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China Bans Use Of Terms “Equity Disaster” And “Rescue The Market"

Submitted by Tyler Durden on 07/07/2015 14:20 -0400

Although it’s not possible to know exactly what the mood is among Party officials in China regarding the inexorable slide in stock prices that’s unfolded over the course of the last three weeks, it’s reasonable to assume that at least some officials in Beijing are in the throes of Politburo panic after watching some $3 trillion in market value disappear into thin (and probably polluted) air.

Amid the turmoil, China has resorted to an eye-watering array of policy maneuvers, pronouncements, and plunge protection schemes aimed at arresting the slide.

Nothing has worked.

Not suspending compulsory liquidation for unmet margin calls, not billions in committed market support from brokerages, not a PBoC backstop for the CFSC, and not even a ban on selling by the Social Security Council.

For reference, here (courtesy of Bloomberg) is an annotated chart of the wild ride Chinese stocks have had in 2015:

And so, with every attempt to manipulate the market higher falling flat in the face of selling pressure from the hairdresser/ farmer/ banana vendor day trading crowd (which has now thrown in the towel on the whole “it’s easier than farm work” theory and now just wants to break even and head for the hills) the only thing left for China to do is “fix” the narrative.

In other words, when banning selling doesn’t work, the logical next step is to ban talking about selling. Here’s FT with more:

Shares have shed some 30 per cent of their value since mid-June, punishing small investors, some of whom have borrowed heavily to jump on board what had been a spectacular bull run.

“There is a panic but no matter how they [the authorities] jump in, this thing just doesn’t stop falling,” said Dong Tao, regional economist at Credit Suisse in Hong Kong.

Analysts said the more Beijing does the more it risks creating a perception of desperation, particularly if its efforts have no discernible effect.

“All this activity has supported a view that policy makers are in a state of panic,” wrote Mark Williams at Capital Economics.

“The financial system is about trust and transparency, but we’re not getting either from the government,” said Dee Sum, a 35-year-old banker in Hong Kong, whose family has sustained heavy losses on the stock market in recent weeks.

One domestic journalist, who did not want to be named, said the government had banned local media from using the terms “equity disaster” and “rescue the market” in their reports on the stock market.

So apparently, Beijing will now prevent journalists from accidentally jawboning the market lower so that Party mouthpiece media outlets are free to jawbone the market higher.

Needless to say, we doubt if this hail mary attempt to rescue the market will do anything at all to save China from its homemade equity disaster.

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Tue, 07/07/2015 - 19:34 | 6282676 Crocodile

To give the illusion they have a gram of morality left. Can't let the foul language be aired while parents are caught trying to explain erectile dysfunction or suicide.

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Do you known of the 23 million slaves taken from Africa that less than 25% went to America and more than 50% went to Europe...why is the skin color such an issue in America and seems resolved in Europe. Why are such facts not taught in school. Does what you see in real life "gel" with what we are "told" or hear? You see blacks and whites in every facet of life working together, which is the reality and why a non-American part African President could be elected; while the racists & PC's make money of the "race baiting card"...let's ban the Confederate flag, which had very little to do with slavery...closer to nothing.

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The "separation of church and state" (not in any founding docs - letter between Jefferson from a concerned Anabaptist preacher) had everything to do with formal denominational ruling class and nothing to do with belief in God, which is why most of our public institutions are full of biblical references...visit D.C.. The founders all assumed (few exceptions..less than a handful) and did themselves believe in a Creator. most in the Trinity; none denied the obvious. The fear was that one denomination)i.e Catholicism) would control the government, for the founders saw the issues with Britain. When the King was Catholic, the Protestants suffered and the Catholics were favored in all walks of life and the same was true when reversed...the founders were concerned about that aspect...not the funding or giving equal tax breaks to organizations based on religious affiliation.

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Now we have the informal religion, called secularism, that has taken over the entire government, the very thing the founders tried to build barriers to avoid....their mistake was to assume people would deny the obvious, that as creatures they have a Creator who directs the affairs of men. You or your children will never be taught that and the proof of the divine intervention fro our good is reflected in out history and look how we have digressed over since the 1940-50's as we have mocked Christ; now He has the last word and that is good for a few and the worst possible scenario for most.

Tue, 07/07/2015 - 14:20 | 6281253 Glass Seagull