This page has been archived and commenting is disabled.
How A Chinese Farmer Lost More Than Everything Trading Stocks
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:
It's time for the sequel: how the Chinese farmer bet on stocks and lost everything http://t.co/l1EEAHFiEg
— zerohedge (@zerohedge) July 28, 2015
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.
»
- 77794 reads
- Printer-friendly version
- Send to friend
- advertisements -
Some people just do not know when it is time to leave the casino. For every winner there are loosers.
I keep thinking of P T Barnum for some reason...
There was your first mistake..... you trusted the government. It amazes me when I here anybody who says they trust the government.
he should have incorporated as a bank
s/
greed. the dude wanted to be a big hero, and show everyone how smart he was. And he did, mission accomplished.
>he borrowed $1 million
Note to American brokers, if there are any of you willing to lend me $1 million, please feel free. Just don't expect to see or hear from me again.
Chinese muppets! They'll never learn!
He probably had less opportunity to educate himself in stock market crashes like Americans who have experienced it numerous times and still play the game.
China, welcome to capitalism, now you know how to play (your wealth up the pyramid)
Only older Americans have experienced several stock market crashes. Younger ones, who are typically the new brokers and traders, have generally only seen one crash, and a dramatic rebound that came after. So thier views and experiences are very skewed.
I had no idea that "history" was only what you could remember.
America had crashes as long as they've had a stock market, like an earthquake, build up the pressure (wealth), then earthquake (crash, your money is now up the pyramid), repeat.
Books, internet, Americans can research it.
The Chinese had no history in the stock market, and had no thought (I would think) of researching other's.
You just contradicted yourself.
The chinese can read the history books just like everyone else, yet you go on to say say they have no history in the stock market, well, neither do younger traders in the rest of the world.
The reality is that the majoriy of people only believe what they themselves have experienced, meaning living memory. Sorry, but evidence clearly shows people don't learn from written history.
If you look at casinos in Canada, particularly in Ontario, they are FULL of asians. They LOVE to gamble.
It's too bad for this guy yet at the same time it sounds like he's just your average typicla human looking to make a lot of money in a very short time and ignored all logic and common sense when given that chance.
People can rag on the bankers all they want but your average person is driven by greed and quick schemes just like the bankers are.
MDB - "handful of retail investors".
I wonder how many villages CNBC had to visit to find one farmer who put money into the stock market?
" #19. Propaganda cannot immediately affect strong counter-tendancies; instead it must offer some form of action or diversion, or both."
hopefully they will show us what to do with crooked bankers! Some guillotine shots would be encouraging!
If you're seriously attracted to a market, you're in at the top.
hey on top of that...the government is spent in his name to try prop up the crooked market as the billionaires steal with their scams...I am sure Bridgewater and Citiadel will have great quarters pump and dump the poor!
What the story doesn't cover is the farmer's neighbor who was a slightly lesser fool and got out just in time, making the fortune that the farmer lost.
Pump and Dump.....as the farmer loses the hedge fund gained. Remember that a stock market collapse does not necessarily mean the economy need collapse as thr stock market is just betting on whether stocks will rise or fall supposedly based on events in the real world... but we all know different don't we. Anyway quite the transfer of wealth taking place....
CNBC hahaha. They seem to be everywhere promoting their BS!
The same thing will happen here in the US in a couple of months.
How do you say "Fuck you, Liu - pay me" in Mandarin?
So this is what a greater fool looks like
Chinese Proverb:"Farmer who not careful, get plowed under."...
A woman called Yoon said its High Noon for a farmer; who got dry gulched by the market.
You need a quaker girl with the face of an angel to play that role of hostage turned killer, in the arms of a rogue trader.
That's the only way you walk away from High Noon and keep your face looking fit to figure in Dial M for murder!
Yoon better learn to use the telephone and scissors if she doesn't want to end up as Quaker's oats!
Annnnnd.....it's gone!
This is so depressing.
Same thing happened to Americans in the 1929 debacle. Probably will happen again in the next downturn. The shysters suck the financially not so savvy suckers in and then loot them.
Some laugh at how the farmer was cleaned out but that just shows the Ferengi type economy. That IS american financialism,,, where it is accepted practice for one group to impoverish another and joke about it.
Financial brokers, an apt title, should tell the inexperienced they need to stay out, just like a bank should tell a person he doesn't have the earnings to buy that $500,000 home. But no,,, they look at them as easy prey. And of course,,, they are.
Yes, some made money but for every one that did,,, a thousand lost their shirt and none should have been a participant.
US newspapers were full of similar stories when the US stock market cracked in 1990 and 2007. Many lost thier homes, their life savings and the children's education fund. Feel sorry for them but he broke every rule that exists... bet it all on 1 stock, bought on margin, bought and sold on emotion, trusted what the shysters said, tried to get something for nothing. The small boys should not play with the big boys - they will get hurt.
The best way for sick-minded criminal putin regime to stay in power is to attack opposition and not even let it exist on elections. That was done this monday.
Efforts to inject some of Russia's almost invariably pro-Kremlin regional and municipal legislatures with opposition-minded lawmakers ended in failure in Novosibirsk on Monday.
Opposition firebrand Alexei Navalny's Party of Progress, Parnas and several other opposition parties formed a coalition aimed at providing a platform to like-minded candidates in various Russian regions, including Novosibirsk, where it had lined up three candidates to run for the city's upcoming legislative vote in September.
Weeks of canvassing, rallying voters and otherwise endeavoring to rouse the largely dormant opposition vote in Novosibirsk appeared to prove futile on Friday when a working group of the regional election commission determined that the so-called Democratic Coalition had failed to gather the requisite 10,657 signatures, and thus refused to register any of its candidates.
“The working group that verified the signatures determined only 10,187 of them were valid," wrote Leonid Volkov, a former Yekaterinburg municipal lawmaker and a longtime Navalny ally who runs the coalition's campaign, in his blog Monday. As this fell short of the required amount, the working group recommended that the election commission deny the candidates' request to register for the upcoming elections.
As Navalny had pointed out in a blog entry earlier, their group had in fact gathered 17,500 signatures, and then weeded out several thousand on their own, ultimately handing in 11,682 signatures, each of which the coalition was confident was above reproach.
Unwilling to give up without a fight this time, the Democratic Coalition challenged the election commission's decision.
But after hours of negotiations Monday, their efforts proved to be in vain.
“At 11:47 p.m. [Novosibirsk time], they decided to refuse to register [our candidates]. Our objections, including [documentary evidence], were not considered,” Volkov tweeted.
He announced afterward via Twitter that the coalition would appeal the decision to the Central Election Commission, and declared a hunger strike pending the willingness of election officials to reconsider the evidence.
Burdensome RequirementEarlier this month, Navalny complained on his blog that collecting signatures is an obstacle designed by the federal authorities to undercut opposition figures' efforts to take part in elections.
“Signature collection here [in Russia] is hard work for the real opposition,” the politician wrote. “For [parties that tow the Kremlin line] it's not a problem — they can submit blank pages and will still be registered,” he added.
Analysts interviewed Monday by The Moscow Times agreed that signatures often prove to be the Achilles heels of opposition-minded political hopefuls in Russia. Candidates have to gather adequate numbers of signatures in their support prior to being allowed on ballots across Russia.
In 2014, two well-known opposition politicians — Masha Gaidar, who has since moved to Ukraine to work for Odessa Governor and ex-Georgian President Mikheil Saakashvili, and Olga Romanova, a well-known prisoners' rights advocate — washed out of the Moscow City Duma race after their signatures were determined to be insufficient.
In the same race, Barbara Babich, at the time a 23-year-old unemployed theater college graduate, and a relative unknown, passed the test with flying colors.
Covering Their TracksNavalny and Volkov both claim to have fought hard to ensure the Democratic Coalition's signatures would pass the election commission's litmus test.
“We're the only [group] that is willing to show reporters our signatures as well as the process of collecting them,” Navalny wrote in his blog earlier this month, as the process of gathering signatures in the Siberian capital was in high gear.
Wishing to exceed the requisite 10,657 signatures, the coalition set its sites on gathering upward of 15,000 signatures over the course of three weeks, Navalny wrote in his blog.
Some 300 individuals were hired to collect signatures, and the coalition demanded perfection from each of them, Navalny said.
And Volkov added in his own blog that the process went according to plan. Signature collectors were thoroughly vetted and meticulously monitored. Those determined to have forged signatures were handed over to the police, Volkov said.
The collectors exceeded their goal, managing to gather 17,500 signatures in time for an extensive internal verification process.
Once the signatures were collected, they were scrutinized by attorneys and handwriting experts. Call-center operators then personally contacted the individuals that had signed in favor of the candidates to ensure they had done so voluntarily, and that their signatures had not been forged.
“Of the 17,500 signatures, the … most exemplary ones were submitted to the election commission today,” Navalny wrote in his blog on July 17. “There is no legal cause to deny us the opportunity to participate in the elections,” he concluded.
“Within 10 days [during which the election commission was tasked with verifying the signatures and making its decision] we will know whether the opposition will be permitted to participate in these elections,” Navalny added.
Losing the BattleThe results were released on Friday. Only 10,187 — 470 shy of the required sum — were determined to be valid, leaving the Democratic Coalition candidates ineligible to feature on the ballots.
The majority of invalid signatures were ones the election commission claimed failed to correspond with the database of the regional branch of the Federal Migration Service (FMS).
The coalition immediately began sifting back through, cross-checking each of the signatures that had been declared invalid. “In 53 percent of cases, the errors had been made by election commission employees themselves,” Volkov wrote in his blog on Sunday.
“When the election commission verifies the signatures, they type each name in by hand, and only then do they compare them with the FMS database. [Then] if they find a single comma out of place, they deem the signature invalid,” Navalny wrote in his blog on Saturday.
Both Navalny and Volkov maintained that the signatures deemed invalid were primarily marred by typographical errors attributable to the very officials charged with verifying their authenticity.
Volkov further pointed to errors within the FMS' system. He wrote in a blog entry Sunday that in many cases, the FMS had been using outdated information.
Armed with the results of their research, coalition representatives headed to the election commission to discuss the situation, Volkov wrote: “At first they seemed glad to see us and open to dialogue, but then something strange started to happen.”
An FMS official who was present at the meeting rejected all of their explanations with one simple argument: “There's no reason not to believe the FMS.”
“We showed her [the FMS official] everything. … We said: 'If you have information in your database that a person still owns a passport issued by the U.S.S.R., for example, and we have a more recent passport number in our signature list, isn't it your [FMS] error and not ours?' But she answered 'No, the FMS data is up to date and correct,” Volkov wrote in his blog.
“It's a very comfortable argument [employed] to substantiate a political decision made by the Novosibirsk election commission,” he concluded.
Kremlin PressureDmitry Oreshkin, an independent political analyst and head of the Mercator political research group, echoed Navalny's sentiments that impossible signature requirements can be used as a means of controlling the opposition. Russia's federal authorities prefer to avoid difficulties from the start rather than facing them during elections, Oreshkin said, explaining that in his view, this accounts for the Democratic Coalition's present struggle.
“The Kremlin fears elections at all levels,” Oreshkin told The Moscow Times on Monday, explaining that varying levels of tolerance for electoral fraud can be found throughout the Russian regions. In Novosibirsk, he opined, this tolerance is minimal.
“In the 2011 [State Duma] elections, the United Russia party received a mere 29 percent of the votes in Novosibirsk,” he said, concluding that the ruling party had reason to be wary of the opposition there.
Alexei Mazur, a prominent Novosibirsk journalist and political analyst, said that the coalition's signature collection was transparent. “Everyone in the city saw them doing it, and Volkov was constantly explaining how they were doing it and was answering all questions presented to him,” Mazur said in a phone interview with The Moscow Times.
He sided with Oreshkin's conclusion that the Democratic Coalition’s signature woes were the result of a political decision.
“Sociological research has shown that [members of the coalition] wouldn't make any drastic changes if elected to the local parliament,” Mazur said.
“There would be one or two of their deputies in the parliament among several dozen from other parties,” he said. “But the authorities didn't like the way the mayoral elections in Moscow [in 2013, when a second round of voting was nearly necessitated, thanks in part to Navalny's robust performance], so now they're being overly cautious,” he said.
Navalny has shelved his own electoral ambitions for the time being. A pair of suspended sentences he is serving for embezzlement charges he believes were politically motivated will bar him from any elective office until 2018.
Meanwhile, he has thrown himself into the task of fighting to introduce opposition-minded lawmakers wherever possible in Russia. In recent months, the Democratic Coalition has endeavored to rally candidates in Novosibirsk, Kostroma, Kaluga and Magadan.
Looking for a job at CNBC?
You can't cheat an honest man... or can you?
Spread the blame around, you trusted the broker to.
Forget that your own greed and stupidity came into play.
"Helping" friends is just a way of reinforcing the dumb ass assumption that he knew what the fuck he was doing.
Let's face it is a re-run of the US pre-1929.
Wall street's dumb fucks caused 2008.
Does anyone know what they are doing?
NOT AT ALL, you don't blame the patient for trusting his doctor's advice, or his lawyers. the reality IS we let Wall Street and financial fucks in general get away with robbery everyday.
This guy looks like me when I went to a casino and lost $30,000 in blackjack. It was the most compusive and stupid thing I ever did and I never went back.
Next to me was the high roller baccarat table of all Chinese. They love that shit.
Too bad for me, I was counting on him coming over to the USSA and buying my over priced real estate. China just got japan'ed. Maybe I can get a south american...wait they are getting destroyed as well. Maybe I can get a european, well their purchasing power is getting devistated. I'm not getting many options here for my over priced real estate. Maybe the Govt. will let me get in on the EB-5 scam for buying my over priced real estate.
Yellen will add some zeroes so that it is no longer over priced in real terms.
"Wang Got His Yang Hanged"
or
"Yang Got His Wang Hanged"
or
Chop SOOEY!
Headline choices...New Straits Times
When your god is Mammon.....
A fool and his money !
Time to leave the farm, grasshopper.
Who's the fool?
Many here snicker at the farmer's gullibility.
Of course how many here realise brokerages and market makers are also Fractional Reserve Banks?
How many realise this means this means your "stock purchase" is likely nothing more than a leger entry of purchased stock backed at the reserve ratio...meaning you and your 10 closest friends must fight over who owns the ONE share it ACTUALLY bought instead of the TEN SHARES you thought you bought before someone told you these guys were fractional reserve banks?
Who's the fool?
Hey, Mr. "I-trusted-the-government-too-much: Come make a national speech to the American people.
Soros's Open Society can open the Chinese Society pretty soon.