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Chinese Stocks Plummet Despite Government Threats To Shorts, Europe Lower, US Closed
The Greece impasse set to culminate on Sunday continues to have a massive impact on at least one stock market, unfortunately it is the wrong one, located on a continent which is mostly irrelevant to the future of the Greek people (unless that whole AIIB bailout does take place of course). We are, of course, talking about China which as noted earlier, started off horribly, plunging over 7% with over 1000 stocks hitting 10% limit down, then in the afternoon session mysteriously recovering all losses and even trading slightly higher on the day, before the late selling returned once more, and the Shanghai Composite plunged to close down 5.8%: a ridiculous 20% total roundtrip move!
This brings the total drop since the highs less then three weeks ago to just over 28% (and 33% for the Nasdaq-equivalent Shenzhen) the biggest 3-week plunge in 23 years.
What is most troubling is that, as we noted last night, this clear bubble bursting is not done with the government's blessings - as should have been the case since a crash was clear to anyone - but despite the government constant attempts to intervene and prop up the bubble.
It all started with appeals to buy and hold because, well, it's patriotic: "Fan Shaoxuan, a senior executive at Weibo TV who has more than 12,000 followers on Sina Weibo, posted a photograph showing the slogans: “Hold stocks with confidence. Win glory for the country even if you lose the last penny."
Then overnight Bloomberg reported that in one sign of utter desperation, China is telling underwater investors to literally "bet the house on stocks" because under new rules announced Wednesday real estate is now an acceptable form of collateral for Chinese margin traders, who borrow money from securities firms to amplify their wagers on equities. Clearly this also means if share prices fall enough, individual investors who pledge their homes could be at risk of losing them to a broker.
While the rule change was intended to help revive confidence in China’s $7.3 trillion stock market, down almost 30 percent in less than three weeks, analysts say securities firms may be reluctant to follow through. Accepting real estate as collateral would tether brokerages to another troubled sector of the economy, adding to risk-management challenges as they try to navigate the world’s most-volatile stock market.
“It does come across as relatively desperate,” said Wei Hou, an analyst at Sanford C. Bernstein & Co. in Hong Kong. “Globally, illiquid assets such as real estate are not accepted as collateral as they are very hard to liquidate.”
“Brokers are not stupid,” said Hao Hong, a China strategist at Bocom International Holdings Co. in Hong Kong. “I don’t think they would be willing to take this kind of collateral.”
For more on China's margin debt and Umbrella Trust problem read our article from earlier in the week:
But the real desperation was revealed overnight when China effectively hinted anyone caught shorting would be put in front of a firing squad (metaphorically, we hope)
BREAKING: China suspended 22 short-selling accounts of stock index futures amid stock market crash - @Reuters ???????????????????22????????
— George Chen (@george_chen) July 3, 2015
It wasn't just the shorts: a crackdown on "manipulators", which really means sellers, has also been launched:
China's securities watchdog announced Thursday it will investigate suspected manipulation of the stock market following weeks of plummeting stocks and future markets. Zhang Xiaojun, spokesman of the China Securities Regulatory Commission (CSRC), said they will investigate possible illegal activities occurring in multiple markets. He said they have tracked irregularities between securities and futures trading.
Even Morgan Stanley was mysteriously dragged into the blame game:
State newspaper backed by PBOC named Morgan Stanley a foreign bank with "suspicious purposes" in Chinese stock market pic.twitter.com/PEF0ZHYifH
— George Chen (@george_chen) July 3, 2015
And if indeed the Chinese government is now helpless to halt the all out rout which, as we have warned countless times over the past 6 months, will leave millions of Chinese "traders" with nothing and thus desperate and angry, then the next step is also very clear and was laid out last week in a note by Nomura which warned that "A Market Crash "Poses Great Danger To Social Stability."
Because a civil war over a market crash is all this worlds needs right now.
Hopefully there will be no civil war in Greece after this weekend's referendum which those who are not watching their paper "profits" vaporize in China, will be watching closely as tthe fate of the Eurozone may well depend on the outcome of the vote.
For now, however, unlike in China European trading is muted perhaps because unlike in China, the European Central Bank long ago became the primary marginal source of risk demand.
In what will most likely be a front-loaded session with the US away from market today, price action has been relatively subdued. In terms of the current state of play, the latest Ethnos poll shows there is not much between the 'yes' and the `no' vote, while Varoufakis remains optimistic that a deal can be done in the event of a `no' victory, although his European counterparts fail to share his optimism. Therefore, given the uncertainty surrounding the event, markets started off on a relatively tentative footing with equities drifting lower with selling pressure relatively broad-based while fixed income products have been provided a bid tone.
Elsewhere, in FX markets EUR/USD has been relatively resilient to the otherwise dampened sentiment for Europe. This is likely a continuation of the recent trend which has seen prices largely swayed by carry trade flow which sees purchases of EUR when the market is presented with bad news. AUD/USD has continued to extend on losses after stops were tripped on the break of June low of 0.7587. Of note, AUD underperformed overnight following lower than expected Australian retail sales data (0.3% vs. Exp. 0.5%), while soft Chinese HSBC PMI readings further weighed on the currency. Finally, GBP was lent some support by the latest services PMI data (58.5 vs. Exp. 57.5).
In the commodity complex, WTI and Brent crude futures trade with minor losses in the wake of yesterday's Baker Hughes data. In terms of commodity specific newsflow, participants continue to keep an eye on negotiations between Iran and their counterparts with the latest reports suggesting Iran are finally paving the way to allow inspectors access to some of their nuclear facilities. With this in mind, some have suggested that sanctions could be lifted by as soon as December.
According to Genscape, flows from the Marathon to Catlettsburg pipeline have increased to 210k bpd from 141k bpd. (RTRS)
In metals markets, spot gold and silver trade relatively unchanged while Nickel extended on recent losses overnight in the wake of disappointing Chinese PMI data. Iron ore prices continue to be weighed on by increasing supply levels with reports suggesting that China will allow Vale's 400,000 tonne mega-ship access to its ports
In summary: European shares remain lower, though are off intraday lows, with the basic resources and banks sectors underperforming and real estate, tech outperforming. Euro-area services PMI rises in line with estimate, U.K. services PMI above. Greeks split evenly on Sunday’s referendum, poll shows, more than 4 in 5 want to keep euro. ECB said to extend backstop to Bulgaria. Shanghai Composite drops 5.8%. U.S. markets closed for holiday. The Spanish and Swiss markets are the worst-performing larger bourses, the Dutch the best. The euro is stronger against the dollar. Japanese 10yr bond yields fall; Spanish yields decline. Brent crude, WTI crude fall.
Market Wrap
- S&P 500 futures little changed at 2068.5
- Stoxx 600 down 0.2% to 384.8
- German 10Yr yield down 1bps to 0.84%
- MSCI Asia Pacific down 0.4% to 146.4
- Gold spot up 0.2% to $1168.9/oz
- Eurostoxx 50 -0.3%, FTSE 100 -0.2%, CAC 40 -0.3%, DAX -0%, IBEX -0.4%, FTSEMIB -0.3%, SMI -0.3%
- Asian stocks fall with the Sensex outperforming and the Shanghai Composite underperforming; MSCI Asia Pacific down 0.4% to 146.4
- Nikkei 225 up 0.1%, Hang Seng down 0.8%, Kospi down 0.1%, Shanghai Composite down 5.8%, ASX down 1.1%, Sensex up 0.5%
- Euro up 0.26% to $1.1113
- Dollar Index down 0.21% to 95.91
- Italian 10Yr yield down 3bps to 2.29%
- Spanish 10Yr yield down 5bps to 2.26%
- French 10Yr yield down 1bps to 1.29%
- Brent Futures down 0.7% to $61.6/bbl, WTI Futures down 0.7% to $56.6/bbl
- LME 3m Copper up 0.1% to $5799/MT
- LME 3m Nickel down 0.2% to $12170/MT
In conclusion, here is the traditional overnight market recap courtesy of DB's Jim Reid
I'm sure this comment will come back to haunt me but it looks set to be a quiet day given that the US will be celebrating Independence Day and the rest of the market will be in a holding pattern ahead of Sunday's Greek referendum. Given I've just said this, cue mayhem to break out somewhere today. I'll just be glad to be in the office away from the adoring crowds at home as on primetime TV in the UK last night my wife, bump and Bronte were on a small section of "Dogs. Their secret lives". In the unlikely event you're interested let me know and I'll send you a short clip.
The Greek go to the polls on Sunday with voting taking place between 7am to 7pm local time which is 2 hours ahead of London time. As yet there is no confirmation that an exit poll will be conducted but if there is this will clearly be the starting point for Sunday night/Monday morning's fun and games. We expect results to start filtering through after around an hour with the closeness of the result dictating whether we'll know the outcome before Asia opens.
DB will be hosting a conference call on Sunday night 9pm London time to discuss where we are at that point. The dial-in details are at the end. We recommend that you dial-in 15 minutes ahead of the start of the call as we'd expect high demand.
Yesterday markets briefly put Greece to one side to focus on a slightly below market US payrolls print (223k vs. 233k expected). A cumulative 60k of downward revisions to the previous two months was also announced and having peaked at 2.462% in the moments before the reading, 10y yields tumbled about 10bps following the print before closing at 2.382% and 4.0bps lower in yield on the day. The Dollar index also pared some early gains before eventually closing -0.20% down on the day. US equities were more muted meanwhile with the S&P 500 (-0.03%) and Dow (-0.16%) broadly unchanged on the day. Following the report, we also saw a decent re-pricing across Fed Funds contracts. The Dec15 (-2.5bps), Dec16 (-5bps) and Dec17 (-5bps) contracts all declined to 0.290%, 1.030% and 1.740% respectively and in terms of what’s priced in now, Bloomberg are reporting that based on futures contracts, the probability of a September hike fell from 35% (on Wednesday) to 29% yesterday, while the probability of a December move fell from 72% to 67%. The moves were seemingly sharper in the moments immediately following the report before markets settled down, but still a reasonable re-pricing.
An interesting story also came out of the ECB yesterday after we heard that the Bank widened the eligible assets under its purchasing program to include 13 state-backed (or part state-backed) companies. The new additions appear to
have been identified as ‘agency issuers’, although interestingly some of the names are also members of some European corporate bond indices raising the questions of why other companies with government ownership haven’t been included. One to keep an eye on.
Ahead of Sunday it was actually a fairly quiet day for headlines out of Greece yesterday (relative to the last week or so). Finance Minister Varoufakis said that he ‘will not’ continue in his post in the event of a yes vote while Tspiras rather vaguely said that in that event he would ‘put in motion procedures foreseen by the Constitution’. The IMF also suggested that the cost of a third program for Greece through 2018 would be around €52bn. In a report, the Fund also argued that Greece would need debt sustainability measures including a doubling of maturities on existing loans. In anticipation of Sunday, DB’s George Saravelos noted in his latest outlook published yesterday that the referendum appears to be too close to call. He says that irrespective of the outcome, there is unlikely to be an immediate resolution of the crisis the next day. A yes vote still carries risks while a no vote opens a wide range of possibilities. Interestingly, George notes the domestic political situation is becoming a lot more tense. Yesterday four coalition government Independent Greek MP’s were said to have voiced their disagreement with the referendum and called for its withdrawal, stating that they would vote yes. This should be seen in the context of a government majority of 11. As we go to print, the results of the latest poll (run by the University of Macedonia) have in fact just hit the wires which show an even split of votes at 43% each for yes and no. The remainder were said to have been undecided or declined to answer.
Staying in Europe, equity markets were fairly subdued in the region for the most part yesterday, declining once the US session kicked in. The Stoxx 600 (- 0.91%), DAX (-0.73%) and CAC (-0.98%) all fell, while steeper declines were felt in the FTSE MIB (-1.43%). Sovereign bond yields moved wider generally. 10y Bunds moved 3.3bps wider to 0.844%, while in the periphery Italy (+3.0bps), Spain (+3.4bps) and Portugal (+7.7bps) also moved wider. Interestingly, Greek 10y (-25bps) yields moved lower for the second consecutive day. 10y yields in Sweden were sharply tighter (-8.8bps) meanwhile after the Riksbank cut the repo rate by another 10bps to -0.35% and surprising the market. The Riksbank also announced that it is to expand the bond purchasing program by an additional 45bn kronor, adding to the already 80-90bn kronor program.
Recapping the rest of yesterday’s data, in conjunction with the payrolls report we also saw the unemployment rate tick down two-tenths of a percent to 5.3% (vs. 5.4% expected) and to the lowest level now since April 2008. DB’s Joe Lavorgna noted the fall was supported by a plunge in the labour force participation rate, which fell to 62.6% from 62.9%. This is in fact the lowest reading since October 1977. Average hourly earnings disappointed (0.0% mom vs. +0.2% expected) having stayed unchanged during June and resulting in the annualized rate dropping down to +2.0% yoy (from +2.3%). The household survey also reported a 56k decline in employment during the month. Meanwhile, initial jobless claims rose 10k last week to 281k (vs. 270k expected) while factory orders for the month of May fell by more than expected (-1.0% mom vs. -0.5% expected). Finally the ISM NY rose 7.1pts to 63.1, the joint highest reading this year. Euro area PPI was the only notable highlight of a quiet European data calendar yesterday, with the 0.0% mom reading for May below expectations of +0.1%.
Refreshing our screens this morning, it’s all about China once again where the Shanghai Comp (-3.25%) and Shenzhen (-3.14%) have taken yet another steep leg lower this morning. The Shanghai Comp in fact traded as much as 7% down at one point with the index now nearly 12% lower this week alone (including a high-to-low range of nearly 16%). This index is now on track for its steepest three-week decline since 1992. There are reports (Bloomberg) that the China Securities & Regulatory Commission is investigating recent short selling activity and is set to ‘strictly’ punish any signs of manipulation found. Elsewhere, it’s fairly weaker across the board. The Nikkei (-0.22%), Hang Seng (-0.23%), Kospi (-0.25%) and ASX (-1.17%) have all tracked the move lower. Meanwhile data in China has done little to help lift sentiment. The compositeJune PMI reading has fallen 0.6pts to 50.6, dragged down by a 1.7pt fall in the services reading to 51.8. In Japan the composite reading declined 0.1pts to 51.5, while the services reading rose to 51.8 (+0.3pts).
Moving on, as discussed at the top, this morning our Euro HY monthly reviews H1 and updates our outlook for H2. At the start of the year we felt it would be a positive year for HY credit with our firm bias for single-Bs (on a cheap relative value basis) and for a better H2 than H1. The better H2 was due to concerns that Greece and the Fed would cause volatility and periods of weakness in H1 before a resolution in the former and a turn more dovish for the latter in H2 as growth struggled to meet the consensus and the Fed's forecasts. This theory is going to be tested in the days, weeks and the months ahead but we stick broadly to the same script even if the Greece saga looks set to continue longer than we could have imagined at the start of the year. This week's price action has given us some comfort that Greece can be contained even if an accident would lead to a period of risk-off. Expect the ECB to provide more stimulus and the Fed to err on the side of caution in this scenario.
Single-Bs are no longer the stand-out relative value they were at the start of the year and all four rating main corporate rating bands (As through to Bs) are now back grouped broadly together again from a relval perspective for the first time in 18 months. In this time single Bs have gone from being very expensive a year ago to very cheap 6 months ago. Because we think credit will have a better H2 than H1 we still would have a preference for single-Bs and HY in general over IG but it’s more because of a desire to be exposed to high beta and the higher carry now rather than an obvious relative value play.
Our central case scenario is that European HY spreads will be 90bps tighter by YE 2015 with no Grexit and no Fed hike. However with scenario analysis assessing various Greek and Fed risks the weighted average tightening by year-end is around 40bps. Please see the link in your mailbox from Nick Burns in the last hour or so for the full report.
Wrapping up, with a US holiday today it’s a fairly quiet data day ahead. News flow in Europe will be centered on the final composite and services PMI readings for the Euro area, Germany and France as well as readings for the UK, Italy and Spain. Euro area retail sales are also due while it goes without saying that Greece headlines will be closely watched ahead of Sunday’s main event.
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Despite Government Threats To Shorts
One person can stop a tank.....I have pictures.
What the fuck is orchestrating this tug-of-war? It sure as hell ain't natural.
It sure as hell ain't natural.
Stop....and think about that statement again.
China has been envaded by the HFT. A man made island damn sure can't stop that. Muricans, making friends and influencing people around the world.
Although the virus of unfettered "investment banking" is probably being spread to China, let us not forget that the Chinese are routinely regarded as degenerate gamblers. They will place bets on the possibility of their neigbhor placing a bet. The stock market, even from the days of transacting business on the curbs of southern Manhattan, has always been a glorified gaming parlor. Perhaps the Chinese would be better off betting on cock fights than betting on the suspicious companies that inhabit their stock indexes.
This is what happens when officialdom values/favors asset inflation over the productive economy. And pretty much everything else.
Jeez . . . why haven't the Chinese learned from the Americans?
Real time S&P Futures trading today:
http://www.investing.com/indices/us-spx-500-futures-streaming-chart
Bund futures looking hopeful:
http://www.investing.com/rates-bonds/euro-bund-streaming-chart
You knew the Chinese stock markets were about to top when they allowed short selling....its time for the ppl in the know to fleece the retail sheep in China....
When I saw that ZH chart the other day about the volume of margin trades i had a bad feeling this would happen. Why did they let margin get this out of hand to begin with?
Dumb question, eh? Whenever brokers/bankers/realtors depend on commissions, this is the result...a massive malinvestment and bubble.
The smart ones have learned and are now fleecing their own people like the americans do. The american way, via asset price inflation as you said.
The stupid ones never learn, never have, never will.
I would argue that it is perfectly natural. It's an investment bubble. Every single regular reader on Zerohedge knew it was a bubble and still is. Stocks have fallen about 30% in a couple of weeks and yet Chinese shares are still trading at 27 times earnings vs 12.2 in the US, 10.7 in Europe and 8.4 in Japan.
This bear market has a long way to go. There's nothing unusual about it. It's just a bubble, encouraged by the government and inflated by inexperienced investors. Watching it happen is funny or sad depending on your perspective. I know a girl who is presently a victim of a scam. I have pointed out all the indications that it is a scam, I have printed out countless examples of the same scam being used on other people, yet she insists on going ahead and throwing away her money. Temporary insanity perhaps.
But the government shouldn't have encouraged this. That was a mistake they will regret. Huge mistake.
"They said the blowback would be a bitch, well thats a fucking understatment"
What happen when 1 Billion Chinee people run to same side of boat?
Silver goes past 1000 USD per ounce?
RIPS
FTMFW: “Win glory for the country even if you lose the last penny.” -Fan Shaoxuan, a executive at microblogging service Sina Weibo
That's why they call it a Glory HOLE, it ain't because they are pulling valuable shit from the bottom of it.
We glorified some folks...
I think they will find Morgan Stanley and cohorts have suspicious circumstances on all stock markets. when is the next round of wrist slaps......
To bad the USSA markets are closed...this is a huge buy signal!
BTFD!
MOAR on the way!
There's always time to buy.....if a porn star can do it......so can you.
Wi tu Lo: market, low now, We, buy stock now, govt boost in afternoon session!
We los Mo: ha! great idea. We get food, have smokes, come back and have big profit!
Wi tu Lo: Exactry! Then do same tomollo!
Congrats to the BIS. They've done a great job "managing" PMs this week. Not too hot, not too cold, just right.
After all, in the face of all the bad news and uncertainty, the last thing anyone would want at the dawn of an historic crisis is any sort of risk insurance.
Y U no buy guy?
It's the Hotel Shangifornia. You can check in any time you like, but you can never leave.
Our equities love you long time.......cheap cheap!
"The Greece impasse set to culminate on Sunday continues to have a massive impact on at least one stock market" - c'mon you are not fooling anyone, and are only succeeding in being the biggest prat of all time.
Are you also about to say we have to forward this artible to 10 friends otherwise...
What goes up above the rate of inflation must come down. It's not as if they are creating economic miracles over there.
Three entire days of the US markets being closed. That's plenty of time for the digital zero creators to come up with DOW 500+ on monday.
Central banks having infinite money will inevitably come to own everything.
A seamless .... suicide is painless .... transition to state ownership .... of everything .... Obama wants to do the same !
Maybe the plan is for China's state owned enterprises to be privatized, pushing their oligarchs to new levels of wealth, while their proles are crushed to new depths of servitude.
Lather, rinse, and repeat.
Now you know what it feels like .... to be a Vietnamese sailor .... defending the Spratly islands .... and gunned downed .... waist deep in water .... by Red Chinese AA machine guns .... happy 4th of July .... you communist filth .... masquerading as a civil nation of entrepreneurs ... I shit in your won ton !
A 20% swing...lol..."Now with new plungier freshness!"
now now... these are the guys that are going to lead us to financial transparency, truly free markets, the Real Ultimate Power of gold-backed currency and the ultimate overthrow of the oh so evil western world... here, you obviously need more kool-aid, take a sip
lol...yes yes, if we would all just BELIEVE in the muracle of any governments abilities at central planning all would be fine...it'd be nothing soft furry kittens, no work-all play everyday...forever!
Whats wrong with you people?!!! ;-)
By Nick Beams3 July 2015
Chinese share prices fell again yesterday, adding to fears that the plunge of the past three weeks could impact on the financial system as a whole and the broader economy.
The Shanghai Composite Index dropped 3.5 percent. The market has declined by almost 25 percent since it reached a high on June 12, despite continuing efforts by financial authorities to boost markets lest the fall produce major spill-over effects.
In the latest counter-measure, on Wednesday the Chinese Securities Regulatory Commission (CSRC) eased collateral rules on margin loans. These loans, in which borrowed money is used to make share purchases, were the main driving force behind the 150 percent rise in the market during the past year.
According to stock exchange data, outstanding margin loans rose to as much as 2.27 trillion renminbi ($US366 billion), from 401 billion renminbi a year ago. Margin debt as a percentage of China’s share market capitalisation is now higher than on the New York stock market.
Regulatory authorities are treading a fine line. On the one hand, they are trying to curb some of the excesses in the market, while on the other they fear that if the share market bubble collapses too rapidly it will create major crises elsewhere in the financial system.
http://www.wsws.org/en/articles/2015/07/03/chin-j03.html
By Nick Beams3 July 2015
Chinese share prices fell again yesterday, adding to fears that the plunge of the past three weeks could impact on the financial system as a whole and the broader economy.
The Shanghai Composite Index dropped 3.5 percent. The market has declined by almost 25 percent since it reached a high on June 12, despite continuing efforts by financial authorities to boost markets lest the fall produce major spill-over effects.
In the latest counter-measure, on Wednesday the Chinese Securities Regulatory Commission (CSRC) eased collateral rules on margin loans. These loans, in which borrowed money is used to make share purchases, were the main driving force behind the 150 percent rise in the market during the past year.
According to stock exchange data, outstanding margin loans rose to as much as 2.27 trillion renminbi ($US366 billion), from 401 billion renminbi a year ago. Margin debt as a percentage of China’s share market capitalisation is now higher than on the New York stock market.
Regulatory authorities are treading a fine line. On the one hand, they are trying to curb some of the excesses in the market, while on the other they fear that if the share market bubble collapses too rapidly it will create major crises elsewhere in the financial system.
http://www.wsws.org/en/articles/2015/07/03/chin-j03.html
Does this mean the ChiComs will be forced to sell the Waldorf Astoria in NYC back to an AmeriKan company ??????????
That way the president of the US can finally stay there again when he visits NYC
I mean - he cant stay there now - not with all of the espionage going on in it by Chinese spies.
The 'Peoples Republic of AmeriKa' - you gotta love it.
The grand experiment - GAME OVER.................
That back room where all the housewives sit - knitting - while seated in front of their monitors watching as all their money goes down the shitter. I can hear it now. "FOK FOK FOK MOUFFOK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"
The grand experiment - GAME OVER
Not yet....we still have Ted Cruz's dad. Possibly the next George Washington.
Rafael Cruz....remember the name.
if china's gubbermint isn't planning to step up and buy all those worthless shares then imo what they are doing by egging on speculators is RUTHLESS.
"... aaaaand, it's gone"
There are reports (Bloomberg) that the China Securities & Regulatory Commission is investigating recent short selling activity and is set to ‘strictly’ punish any signs of manipulation found.
Because manipulation is only ever punished if it pushes the 'markets' to the down side...
This should be interesting. Shorts, seeking to avoid being punished, will cover at the current level which will cause a rally that draws in what's left of the speculating public in a BTD frenzy. After that, with no short covering to slow it down or set a floor, the market will go down big time.
Slogans, exhortations and thinly veiled threats are all they have left.
These guys really are amateurs.
All this sabre rattling over the spatly Islands when all Uncle Sam needed to do was go short China (I'm sure he is)
Uncle Tom oops Sam can now say 'Yuan in a democracy until you've had your 1929 moment.
Off down the pub, Guinness water boarding competition tonight
yes, this seems familiar... "tanks, blood, WW3 in Crimea!!! OMG oh noez!" followed by "oil at $110? try $50 lol"
I often wonder if the last year or so of DOW gains were fueled in some part due to short sellers squeezed. So short selling can go both ways and punishing short sellers seems like a waste of time.
But looking for flashers advertising size who really are tiny or quick flashers who cancel before you can see anything would be worth looking for. Instead of searching for needles in a haystack, simply revise the trading fee structure to price to place the order, price to change (per share), price to execute, if forced to incur a cost to flash you'd likely see less of it. If an order were executed the fee for placing could be waived, etc., many creative ways to solve the problem without causing undue fees to normal traders.
Shorting should be banned world wide, it does not do anything good for capital or business at all. Especially since it is done by worthless American money printed from nothing intended to wreak havoc. China needs to ban it. I would be glad if it is was banned here.
If the Dollar is worthless, why do Chinese peg it to the yuan?
"Shorting should be banned world wide, it does not do anything good for capital or business at all."
au contraire mon frère....
Short selling is the flip-side of margin lending. Read the fine print. If you own a margin account, your shares are available for loan to short sellers even if you never use the margin in your account.
If you ban short selling without banning margin lending the volatility will be off the scale as there'll be no one there to buy the dip when markets inevitably correct.
Short sellers are the rational counterweight to the irrational exuberance of margin lending, and good luck getting rid of margin lending as that's where brokers make their money.
I have a better idea. Ban public trading altogether. The general public has no business being in the market anyway. They are just sheep to be fleeced. Let them throw their money away in Macau or at the track if they're so inclined and leave the business of capital formation to the professionals.
China needs to kick out US banks, then peg yuan to gold. That will fix them.
why stop there, they should just stop exporting to the western world... there, that'll show 'em <g>
The authorities are idiots right around the world. When stocks crash all that value (measure of hard work) is simply gone, it is eviserated. The only way to preserve that value is to allow short selling. That way the value flows into someones pocket and does not vanishes completely into the ether. To ban short selling is an idiots guide to the stock market. Clearly they are incompetent!
You honestly believe that stock cost has anything to do with value or even more laughably "measure of hard work"? What a fucking neomaxizoomdweeby. You want value from hard work. Try actually working to produce that value. Paper shuffling is for bitch ass pussies and is a sad way to earn a living.
At least the Chinese pop their bubble, the US and Europe just pump them more.
China News Flash
200 million dead Chinese housewives litter streets.
Husbands unavailable for comment.
Does this mean the ChiComs are'nt going to bail out Greece like they said in their 'People's Gazette'????
Us equities aren't trading 12 to 1 PE. That was in 2009. Now it's more like 30. Where have you been the last six years in a cave.
Trolls learn from their masters to make up fake numbers to prove their fake point.