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If Everything Is Fine, Why Are 20% Of All Chinese Shares Still Halted?
On Monday, Beijing gave the unofficial all clear for Chinese stocks, when the following headline crossed the wires just prior to the open in Shanghai:
- CHINA'S ZHU SAYS STK MKT ROUT CEASED BY TIMELY MEASURES: DAILY
Yes, "timely measures" or, as the emergency plunge protection deployed by the PBoC is called outside of China: "unprecedented government intervention," or perhaps more appropriately "outright manipulation."
But however one wants to characterize the bevy of pronouncements, central bank backstops, and short seller witch hunts, one thing seems clear to us and to quite a few other observers: Beijing's extraordinary efforts to perpetuate the equity rally underscore the degree to which the stock market mania serves as a critical distraction for a nation that might otherwise be focused on decelerating economic growth and a collapsing property bubble.
Meanwhile, China is now in damage control mode when it comes to explaining why the 30% decline in mainland shares isn't likely to spillover into the real economy or put too much of a strain on household balance sheets. Consider the following excerpts from Xinhua:
The ramifications of China's stock market volatility on household balance sheets are manageable given the size of families' massive deposits and property valuations, a leading investment firm said Monday.
After the recent market slide, "the overall household balance sheet has only incurred limited damage," China International Capital Corporation (CICC) said in its latest research report.
The wealth destruction is "well-cushioned" by 53 trillion yuan of household deposits and another 40 trillion of non-equity and non-property assets, said the CICC.
"Furthermore, the equity holding of Chinese households is only a small fraction of their real estate assets, and the balance sheet impact of a 30-percent loss in equity investment is equivalent to damage caused by a meager 3-percent swing in property prices," even using the conservative estimate of total household real estate assets by China Southwestern University of Finance and Economics, it added.
So our question is this: if the danger has passed and if households are so "well-cushioned" that the sell-off was entirely "manageable", then why is it that more than 20% of mainland shares are still halted?
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Everything was awesome when they had 40%+ halted so its even better now with just 20% of shares halted. Better buy the market now before they open up the rest of the shares cause these deals wont last!
They aren't halted. They're just resting
This is a cup is half-empty type question. Clearly the Chinese government only authorizes you to see the glass as half-full, or 4/5ths, as it may be.
These are the guys that want to provide the world with a new reserve currency?
Just wait till Dalai Lama is at the helm in downtown Beijing.
So, I tell them I'm a pro jock, and who do you think they give me? The Dalai Lama, himself. Twelfth son of the Lama. The flowing robes, the grace, bald... striking. So, I'm on the first tee with him. I give him the driver. He hauls off and whacks one - big hitter, the Lama - long, into a ten-thousand foot crevasse, right at the base of this glacier. Do you know what the Lama says? Gunga galunga... gunga, gunga-lagunga. So we finish the eighteenth and he's gonna stiff me. And I say, "Hey, Lama, hey, how about a little something, you know, for the effort, you know." And he says, "Oh, uh, there won't be any money, but when you die, on your deathbed, you will receive total consciousness." So I got that goin' for me, which is nice.
Deflation is a bitch, now about those gas prices ( fuck'en scam )
if the danger has passed and if households are so "well-cushioned" that the sell-off was entirely "manageable", then why is it that more than 20% of mainland shares are still halted?
Ans: Quarantine.
Just change market rules to avoid US market rules... ban shorting, and US and Israeli investors.
That should fix it.
Also put limits on amt of gold that can be sold based on time/size intervals, no limits on buying.
We need to protect people's investments here.
Getting on the internet in China is a Bitch. Even when you finally get on, over half the global sites are blocked. They have bigger problems then their stawk market.
They aren't getting paid enough for the gold they are selling to buy stocks.
They are holding the pension funds hostage from all western investors. Cheques are going to start bouncing like rubber balls soon all over the place in the western world.
Ah so... Sum ting wong.
How do they handle the derivatives related to the stocks that are on holiday? Black-Scholes kinda goes out the window. . . Guess Black Swan takes center stage ;)
The hotel california of stock marktets. "You can check out any time you want, but you can never leave".
I reserve judgement.
First I'd like to know the number of shares short in each of the 600 corporations that have not yet resumed trading.
And if Beijing will pass retroactive laws penalizing short selling intended to drive down the price of shares and indexes.
I pass.