flawed, and its flaws are used to control populations.   Welcome to the matrix.

For profit corporations should not be making debt instruments against humanity, to then harvest man’s life energy and real assets.

www.sovereignmoney.eu

Thu, 04/09/2015 - 11:18 | 5975281 vyeung
vyeung's picture

your philosophical point of view maybe a great exercise at Universities and the new architects of the modern world, but at alot of us normal people need to find the edge and angle to make that thing that spins the world.

Disliking it will only bring suffering, discontent and the destruction of ones potential (no $$$ no talk is quite true!). US use to be a nation where getting ahead was a good thing, seems like now its following stinky old Europe where the elite like to keep their working class working and to promote the idea that $$$ is second class. Could not be further from the truth!

Debt is not evil if used wisely. Anyone who knows how to analyze corporate financials can tell you that. Your assertions are but half truths.

Thu, 04/09/2015 - 11:59 | 5975411 Magnum
Magnum's picture

Lanky Chinese housewives on their back legs wrapped around your neck is another hedge.

Thu, 04/09/2015 - 12:11 | 5975444 robertocarlos
robertocarlos's picture

"The horses are on the track". A hot stock would be India Oats.

Thu, 04/09/2015 - 14:04 | 5975786 SmittyinLA
SmittyinLA's picture

Actually a lot of people will get "squeezed out" of the robot tech investment wave, you don't want to be broke and trying to compete with a better well capitalized robot, you will lose. 

 

Those who invest in replacing others will replace others.

 

"I bought an iphone instead of a robot that builds iphones, now I'm unemployeed but got a nice phone, and the guy that invested in the robot factory that makes iphones rents my wife on Tuesday nights"

Dont be that guy 

Thu, 04/09/2015 - 14:49 | 5975977 pashley1411
pashley1411's picture

I would fly to HK just to see a WilliamBanzai exposition.   The price to stay there might become pretty reasonable soon.

Like always, when you really really need a buyer for your paper, there won't be one, at any price.    That's not "investing", that's a firing squad.

And consumption in the Chinese "investing" public will, for some time, will be low.   Real low.

Thu, 04/09/2015 - 14:49 | 5975978 pashley1411
pashley1411's picture

dup

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