This page has been archived and commenting is disabled.

China Carnage Continues; Investors "Lost & Concerned" Despite PBOC Reassurance

Tyler Durden's picture




 

“China’s market is so distorted, you can’t sell short very confidently and you can’t buy up very confidently either," warns one Hong Kong-based asset manager as despite massive "measures" and manipulation, Chinese stocks extend yesterday's stunning losses (CSI-300 -5% at the open, Shanghai -4.1%). As Bloomberg reports, investors “are concerned and lost," although government officials tried to claim the situation by explaining they will "continue efforts to stabilize market and investor sentiment, and prevent systemic risk." As stocks continued to fall, the market is summed up by the opposing views of one broker noting "China won't tolerate a worsening stock market, so those state-backed financial institutions may start buying," and another who warned "it's hard to start a new up move after a bubble bursts... I don't think they are able to prevent it falling."

The PBOC is desperate to reasure on the fundamentals backing the bubble:

  • *PBOC SAYS POSITIVE CHANGES SHOWN IN ECONOMY
  • *CHINA PBOC REITERATES TO PURSUE PRUDENT MONETARY POLICY IN 2H
  • *PBOC TO KEEP SUPPORTING REAL ECONOMY DEVELOPMENT
  • *PBOC TO CUT FINANCING COSTS

But even after that, the market keeps crashing...

  • *CHINA'S CSI 300 STOCK-INDEX FUTURES FALL 4% TO 3,611..
  • *CHINA SHANGHAI COMPOSITE SET TO OPEN DOWN 4.1% TO 3,573.14 and more...

 

 

Bloomberg quotes another analyst who perfectly sums up the world...

“The markets in China now are not really markets,” Donald Straszheim, head of China research at New York-based Evercore ISI, said on Bloomberg Television last week.

 

“They are government operations.”

But as one manager concluded, if state-run funds withdrew support to test whether shares could stabilize at current levels on their own, the resulting retreat may prompt the government to step back in immediately to prop up prices, said Hann, who oversees about $350 million. On the other hand, if policy makers are starting to unwind support measures to let the market play a bigger role, shares may have further to fall, he said.

And here is CNBC from June 10th proclaiming how awesome the Chinese Stocvk Bubble was...

Farmers are eschewing crops to plough their cash into the booming stock market, a journey by CNBC into the heart of rural China discovered

 

 

Six months ago, apple farmer Liu Jianguo invested $8,000 into the Shanghai Composite, a big chunk of his life savings.

 

"It's a lot easier to make money from stocks than farm work," he told CNBC's Eunice Yoon.

 

...

 

The investment craze in Chinese rural areas comes as more retail investors play a bigger role in the market, encouraged by the Shanghai Composite rally which has risen 110 percent since last November.

 

Moreover, the country's high degree of financial literacy is a key factor; China ranked first in the investment component of the MasterCard Financial Literary Index Report this April.

 

"China is just beginning to catch up. In the United States 50 percent of families are investing in stock markets [whereas] in China, it's less than 9 percent," said Uwe Parpart, MD and head of research at Reorient Financial Markets.

Maybe farmwork is better after all?

As we noted earlier, clearly, this is has the potential to exacerabte capital outflows given the pressure it could put on the yuan. Nevertheless, "stabilizing" the market is likely to take precedence in the short-term which is why you should expect the plunge protection headlines to come fast and furious. And sure enough, just moments ago:

  • CHINA TO CONTINUE STABILIZING MARKET, SENTIMENT, PREVENT RISKS
  • CHINA SEC. FIN. CORP. HASN’T EXITED STOCK MARKET: CHINA’S CSRC
And for comic relief, we'll leave you with the following comment from Finance vice-minister Zhu Guangyao, also from July 18: 

"[The turmoil] has come to an end."

Umm no, not so much!

*  *  *

There is only one thing left...

 

Charts: Bloomberg

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 07/27/2015 - 21:23 | 6361238 kliguy38
kliguy38's picture

Just don't buy gold.........its a barbarous relic. BTW that is what really has the ponzi scared. Its the only currency threat they have.

Mon, 07/27/2015 - 21:29 | 6361274 Wild Theories
Wild Theories's picture

actually, probably shouldn't be buying gold or commodities until this China thing has worked itself out

so far they have done everything wrong, this looks far from over

Mon, 07/27/2015 - 21:43 | 6361344 NoDebt
NoDebt's picture

Ladies and gents, it's time to get the fuck outta the "market" until further notice.  FYI:  "further notice" is the announcement of full-on QE4 which damned well better be at least twice the size of QE3.

I have little faith in Yellen or the limping Obama administration to come to the rescue with helicopter drops of money like the last year of the GWB crew.  They just don't have the chops.  

The markets have been betting way too heavy on China driving everything and pulling the world up with it.  When that illusion is shattered (roughly now), there's nowhere else left to turn that's big enough to matter.

When there's blood dripping down the walls, flies buzzing around and the house is screaming "get out!" at you, it's time to just leave the Amityville Horror and put it up for sale to the next starry-eyed 'investor'.

 

 

Mon, 07/27/2015 - 21:45 | 6361355 gatorengineer
gatorengineer's picture

NoDebt no doubt long term you are right, just remember where that hot money is going to go.  To the US market.  I hope I am wrong but we may have a while of this before the pop.

Mon, 07/27/2015 - 21:59 | 6361408 NoDebt
NoDebt's picture

Maybe, but you have little upside while you wait unless you're a super-wicked-smart day trader.  If you're joe-blow index investor, forget it.

Tue, 07/28/2015 - 00:14 | 6361745 FedFunnyMoney
FedFunnyMoney's picture

Yup, I can see QE4 happening now, NoDebt. The currency war is just starting to get good.

Mon, 07/27/2015 - 21:34 | 6361298 Bindar Dundat
Bindar Dundat's picture

The trouble with Chinese Sheeple is an hour after they have been fleeced they want to be screwed again....

Mon, 07/27/2015 - 21:47 | 6361362 NoPension
NoPension's picture

" it's a lot easier to make money in the stock market, than doing farm work"

Well, yes. Yes it is.

Priceless

Mon, 07/27/2015 - 21:41 | 6361337 prudent1nvestor
prudent1nvestor's picture

GAWDDAMN MARICIOUS SHORT SHELLERS

Mon, 07/27/2015 - 22:10 | 6361426 jerry_theking_lawler
jerry_theking_lawler's picture

Fuck all these mother fucking, fucking, fucks.  China, the USSA, etc is all about government intervention now.  In true capitalism, it is about RISK. If these cunts would get out of the way so RISK could be properly assigned and capital flow to the correct areas, we could get out of this mess (after some short term pain).

But no, these fucks want to rule the world and maintain their power. Time for the whole thing to go KaBoom and darn time for it to. Please, speed this up asswipes with more of your interventions.

Mon, 07/27/2015 - 23:13 | 6361623 FreedomGuy
FreedomGuy's picture

They arrogantly believe in their own infallibility and their ability to run an infinitely complex system.

Mon, 07/27/2015 - 22:11 | 6361448 indygo55
indygo55's picture

Just don't buy gold but,,,,, if you don't hurry up and buy gold at what ever the price at this time IMHO you may not get delivery EVER!. Its about having it, not just ordering andwaiting for it. Those open orders are not being filled for weeks now. What does that tell you? 

Mon, 07/27/2015 - 23:31 | 6361662 johnconnor
johnconnor's picture

It is going to be fun when all these US real state, bought by Chinese, is dumped into the market to cover leveraged positions... on the bright side, you may be able to buy a 2 bedroom house in San Francisco for 'only' half a million in a couple years.

Mon, 07/27/2015 - 21:31 | 6361252 buzzsaw99
buzzsaw99's picture

there is no market there is only the pboc

Where's Beeks? Where in hell is Beeks?

Mon, 07/27/2015 - 21:27 | 6361265 i_call_you_my_base
i_call_you_my_base's picture

"China is just beginning to catch up. In the United States 50 percent of families are investing in stock markets [whereas] in China, it's less than 9 percent,"

If true, the total number is roughly the same.

Mon, 07/27/2015 - 21:37 | 6361310 i_call_you_my_base
i_call_you_my_base's picture

I just got downvoted for math.

Mon, 07/27/2015 - 21:41 | 6361338 Gambit
Gambit's picture

There are melodious down voters out there! Beware!!!

Mon, 07/27/2015 - 21:49 | 6361377 AlaricBalth
AlaricBalth's picture

Absolutely. There is nothing like a mellifluous, sweet sounding down vote!!

Mon, 07/27/2015 - 22:02 | 6361416 ThroxxOfVron
ThroxxOfVron's picture

A downvote for Base, a downvote for 'Base, a downvote for 'Balth, etc...

SEE !

Now we're all red like China.

Somebody got a downvote for me, too?  

C'mon you Fightclubbas!  -PLEEEEEESE...

Mon, 07/27/2015 - 22:12 | 6361451 Mae Kadoodie
Mae Kadoodie's picture

Down voting is now illegal. If you know someone who has down voted please report them to the authorities.

Mon, 07/27/2015 - 22:22 | 6361487 Five8Charlie
Five8Charlie's picture

I logged in to down vote you, but I gotta go, someone is knocking at the door...

Mon, 07/27/2015 - 21:44 | 6361333 Ness.
Ness.'s picture

In the US the people 'invested' have used funds from bankrupt pensions as their $.  Think about that.  Young people think it's all a ponzi and are not investing.  93 million people are not working and obviously don't have means to invest.  Those who have jobs are battling just to stay afloat.  There is no investor - hence the CB interventions.  

I think Tiger just ran through the Brady Bunch household and the house of cards is about to fall.

Fuck the TeeVee, they should have used the stamps to buy Gold ;)

 

Mon, 07/27/2015 - 21:46 | 6361360 i_call_you_my_base
i_call_you_my_base's picture

Mom always said, don't play ball in the house.

Mon, 07/27/2015 - 21:30 | 6361267 Son of Captain Nemo
Son of Captain Nemo's picture

“The markets in China now are not really markets,” Donald Straszheim, head of China research at New York-based Evercore ISI, said on Bloomberg Television last week. “They are government operations.”...  "China won't tolerate a worsening stock market"...

And neither will the good ol' U.S. of A.'s Federal Reserve and EU/ECB either!

"Pot Calling Kettle" something other then "Blanc"!!!

Mon, 07/27/2015 - 21:32 | 6361284 Vullsain
Vullsain's picture

How can the worlds central bankers and governments allow a free market to go down!!!!!

Mon, 07/27/2015 - 21:50 | 6361380 NoPension
NoPension's picture

Oh the humanity!!

Mon, 07/27/2015 - 22:21 | 6361473 tc06rtw
tc06rtw's picture

 
 … humanity  hasn’t held up any
   better than  Der Hindenburg.

Mon, 07/27/2015 - 21:30 | 6361279 nmewn
nmewn's picture

Its like any other government ponzi...YOU'RE ONLY ALLOWED TO GO LONG ON IT!!!

Its the law! Kill all the short sellers!...ROTFLMAOFFFFFFF!!!

Mon, 07/27/2015 - 22:56 | 6361577 ozziindaus
ozziindaus's picture

Short sellers bring rationality into the market BUT they also pump it when short covering. Who was complaining then??

Mon, 07/27/2015 - 21:31 | 6361283 starman
starman's picture

Shiiit who are we gonna sell the million bucks crap shacks!?

Iranians?

Mon, 07/27/2015 - 21:35 | 6361300 buzzsaw99
buzzsaw99's picture

you just think you're kidding. i remember the flood of iranians coming here back in the seventies.

Mon, 07/27/2015 - 22:19 | 6361476 Sorry_about_Dresden
Sorry_about_Dresden's picture

We got, like, zero Iranian resaurants?

At least the Vietnamese brought good cuisine!

Iranians to good to cook for me us?

Mon, 07/27/2015 - 22:30 | 6361509 Seek_Truth
Seek_Truth's picture

There's 3 Iranian restaurants within 40 minutes of where I live- great food.

I live in pastoral, rural Pennsylvania.

You must be somewhere in remote Utah, or somewhere else in the remote West.

Mon, 07/27/2015 - 21:40 | 6361313 williambanzai7
williambanzai7's picture

Positive changes in economy?

Pretty lame...and Mr Chan knows it...

Prime HK retail rents in the high end Mainlander shopping districts are droppinglike stones. What does this tell you?

Hint, it has zero to do with Occupy Central.

Mon, 07/27/2015 - 21:38 | 6361316 22winmag
22winmag's picture

Yoo Flung Dung!

Mon, 07/27/2015 - 21:38 | 6361321 roisaber
roisaber's picture

I think this is leading to a fundamental breakdown in the Chinese supply chain, and it's not as if literal, actual Communism has the power to put the broken pieces back together again. 1 month, 2 months, 3 months, one way or another the consequences of that will pound the American economy fore to stern. I think this might really be it this time...

Mon, 07/27/2015 - 21:38 | 6361322 Stormtrooper
Stormtrooper's picture

Maybe the US could lease the Chinese some FEMA camps to hold their illegal short sellers!

Mon, 07/27/2015 - 21:45 | 6361356 serotonindumptruck
serotonindumptruck's picture

Who needs FEMA camps when you can just bill the condemned prisoner's family for the cost of the bullet?

Mon, 07/27/2015 - 21:39 | 6361323 Wilcox1
Wilcox1's picture

farmwork is better

 

Mon, 07/27/2015 - 22:14 | 6361462 Ness.
Ness.'s picture

Farmwork is honest and rewarding.  Honest and rewarding are better.

Mon, 07/27/2015 - 23:32 | 6361664 mwrobe1
mwrobe1's picture

But QE infinity and BTFD is soooo much easier than farmwork.

Mon, 07/27/2015 - 21:42 | 6361341 Seasmoke
Seasmoke's picture

There looks like there is no way this doesn't cross the Pacific this time. ASIAN PANIC 2. 

Mon, 07/27/2015 - 21:42 | 6361343 Fukushima Fricassee
Fukushima Fricassee's picture

Shame they don't have any good corn wiskey in China

Mon, 07/27/2015 - 22:13 | 6361455 Sorry_about_Dresden
Sorry_about_Dresden's picture

Duty Free bitchz!

You don't like biaju?

Mon, 07/27/2015 - 21:43 | 6361348 williambanzai7
williambanzai7's picture

50 percent of families are investing in stock markets [whereas] in China, it's less than 9 percent," said Uwe Parpart, MD and head of research at Reorient Financial Markets.

What kind of shit is this dude blowing?

Mon, 07/27/2015 - 21:44 | 6361352 Baby Eating Dingo22
Baby Eating Dingo22's picture

Mass executions are certainly in order

Mon, 07/27/2015 - 21:55 | 6361395 NoPension
NoPension's picture

China ranked first in the MasterCard financial literacy component.

Yup, they're going to get fucked, but good. MasterCard ranking you first cant be good for anyone but MasterCard.

And oh, "Priceless! "

Mon, 07/27/2015 - 22:17 | 6361465 Make_Mine_A_Double
Make_Mine_A_Double's picture

Hand over the Algos for People's justice!

Mon, 07/27/2015 - 22:52 | 6361559 Platinum
Platinum's picture

Despite trying to prop up the markets, they still fall. Echos of 1929...

Mon, 07/27/2015 - 22:53 | 6361564 ozziindaus
ozziindaus's picture

It's your civil duty to short China and reshore your lost jobs :P

Mon, 07/27/2015 - 23:03 | 6361598 FedFunnyMoney
FedFunnyMoney's picture

Time for the PBOC to set the printing presses to hyperdrive.

Mon, 07/27/2015 - 23:29 | 6361657 mwrobe1
mwrobe1's picture

Thats a great idea!...down-voter internment camps bitchez!

Mon, 07/27/2015 - 23:29 | 6361658 Spungo
Spungo's picture

Shock and awe, bitches!

Do NOT follow this link or you will be banned from the site!