How A Chinese Farmer Lost More Than Everything Trading Stocks

Tyler Durden's picture

Last night, just six weeks after one Chinese farmer Liu Jianguo invested his life savings in the Chinese market, proclaiming "it's a lot easier making money from stocks than farm work," we wondered if it was time for a sequel:

A few hours later we find out that it was because as CNBC reported in its sequel, another farmer has lost it all... and more. As CNBC's Eunice Yoon reports, just a few weeks after his glorious gamble in China's manipulated market, the farmer "trader "now owes - thanks to wonders of margin calls and leverage - as much as he originally invested.

From the hope-filled exuberance of early June to Yang Cheng's utter hopelessness, "I have lost everything," after he followed the government's 'grand plan' to open the economy and encourage stock market speculation.

Having piled his life savings (plus his relatives' money) into the market, thanks to encouragement from his broker he borrowed $1 million in margin and bet it all on one stock - a local mining company.

Now, after being forced to liquidate by the same risk-encouraging brokerage, he has suffered catastrophic losses... and he is not alone...

"I don't know what to do... I trusted the government too much..." he exclaims, adding "I won't touch stocks again, I have ruined everyone in my family."

We can only hope Yang Cheng's breakdown at the end will serve as a lesson to those betting on "The Fed has your back," or whatever meme the moment requires.

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BoPeople's picture
BoPeople (not verified) Jul 28, 2015 8:52 AM

Dear Chinese Farmer

You were defrauded by the bankers who run the stock market. The Chinese government was either complicit or fooled by the bankers as well.

tmosley's picture

Grab your torch and pitchfork and join your fellow farmers in a march on the BoC.  Tear down the vault door and take the gold out.

After all, those fucks aren't doing nything with it.

Latina Lover's picture

Welcome to Casino Capitalism, Chinese Style.    Whether they speak English, German, Russian or Mandarin, the Banksters ALWAYS win.

Ignatius's picture

Propaganda.  He bought into it.

So if I can sucker you, you 'deserve' it?

mickeyman's picture

Can't he bet his debt now? If he loses, it should decrease!

Ignatius's picture

Right, think like a bankster.

Waylon Bits's picture
Waylon Bits (not verified) Ignatius Jul 28, 2015 9:11 AM

It's far easier trusting in Bitcoin than doing farmwork.

 

https://localbitcoins.com

realmoney2015's picture

Trust. Government. Two words that don't belong in the same sentence.

EmmittFitzhume's picture

New #1 Chinese karaoke song this year is  Da Gamberer

MillionDollarBonus_'s picture

When I read this, all I want to do is hang these short selling murderers. They're ruining peoples' lives! This didn't even need to happen - everything was going well in the Chinese markets until it was raided by a cabal of hedge funds and a shameful handful of retail investors trying to profit from other peoples' misery. Equities should be a stable long term investment - stock market crashes like this are completely unnatural and preventable. It's just sad that we couldn't sort out this short-selling issue earlier - it would have saved the livelihoods of millions of people.

PrayingMantis's picture

 

 

"You've got to know when to hold 'em
Know when to fold 'em
Know when to walk away
Know when to run
You never count your money
When you're sittin' at the table
There'll be time enough for countin'
When the dealin's done"

~ K.Rogers

Handful of Dust's picture

His statement is very typical of the traditional Communist thinking; I remember asking people there, "Do you think house prices will go up or down?" and they would answer, "Whatever the gubmint wants them to do."

 

Most understand there is no such thing as a "free market." This guy just happened to get burnt by buying and selling at the wrong time or using too much margin. The usa is now the same way, very corporate/banker socialistic; no such thing as a "free market" anymore. It's up to the banksters to decide.

Stackers's picture

I made and lost $85 million in 5 years day trading stock markets :)

eatthebanksters's picture

This story reminds me of 10 million Americans who trusted Barney Frank when he said everything was fine....fuck me.

Son of Loki's picture

Anyone who has not the discipline to save 20% for a downpayment on a house shouldn't be buying one. Home ownership is a huge responsibility...yes, "responsibility"...one of those words we've seem to have lost here in merika. Same as "accountability"... lost ....

 

One big problem is when a banker losese everything, he gets bailed out by the Middle Class taxpayers by force ...but if a Middle Class person loses, he gets screwed and eats his loses.

DeProgrammed's picture

Seems the 20% down I put on my home in 2008 did me abso-fucking-lutely no good. I played the game like a good little sheep and promtly paid the price in 2009. At the time I had no knowledge or interest in "the markets", i just wanted a simple house that I could afford. What a wakeup call when my $250k house was suddenly worth $90k cash. I made no payments for 1.5 years, short sold the hell out of it and BK'd on the rest of my debt. Fuck the banksters, fuck phony repayment morals to banks, and fuck the entire system. Debt free ever since and never looked back.

AnonymousCitizen's picture

To me, this sounds like greed on the part of the farmer. Who suggested that he invest (gamble) everything and then some on a SINGLE MINING STOCK? He must have been convinced by someone of "insider information" about this "can't miss opportunity."

Obviously he knew the game was rigged, but thought he could "beat the house". He was mistaken. It is rigged, but you can't beat the house.

AGuy's picture

Homes can also be a liablility: Property taxes, expensive fixes (broken furnance, septic, etc). Job securty vanished more than decade ago. Most people will need to either relocate every few years for employment, or be prepared for very long commutes.

 

 

AGuy's picture

I would recommending NOT using the phrase "f*ck me" and Barney Frank in the same sentance. He might just show up at your door!

 

Bokkenrijder's picture

Typical Chinese: get rich quick by excessive and compulsive gambling.

How about that gold standard and all that Chinese gold buying? Think that will blow up in their faces as well? Looks like the Chinese bought everything too late: from US government bonds (>$3 trillion worth), to real estate ("poof and it's gone") and now down to stocks.

The only thing the Chinese can do is copy others, copy Louis Vuitton bags, copy DVD's, copy iPhones, copy fiat currency, copy real estate bubbles, copy stock market bubbles and copy government bailouts and central planning.

FORGET about the Chinese riding to your rescue and send gold prices higher! Just FORGET it!

p.s. pretty rich 'farmer' when he has $160K in savings in a country where the average wage is only a few thousand Dollars...per year!

CPL's picture

Guess how maoism happened last time?  Just like this.  This time though, the adoption will be everywhere with all the central bank that's helping screw people.  Now you've got two options.  No wealth or BitCoin which eventually leads to no wealth with technology helping do the heavy lifting since you lazy fucks are 2000 years behind where you should be. 

There is no running from this because this will happen.  Only choices on the table are fast and painful, or a nice weaning and cessation with BitCoin.

Shaznardickleze the Doon's picture

The value/problem of bitcoin is that it is capable of being the greatest ponzi the human race has ever known. The suckers are too freshly blow torched or power washed to smoke your pipe brother man.

Antifaschistische's picture

it's often a life lesson.  Take something you're an expert at (farming), that youi've spent your life attempting to perfect....and then risk that on something you have zero experience in, or expertise on.  My advice, never ever ever do this.  YOU and your family are ALWAYS you're best investment.  Never use them as collateral....if you want to gamble, go for it....just do it with what you're prepared to lose.

HungryPorkChop's picture

Welcome to Robo-sign, Corzined, Silver Fix and Libor market where you can checkout anytime you want but you can never leave.

 

 

Bokkenrijder's picture

Trust. Government. Two words that don't belong in the same sentence.

True, but people here on ZH (supposedly well educated and outside the box thinkers) seem to place a lot of trust in the Chinese government smartness of buying gold and they are big fanboys of Donnie Trump.

exi1ed0ne's picture

I like Trump because he is the most entertaining clown in the circus.  This shit show is going to burn, it's unavoidable no matter what moron is selected.  Might as well enjoy watching the play unfold while trying to do what you can to lessen the blow for those close to you.  Hell, there are good arguments to hope for the worst of the worst and bring us to the final act sooner.

If I bothered to vote, this would be my choice:

https://www.facebook.com/pages/Dwayne-Elizondo-Mountain-Dew-Herbert-Cama...

AGuy's picture

"I like Trump because he is the most entertaining clown in the circus."

Trump need to win to enable him to enact laws to bail out his failing businessaes and investments.

Mister Ponzi's picture

Don't trust your government.

Put them in one sentence. Well, that was easy!

Nobody For President's picture

Trust. Government. Two words that don't belong in the same sentence.

 

Sure they do, Realmoney:

I don't Trust the Government.

AGuy's picture

"Trust. Government. Two words that don't belong in the same sentence."

Not true, here is an example: " I fully trust the goverment to do the worst possible thing when addressing a problem". :)

 

roodeetoodee's picture

They do if you add in "the", "to", "fuck" "it", "up" in an assorted order.

Slave2Fashion's picture

A man should never gamble more than he can stand to lose.

collon88's picture

...but...but, I was investing, not gambling.  

ali-ali-al-qomfri's picture

because of you they added a bunch of chairs and sofas.

Tallest Skil's picture

Uh, yeah. If you're too stupid to learn about something before doing it, it's your fault that it was done. That doesn't make what was done TO you right, or even acceptable, but it's still YOUR fault.

KnuckleDragger-X's picture

I remember back when day trading became popular and in the end lot of people lost everything they had. It's all just a variation of "the big lie" Get rich quick=get poor quicker......

Totentänzerlied's picture

The slogans of the modern era ought to be "caveat debitor" and "sic transit promeritum mundi".

"So if I can sucker you, you 'deserve' it?"

As a matter of fact, yes. One of the most sound and important tenets of authentic libertarianism is that coercive attempts to help or protect "the people" in general will always fail, backfire, come back to haunt you, or worse, even if it takes a century or three. As someone or other said, we have arrived at the age of consequences ... consequences for approximately 300 years of just such moronic and ill-conceived attempts to micromanage the world into a utopia ... and make a handful of us very briefly, but inconceivably, rich at the expense of all other humans, unborn included, and, well, the entire planet. The inevitable crash is just desserts.

Or would you have us believe that it takes a truly towering and remarkable genius to appreciate that exponential growth, actually exponentially increasing waste which produces zero enduring value or prosperity or peace or _____, is unequivocally not sustainable? Those are the choices. It was not lack of intelligence, but excess of greed.

pods's picture

So I guess Blue Horseshoe didn't love Anacott Steel?

Are they at least going to EAT Blue Horseshoe?  
Beat him with some Anacott Steel?

pods 

loregnum's picture

haha how is that natural selection? For all we know the people have reproduced a dozen times and their apparent "flawed genes" will carry on and on for decades.

Darwinists/natural selectionists are so fucking stupid. I especially like when they say "natural selection" when some redneck hillbilly with 5 trillion offspring does something dumb. Yep, natural seleciton showed them! That the human species is getting dumber and mroe useless each passing generation should clearly show the whole "natural selection" idiocy is just that- idiocy, but apparently it's lost on some people.

Dubaibanker's picture

I wonder what had happened to one individual investor in the 1929 Dow crash when US started its journey of development?

Does anyone know how many Americans lost money at that time?

No one wishes to blame their own intellect or decisions when they lose but they feel very happy when the stocks rise!

People need to learn....nothing goes up in straight line ever.....

I blame the individual (for making a decision), the Govt (for not having the margin controls or KYC in control) and the broker (for facilitating) . But blaming the broker will not do, because he is doing what a policy maker has allowed him to do and the investor who is pushing him and signing everything without understanding a bit!

Although it is sad to see people losing money on margin but people need to accept responsibility for the same. A large dose of understanding how markets work and knowledge/education is also required!

Blame needs to be shared not placed on the Govt or the broker!

You can give 100% margin, but if there is no investor, it simply wont work!

I am pretty sure people will learn fast!

On top, the advisors, bankers etc never knew anything about investments. Markets always went up since WW2 until 2008 because the global GDP of all large countries ALWAYS went up. Now that the global GDP is always going down and banks and various companies are shutting everywhere, there is no one who can forecast anything accurately, least of all bankers and investment advisors.

They are all clueless and took credit for rising global markets since the 1960's. Now that the global markets are down, not only bankers are being fired by the millions but they are unable to attract any business because they simply cannot persuade anyone on where the markets are headed next, worldwide, or how to make profitable investments! (because they do not and did not know anything in the first place and simply piggy backed on a rising economy). No wonder dozens of banks are collapsing or shutting because there is simply no business globally, except in China!

Everyone needs to invest in a VERY diverse manner into as many countries/stocks/bonds as possible and then do it in 2-3 tranches and keep a VERY close eye on a regular basis.

Even though China is great but you cannot invest more than 10% there. Same in US or Europe or Asia or bonds or whatever else...10% in each will keep the cart steady and not lose ALL your money in one shot. If you bet on one company, the loss will be all yours!

Pity the farmer though! 

Mr.Sono's picture

WTF, they still have farms after all that?

collon88's picture

And while you're at it, hang the broker who took advantage of his naivete. 

AGuy's picture

"And while you're at it, hang the broker who took advantage of his naivete. "

its likely his broker was previous a farmer, that also bought the same stock and have a boatload of margin debt. Most brokers are that smart to con a man out of his savings and also not get conned by the bigger fish.