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Meet China's New 'Investor' Class: "It's A Lot Easier To Make Money From Stocks Than Farmwork"

Tyler Durden's picture




 

After a very modest drop last week, outstanding margin trading balances in China have resurged to record highs this week as 'correction' dip buyers rampage back into the markets, hopeful of China's inclusion in (and devastation of) the MSCI indices.

 

With China's market cap now nearing $10 trillion (40% of USA's, up from just 14% last year)...

 

...we thought a profile of just who is buying Chinese stocks - from plastic umbrella makers up 3000% this year to ponzi schemes like Hanergy. As one middle-aged rural Chinese chap exclaimed jubilantly, "it's easier to make money from stocks than farmwork."

 

So - do you really want this kind of volatility in the MSCI indices? If China corrects now it will wipe out trllions of wealth from the average Chinese person... at a time when regulators are urging professional asset managers NOT to speculate in stocks.

 

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Tue, 06/09/2015 - 13:29 | 6179282 centerline
centerline's picture

Are they flipping huts yet?

Tue, 06/09/2015 - 13:31 | 6179290 InjectTheVenom
InjectTheVenom's picture

ruh-roh . . . .

Tue, 06/09/2015 - 13:32 | 6179300 NoDebt
NoDebt's picture

"it's easier to make money from stocks than farmwork"

Same rationale as Welfare.

Tue, 06/09/2015 - 13:36 | 6179320 KnuckleDragger-X
KnuckleDragger-X's picture

It sure didn't take long for them to do the BTFD dance and their market has even more government magic going for it......

Tue, 06/09/2015 - 14:22 | 6179520 MonetaryApostate
MonetaryApostate's picture

Maybe BTFD means Beware the f__king depresssion (looming)....

Tue, 06/09/2015 - 13:37 | 6179326 New England Patriot
New England Patriot's picture

But you can't eat it.

Tue, 06/09/2015 - 13:42 | 6179350 Bunghole
Bunghole's picture

Can they take a HELOC for granite countertops and a new oxen?

Thu, 07/02/2015 - 17:58 | 6263941 disabledvet
disabledvet's picture

Nothing wrong with food stamps if you're a farmer.

A fisherman won't like them though...

Tue, 06/09/2015 - 13:31 | 6179289 Ignatius
Ignatius's picture

Beats workin' for a living, or so is their thinking now.

Tue, 06/09/2015 - 13:39 | 6179321 NoDebt
NoDebt's picture

Back in the late 80s I was turning wrenches at a Ford dealership.  Back in the days of the "5-oh Mustang" and the original bubble-shaped Taurus.  EFI/computer controls were not brand new, but lots of stuff required the car be driven around while readings were taken over a period of time (you could do this with a smart phone and a USB cable today).  

But back then it was a dedicated box.  A box that happened to be called "SBDS".  Now I don't recall any more what those initials ACTUALLY stood for, but I know what we mechanics said it stood for:  Sure Beats Doing Something.  Plug in a cable and drive a car around for a while.  Yes, it sure did beat actually doing something like breaking a sweat repairing the car.

 

Tue, 06/09/2015 - 14:33 | 6179590 mtl4
mtl4's picture

Service Bay Diagnostic System (SBDS)

 

I too turned wrenches back in the day but was lucky enough to be doing it on Toyotas.......that was back when cars were actually made in Japan with some sort of precision.

Tue, 06/09/2015 - 14:44 | 6179645 NoDebt
NoDebt's picture

Wow, I never thought I'd run into a fellow ZH'er who would know that.  Good memory.

Thu, 07/02/2015 - 18:05 | 6263966 disabledvet
disabledvet's picture

We know everything. here.

"Welcome to the know it all machine."

Up yours Bill Gates!

Tue, 06/09/2015 - 13:48 | 6179372 This is it
This is it's picture

Gou houme, fat boy!

Be a man!

Tue, 06/09/2015 - 13:31 | 6179291 This is it
This is it's picture

But it's true...

Tue, 06/09/2015 - 13:34 | 6179313 Philo Beddoe
Philo Beddoe's picture

A billion or so bagholders. This should be fun to watch.  

Tue, 06/09/2015 - 13:38 | 6179330 KnuckleDragger-X
KnuckleDragger-X's picture

Its a good thing that half their military budget is for internal troops.....

Thu, 07/02/2015 - 18:08 | 6263977 disabledvet
disabledvet's picture

LONG AXE HANDLES!

Tue, 06/09/2015 - 13:35 | 6179316 Panic Mode
Panic Mode's picture

They also forgot the fact it is a lot quicker to lose in stocks. Of course, it will never happen to them .....

Tue, 06/09/2015 - 14:25 | 6179534 BeaverCream
BeaverCream's picture

Cmon man, quit being a downer.  Everything always goes up forever, no one loses, just put your money in cmon you're an idiot if you think this is going to end up badly.

Tue, 06/09/2015 - 13:31 | 6179293 TungstenBars
TungstenBars's picture

Yup. This is going to work out just finee.

Tue, 06/09/2015 - 13:32 | 6179298 Panic Mode
Panic Mode's picture

Every investor always thinks he is the winner.

Tue, 06/09/2015 - 13:34 | 6179306 JustObserving
JustObserving's picture
Shares Of Chinese Umbrella Manufacturer Rise 2,700%

When umbrella makers are rising 2700% a year, farmwork is so damn inefficient.  Actually, any work is so inefficient in comparison.

http://www.zerohedge.com/news/2015-06-08/when-it-rains-it-pours-shares-c...

Tue, 06/09/2015 - 14:31 | 6179575 Zen Master
Zen Master's picture

Umbrella Corporate stocks are skyrocketing...when do the zombies come out of the under ground facilities?

Tue, 06/09/2015 - 13:34 | 6179308 LawsofPhysics
LawsofPhysics's picture

Yes, unfortunately that "money" has less and less purchasing power..

Some people will eat well, most wil not...

same as it ever was...

Tue, 06/09/2015 - 13:34 | 6179311 gwar5
gwar5's picture

Well, good for the rice farmers. But better be sitting on some bags of their rice when the rigged markets bite back. Is there a Chinese MFGlobal?

Tue, 06/09/2015 - 13:54 | 6179395 tarabel
tarabel's picture

 

 

How Stone Age can you get?

You know perfectly well that this year's rice crop is hedged and pledged already.

And then margined against.

The South Sea Tulip Dot Con rolls on to its ever-astonishing conclusion.

Tue, 06/09/2015 - 13:37 | 6179324 Dr. Engali
Dr. Engali's picture
"It's A Lot Easier To Make Money From Stocks Than Farmwork"

 

 

I see the Chinese have been conned into believing that their fiat is money too. One would think that they would have learned that lesson long ago.

Tue, 06/09/2015 - 13:48 | 6179374 NoDebt
NoDebt's picture

It works for all races, creeds and religions, apparently.  

Tue, 06/09/2015 - 13:52 | 6179391 insanelysane
insanelysane's picture

Cycles, cycles, cycles, humans are doomed to repeat because of their basic wiring.  Some are different but most aren't.

Tue, 06/09/2015 - 13:37 | 6179325 DavidC
DavidC's picture

I feel sorry for them. It's just like the 90s in the USA, people giving up jobs to 'day trade' thinking they knew how to trade and then getting wiped out by the tech bubble burst.

Trading is the hardest thing I think I've ever done - particularly in the last 7 years when insanity has replaced any fundamentals.

DavidC

Tue, 06/09/2015 - 15:18 | 6179789 LawsofPhysics
LawsofPhysics's picture

I was thinking the exact opposite with respect to the last 7 years.  It became crystal clear to me in 2009 that there was no longer any price discovery and the criminals were in charge.  With the exception of some trusted heirloom stocks that pay nice dividends, I am back out.  Plenty of real work to do that is paying just fine right now.

They ramped the "markets" back to hold off the guillotines, temporarily, but there is no spoon David, period.

Tue, 06/09/2015 - 13:39 | 6179336 PTR
PTR's picture

"Don't do it."

-1999

Tue, 06/09/2015 - 13:44 | 6179360 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

I was just going to make a 1999 comment. Sure looks awfully similar....

Tue, 06/09/2015 - 14:31 | 6179580 Falling Down
Falling Down's picture

+1000

I was hoping for a '99 comment.

 

Tue, 06/09/2015 - 13:42 | 6179348 gdiamond22
gdiamond22's picture

Me luv stock long time

Tue, 06/09/2015 - 13:51 | 6179386 European on my ...
European on my shoe Jimmy's picture

Just went to the Cryogenic vault, asked Jesse Livermore '1929 or what'
He said 'buy with both hands"

Tue, 06/09/2015 - 14:00 | 6179420 gdiamond22
gdiamond22's picture

There's a reason why Livermore died broke.

Speaking of not being broke - walked into a hotel bar to meet a buddy last night and who is right beside me in a chair?? None other than the "thats why I'm richer than you" Jamie Dimon. His suit looked like it was at least $10K and he had 2 50yr old Pumas ready to pounce on him with a bag of Cialis. It took every bit of strength for me not to toss my drink on him and say "you're welcome for the bailout, you little prick" perhaps I'll regret it soon enough but hopefully he receives much worse when his time comes due.

Tue, 06/09/2015 - 14:27 | 6179548 scubapro
scubapro's picture

toss your drink on him??  wuss.    im sure you couldve found a steak knife and waited him out in the loo.

Tue, 06/09/2015 - 14:34 | 6179596 gdiamond22
gdiamond22's picture

No doubt.

Tue, 06/09/2015 - 15:09 | 6179759 markovchainey
markovchainey's picture

I wish you hadn't had such self control!

Tue, 06/09/2015 - 13:51 | 6179383 cheech_wizard
cheech_wizard's picture

Perhaps what will become the world's reserve currency for the shortest period in history...

Tue, 06/09/2015 - 13:55 | 6179401 Silverhog
Silverhog's picture

50 Shades of 1929

Tue, 06/09/2015 - 13:57 | 6179408 insanelysane
insanelysane's picture

Do these rural investment buildings have "chinese walls" inside to separate the traders and analysts?

Tue, 06/09/2015 - 13:58 | 6179413 Winston Smith 2009
Winston Smith 2009's picture

"When Your Banana-Guy Starts Trading Stocks, You Know It's Over"

http://www.zerohedge.com/news/2015-04-24/when-your-banana-guy-starts-tra...

Tue, 06/09/2015 - 14:05 | 6179437 Finnman
Finnman's picture

I think it's easier to make much mony if buying houses. At least in my country.

Tue, 06/09/2015 - 18:37 | 6180530 BrosephStiglitz
BrosephStiglitz's picture

Best place to be is in "money" right now.  Keep your pockets deep, and keep them liquid.  The greatest asset firesale for the last 100+ years is on its way.

The big problem is knowing what "money" will be tomorrow after the monetary system is bastardized and turned into an electronic travesty.

Edit: And yes yes, people will say "phys" but that really depends.  Don't think it is common enough to be used as an alternative these days.  I'm hedged in case it is the case regardless but.. better to diversify some just in case. 

Also- I sense China's modern-day variant of the 1929 Stock Crash coming. The markets probably will go higher in real terms long run, but it could take 15-20 years after this peak.

Tue, 06/09/2015 - 14:07 | 6179451 walküre
walküre's picture

Good, whatever keeps their mind off from bidding up Westcoast real estate.

They can finally gamble at home and get much richer.

Now, what about that peg? Time to remove it before their insanity buys up the world 30x over (stock valuations already 40% of US markets).

Tue, 06/09/2015 - 14:14 | 6179471 Bunga Bunga
Bunga Bunga's picture

American fellowes, go all in in Shanghai, the Chinese recommend this. What can go wrong?

Tue, 06/09/2015 - 14:15 | 6179472 starman
starman's picture

Hm I remember not long ago pizza boys were killing it on the NYSE.

It didn't end that well for most.

Tue, 06/09/2015 - 14:29 | 6179563 cassotto
cassotto's picture

yea they sure like to gamble, especially with leverage

Tue, 06/09/2015 - 14:38 | 6179616 vyeung
vyeung's picture

not good. The bubble was induced by allow them to open multiple trading accounts which before were not allowed. Happened around 3-weeks ago. But opporunities will be presented in the event of a correction. So, waiting waiting.

Atleast when they go bust hopefully they won't go full retard and demand a government bailout like how wall street likes it.

Tue, 06/09/2015 - 14:42 | 6179631 Goldbugger
Goldbugger's picture

Better Keep Pitchfork when stock crash.

Tue, 06/09/2015 - 15:17 | 6179791 giggler321
giggler321's picture

those 8K of penny stocks include an investmnt in a company that makes pitchfolks - what happens then when they reprice is unclear!

Tue, 06/09/2015 - 14:43 | 6179638 zeroaccountability
zeroaccountability's picture

If it sounds too good to be true.........

Tue, 06/09/2015 - 14:45 | 6179641 Jtrillian
Jtrillian's picture

There are a couple of huge differences between China and the USA.  First, they make stuff so there is real value to their economy (as opposed to our consumer based economy based on debt).  Second, the Chinese government has been buying all the Gold it can get it's hands on as opposed to the US where gold is shunned by our government and repeatedly refuses an audit of it's holdings. 

I suspect China's market is just getting started while the Western Economy falters.  There is a shift in the economic balance of power taking place and China is looking to be #1. 

“China is a sleeping giant. Let her sleep, for when she wakes she will move the world.”
- Napoléon Bonaparte

Tue, 06/09/2015 - 15:13 | 6179774 Government need...
Government needs you to pay taxes's picture

But our payday and car title loan services are best-in-the-world.

Tue, 06/09/2015 - 14:45 | 6179648 q99x2
q99x2's picture

Think of what it can do for the Chinese as a means to buy up the world. It is the same gimmick that the FED uses to transfer money to the bankers. Except, China is giving the money to everyone instead of only the elite.

Tue, 06/09/2015 - 14:47 | 6179657 bluskyes
bluskyes's picture

I remember those heady days in 1999

Tue, 06/09/2015 - 14:50 | 6179666 Shaznardickleze...
Shaznardickleze the Doon's picture

As far as downline goes in this global ponzi, China is a paystreak for the last huzzah. The Indians can't be fooled away from their gold and silver easily. The Chinese have a history of swapping silver for opium, they'll swap other commodities for hopeium.

Tue, 06/09/2015 - 15:03 | 6179734 Thick Willy
Thick Willy's picture

Lots of typically snide comments but these people are making money hand over fist in the market.  How's that gold and silver investment working out for you?

At what point do you just admit you're a retard for preferring to take 40% losses on precious metals over 250% gains in stocks?

If you liquidated your PMs 2 years ago and went all in stocks you'd have just about made up your crippling losses by now.

Tue, 06/09/2015 - 15:16 | 6179785 Government need...
Government needs you to pay taxes's picture

I agree with you, and in theory, partial ownership of a productive, profitable company is an investment that grows with the profitability of the company.  Gold doesnt grow. However, one can possess gold and physically move gold.  one cant possess a fractional paper-ownership of a company or move the company (as a practical matter).

Tue, 06/09/2015 - 15:35 | 6179864 Clowns on Acid
Clowns on Acid's picture

But it depends what price one pays for that "productive profitable company". Keep thinking though.... you'll get there...

Tue, 06/09/2015 - 15:20 | 6179798 henry chucho
henry chucho's picture

What more proof do you need that the Federal Reserve Bank has destroyed the entire global monetary system?

Tue, 06/09/2015 - 15:23 | 6179809 Conax
Conax's picture

I don't see any difference between Chinese farmers sloughing off work to trade equities and American traders doing the same thing.

Welfare, indeed.  Here we call it the 'financial industry', a misnomer since there is no 'industry' involved, but sucking on a money siphon.

Sucking on the hose all day is work, I suppose. You do have to be clever to make it.

No difference, you paper trading snobs.

Tue, 06/09/2015 - 16:08 | 6179987 Muc Metals
Muc Metals's picture

 

 

 

 

This time it's diffelent...

 

 

Wed, 06/10/2015 - 00:43 | 6181437 onmail
onmail's picture

Dont be a nut

While west kept the gold price down to protect its currencies from downfall,

    China bought most of it

In case of a recession, it will take only one day to make correction,

    When China declares its currency's independence from dollar 

         And adapts the gold standard

As simple as that

While you people in west rot & fume about your prospects,

East will rise 

Rise & Shine

Fri, 06/26/2015 - 19:00 | 6239593 LithiumWarsWAKEUP
LithiumWarsWAKEUP's picture

Can you explain again about 'margin'? Thanks in advance...

Tue, 06/09/2015 - 19:09 | 6180664 reader2010
reader2010's picture

The Commies, I mean the cronies,  precisely know how to win the hearts & minds of the people. The late Kapitalism Shanghai style is better than NYC Shit? 

Tue, 06/09/2015 - 22:36 | 6181219 GotGalt
GotGalt's picture

Once I start hearing that Hooter waitresses are giving up their jobs to become China day traders, then I will know the top is truly in.

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