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"We Want The Names Of Anyone Who Sold" - China's Market Witch Hunt Enters Twilight Zone

Tyler Durden's picture




 

Having claimed 'foreign interests' were "waging an economic war" against China, it was ironic that the most outspoken of Chinese SOEs is now under investigation for 'selling' shares when it was told not to. As Reuters reports, China is extending its dragnet for "malicious sellers" to Hong Kong and Singapore as the witchhunt blame-mongery continues, Rather ominously, the China Securities Regulatory Commission (CSRC) has demanded trading records to try to identify those with net short positions who would profit in case of further falls in China-listed shares, three sources at Chinese brokerages and two at foreign financial institutions said. Even more incredibly, as Bloomberg reports, despite total ignorance by US regulators, China is 'daring' to crackdown on market manipulation via 'spoofing'.

China is pressing foreign and Chinese-owned brokerages in Hong Kong and Singapore to hand over stock trading records, sources told Reuters, extending its pursuit of "malicious" short sellers of Chinese stocks to overseas jurisdictions.

The markets regulator, the China Securities Regulatory Commission (CSRC), wants the trading records to try to identify those with net short positions who would profit in case of further falls in China-listed shares, three sources at Chinese brokerages and two at foreign financial institutions said.

 

At its regular press conference on Friday, the CSRC said it had not directly contacted top executives at Hong Kong brokerages. It also noted that it was normal, in the course of an investigation, to reach out to "relevant parties".

 

The regulator has declared war on "malicious short sellers" or those it deems are trying to profit from a fall in share prices, rather than adopt a short position as a financial hedge.

 

"The implied threat by the CSRC is that anything that is not a hedge is a no-no," said a source in Hong Kong with knowledge of the requests. This person added that foreign brokers were likely to comply as best they could with the requests.

 

"When the CSRC makes an offer, you cannot refuse it."

 

...

 

The CSRC has no regulatory power in Hong Kong or other jurisdictions, such as Singapore and the United States, where investment products tracking mainland shares are listed, and can be legally shorted.

 

But market sources worry that Chinese regulators are intent on suppressing any attempt to profit from China's sliding markets, including trying to suppress even legal investment behavior by referring to it as "malicious" or otherwise irregular.

 

At the same time, the government is trying to rally retail investors who dominate trading in China to put money back into the market, a task made more difficult if investors offshore are making bets on falling prices.

As we have detailed in depth previously, spoofers make money by feigning interest in buying or selling at a certain price, creating the illusion of demand in an attempt to make other traders move the market. The spoofer cancels the original order and buys or sells at the new price to make a profit. And so as Bloomberg reports, spoofing has become the latest target in China’s campaign against stock-market manipulation after a $3.5 trillion selloff.

“It certainly looks like spoofing is at play here,” said Bernard Aw, a strategist at IG Asia Pte Ltd. in Singapore. “Given that this practice is seen as market manipulation, it is not surprising to see CSRC stepping in.”

 

The practice, which involves placing then canceling orders to move prices, is suspected in 24 accounts on the Shanghai and Shenzhen stock exchanges, the China Securities Regulatory Commission said on its microblog. The bourses have restricted the accounts and regulators are investigating program traders, who have recently had an “obvious” impact on the stock market, the CSRC said.

 

China’s focus on spoofing follows a probe of “malicious” short selling, part of the government’s unprecedented effort to shore up investor confidence.

 

“The public isn’t happy about the market plunge so the regulator needs to take some actions as a response, and that’s part of the government’s plan to prop up the market,” said Zhang Haidong, the chief strategist at Jinkuang Investment Management in Shanghai. “Whether it’ll be effective remains to be seen.”

*  *  *

As one trader noted,

Spoofing "works on the way up and the way down, so it’s interesting it’s only a problem when it causes equity prices to fall."

And so, just as we have remarked previously, this kind of manipulation will be tolerated in the US markets until such time as stocks begin to tumble then it will be scapegoated as the sole reason why equity confidence collapsed.

 

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Fri, 07/31/2015 - 17:14 | 6376882 LetThemEatRand
LetThemEatRand's picture

It's one of those many times that it's good to be Chinese and be named "Long."

Fri, 07/31/2015 - 17:19 | 6376889 SHEEPFUKKER
SHEEPFUKKER's picture

long duck dong

Fri, 07/31/2015 - 17:36 | 6376945 Captain Debtcrash
Captain Debtcrash's picture

China is not a group of miracle central planners who are going to teach the world a lesson in the upcoming monetary shift as many in the alt financial media would have you believe.  Their success has been the result of shifting from communism, which simply doesn’t work, to fascism, with just enough capitalism to be successful.  They may make moves that appear to be moving in the right direction, but so too did the Soviets.  Their central planning will end in failure as all others.  

Fri, 07/31/2015 - 18:10 | 6377029 NoDebt
NoDebt's picture

NANEX, China is on line 1.  China on line 1.  You finally have somebody who will actually do something with your data.

 

Fri, 07/31/2015 - 18:19 | 6377043 NoDebt
NoDebt's picture

And while I'm at it, I'm going to point out something that is maybe so obvious we missed it...

If you ban selling, nobody can buy.  That pesky "there's two sides to every transaction" thing.

Of course, it's always convenient to blame short sellers.  But short selling isn't the problem, and I can prove it.  If this was caused by short sellers, China could simply ban all short selling.  The US did it.  Europe did it.  Why isn't China doing it?  Two reasons:

1.  The oligarchs are still doing it and don't want to lose that ability.  Only "regular people" won't be allowed to short.

2.  Short selling isn't what's making the market go down.  Simple as that.

Fri, 07/31/2015 - 18:26 | 6377077 OrangeJews
OrangeJews's picture

That's why you have to keep the IPO market going.  Get some liquidity in there so people can buy again!

Fri, 07/31/2015 - 19:07 | 6377212 johngaltfla
johngaltfla's picture

Okay, you've threatened me, so I'll talk. Here is the list:

Goldman Sachs

Citigroup

Morgan Stanley

Barclays

UBS

JP Morgan Chase

Bank of America

HSBC

etc...

In other words the same fucks that manipulate the U.S. markets you dumbases in Beijing! Sheesh.

Fri, 07/31/2015 - 21:14 | 6377534 CloseToTheEdge
CloseToTheEdge's picture

7/1/2015...

The Financial Futures Exchange, which hosts China's stock index futures, said on Wednesday that the 63 overseas institutions that currently trade index futures in China, including Goldman, can only trade for risk-hedging purposes.

 

China Southern hasn't even opened an account at the exchange, the exchange said.

   

"These institutions' risk-hedging using index futures conform to relevant rules, and there's no such thing as massive shorting," it said in its official microblog.

   

The exchange said it would ask regulators to punish those who spread rumors that threaten to seriously disrupt market order.

 

Goldman declined to comment on the rumour. China Southern's Hong Kong unit couldn't be immediately reached for comment as Wednesday is a public holiday in the city. http://www.reuters.com/article/2015/07/01/china-goldman-rumors-idUSL3N0Z...

 

“You don't say 'they all do it' unless you know you've been doing it too.”

Sat, 08/01/2015 - 00:46 | 6377931 old naughty
old naughty's picture

"they" redefined...

no longer farmers, housewives, primary-school graduates...

are we still wondering if the source of the cyber signals are...and for what purpose?

Fri, 07/31/2015 - 18:42 | 6377138 Buck Johnson
Buck Johnson's picture

I agree, and they are doing everything they can to ignore what is happening in china in the MSM.

 

Fri, 07/31/2015 - 18:37 | 6377115 Bloppy
Bloppy's picture

Our rigging is better than your rigging!

 

Jimmy Carter: US ‘now just an oligarchy’

http://tinyurl.com/q33gjbj


Fri, 07/31/2015 - 17:19 | 6376891 Creepy A. Cracker
Creepy A. Cracker's picture

One name: Dear Leader Obama.  Dear Leader sold. 

 

GET HIM!...

Fri, 07/31/2015 - 17:19 | 6376892 TeamDepends
TeamDepends's picture

Long markets enforced at barrel of gun.
-Tu Long Cru

Fri, 07/31/2015 - 17:23 | 6376906 Antifaschistische
Antifaschistische's picture

Is it really that difficult?  Since you're willing to activate the magic plunge protection team then..

...get the list of the most shorted stocks by net-value (not # of shares)

...the activate your prime pump and squeeze the heck out of them like the .gov/debt inspired crew in the US does.

Fri, 07/31/2015 - 17:20 | 6376900 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

It's one of those many times that it's good to be Chinese and be named "Long."

Ah, ah, good US citizen application the sense humorous. This day Chineses "Long" are not "Rong".

Funny as funny because the general message somehow mirrors what you can read on this site.

Fri, 07/31/2015 - 17:23 | 6376905 TeamDepends
TeamDepends's picture

You laff at citizenism?

Fri, 07/31/2015 - 17:25 | 6376912 LetThemEatRand
LetThemEatRand's picture

All your shorts are belong to us.

Fri, 07/31/2015 - 17:28 | 6376920 TheFourthStooge-ing
TheFourthStooge-ing's picture

Alas, alas, three times alas, in Underpants Gnomism, no other way than blobbing up.

Fri, 07/31/2015 - 17:40 | 6376955 PrayingMantis
PrayingMantis's picture

 

 

... "We Want The Names Of Anyone Who Sold" ...

... here's a partial list of names submitted as of yesterday ...

He Hung Lo
Sum Ting Wong
Wat Wen Wong
Hu Yu Hai Ding
Kum Hia Nao
Dum Gai
Stin Ki Pu
Wan Hung Loh
Mi Hung Lo
Tai Ni Po Ni
Wai Yu So Tan
Ai Bang Mai Ni
Chin Tu Fat
Wai So Dim
Tai Ni Bah Bol
Wai Yu Mun Ching
No Pah King
Wai Yu Kum Nao
Wei Ting
Lei Ying Lo
Wa Shing Kah
Yu Suk Kok
Yu Stin Ki Pu
Hu Flung Dung
Yu Fak Ho
Yu So Dum
Hi Dei Kum
Lei Lo
Chew Ba Bit
Sze Yu Sum Dei
Yu Goh Nao
Tai Ni Bei Bi
Haw Long
Oba Mah Suk
Soh Su Mi

 

 

Fri, 07/31/2015 - 17:55 | 6376992 negative rates
negative rates's picture

Here's the complete list

 

Egg Foo Young.

Fri, 07/31/2015 - 18:11 | 6377032 bid the soldier...
bid the soldiers shoot's picture

Remember this?

Josef Suk, Yo-Yo Ma, and James Dick used to be in a Piano Trio together. They were known as the Suk-Ma-Dick trio.

Fri, 07/31/2015 - 18:29 | 6377085 bamawatson
bamawatson's picture

they origanlly performed this :https://www.youtube.com/watch?v=DMO_67C1cGs

Fri, 07/31/2015 - 20:58 | 6377503 agent default
agent default's picture

You forgot Bang Dae-Ho.

Fri, 07/31/2015 - 21:57 | 6377652 nosam
nosam's picture

Won Hung Lo - three tracks in the snow

Fri, 07/31/2015 - 22:00 | 6377657 Nobody For President
Nobody For President's picture

Ho Li Fuk mantis, how long did it take to put that list together?

Sat, 08/01/2015 - 10:18 | 6378309 PrayingMantis
PrayingMantis's picture

 

 

... They're all over the net, NFP,  just go ogle. :) 

Fri, 07/31/2015 - 17:31 | 6376929 Uncle Sugar
Uncle Sugar's picture

Do not mock me round-eye.

Fri, 07/31/2015 - 17:31 | 6376928 Ass. Manager
Ass. Manager's picture

"Love you LONG time" has taken on a new meaning.

Fri, 07/31/2015 - 17:15 | 6376883 Lumberjack
Lumberjack's picture

They made it to ZHTV too!

 

Go Nanex!

Fri, 07/31/2015 - 17:17 | 6376887 Rainman
Rainman's picture

funny shit from the commies .....hey, how do you say ' Mr. Efficient Market ' in mandarin ?

Fri, 07/31/2015 - 17:26 | 6376915 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

hey, how do you say ' Mr. Efficient Market ' in mandarin ?

"US citizenism blobbing up in China, expanding the business of extorting the weak, farming the poor."

Fri, 07/31/2015 - 17:34 | 6376937 ThroxxOfVron
ThroxxOfVron's picture

"US citizenism blobbing up in China, expanding the business of extorting the weak, farming the poor. "

 

As if this had not been the case in China and almost everywhere else in the world since long before the Western Hemisphere was 'discovered' by Europeans.

You know better than that 4thS.

Fri, 07/31/2015 - 18:33 | 6377097 TheFourthStooge-ing
TheFourthStooge-ing's picture

When the future looks less acquired, nothing more comfortable than the certainty of a fabled past. It bears weight when it comes to many US citizen rationalizations.

In the non fabled past, some things that were not so peachy happened in China, like the forceful presence of US citizens.

US citizen indo Europeans have blobbed up faster than anyone else.

US citizens rule supreme, like no one else ever ruled the world, yet they are at a loss when it comes to explain why the world is in such situation. It has to be someone else.

Let's turn the US citizen path and attribute that to human nature.

Fri, 07/31/2015 - 17:20 | 6376888 Joebloinvestor
Joebloinvestor's picture

I'll definitly get in when the get rid of all the short sellers and anyone else who profits on a falling market.

No where to go but up........

 

Remember, they executed the ones who fucked with the pet food and that still didn't stop the shit from happening.

Fri, 07/31/2015 - 17:19 | 6376890 Agent P
Agent P's picture

They want names, I'll give them a name: Serr Hi Bi Ro

Fri, 07/31/2015 - 17:24 | 6376908 Joebloinvestor
Joebloinvestor's picture

If they wanted to stop a lot of this shit, all they would have to do is ban being able to margin a long or short position.

Fri, 07/31/2015 - 17:58 | 6377002 negative rates
negative rates's picture

Yeah, just like trying to ban hookers.

Fri, 07/31/2015 - 17:25 | 6376911 venturen
venturen's picture

so they go up 150% and down 50% and they want names? Well it isn't much different in the US....this will all end very very badly.

Fri, 07/31/2015 - 17:28 | 6376921 Latitude25
Latitude25's picture

I can save the CSRC a lot of time and energy.  Go straight to big Wall Street banks

Fri, 07/31/2015 - 17:44 | 6376942 ThroxxOfVron
ThroxxOfVron's picture

Congress.  The US Congress to a person has been spoofing and shorting China.

The 7 scalpers on the Supreme Court, too.  -Short as midgets I swear.

ALL of the bureaucrats at the IRS, as well.  -Naked short all day every day; not even a clean borrow.   -Laughing in their offices and cracking jokes about it...

It's all being done through the TBTF Banks and it's making the upper management rich rich rich from China market miseries.  Blankfein and Dimon didn't become Billionaires from humbly managing savings account deposits and stocking atm you see...

Check with your legions of hackers: they can verify everything that I have said.

You know where they all are: please come collect the lot, clean house...

No charge for the info.  I'm just trying to do my part to help you to root out these malicious people...

Fri, 07/31/2015 - 17:35 | 6376940 Budnacho
Budnacho's picture

"Yellow-River Brokerage....traded by I P Daily"

Fri, 07/31/2015 - 18:12 | 6377034 CHC
CHC's picture

"Gimme ur wecords or I chop chop off ur noodle!!"

Fri, 07/31/2015 - 18:20 | 6377057 Bemused Observer
Bemused Observer's picture

Well, you gotta admire the Chinese for their forthrightness.
Here they're propping our markets up with all kinds of measures supposed to accomplish that as a result, while denying they're doing it so they don't 'spook the market'. When Chinese markets head south they say "The fuck you ARE!", and forbid everyone from selling. They don't want to spook their market, they want it to shit its pants so it doesn't try this crap again anytime soon.

Fri, 07/31/2015 - 20:25 | 6377434 bid the soldier...
bid the soldiers shoot's picture

The crooks on Wall Street don't need any help propping up their markets, thank you very much.

Fri, 07/31/2015 - 18:28 | 6377084 tarabel
tarabel's picture

 

 

List of short sellers....

Hmmm,

Where did I put my copy of the CCP membership roster?

List of people who want to sell short but are terrified of being dragged off to a labor camp if they do so...

Ah, here's the latest issue of the Red Banner Agricultral Workers Alliance.

 

Fri, 07/31/2015 - 18:34 | 6377106 f16hoser
f16hoser's picture

"Hotel California"

You can check-in, but you can never leave.....

Buy all the Chinese stocks you want, but you can never sell.... Weird...

Fri, 07/31/2015 - 18:35 | 6377108 kchrisc
kchrisc's picture

You cannot buy if no one is selling.

Doubleplusconfused.

Liberty is a demand. Tyranny is submission..

Fri, 07/31/2015 - 18:54 | 6377175 Ajax_USB_Port_R...
Ajax_USB_Port_Repair_Service_'s picture

Zerhoe Henge make truble!

Fri, 07/31/2015 - 19:12 | 6377229 FredFlintstone
FredFlintstone's picture

rots and rots of truble

Fri, 07/31/2015 - 19:11 | 6377223 g speed
g speed's picture

Bullies used to pull this shit after school pitching pennies or playing marbles--as long as they won it was ok for you to leave  but if you won and had some of their pennies/nickels/dimes or marbles--you had to stay till they won them back --double or nothing---- infantile chicken shit assholes----

Fri, 07/31/2015 - 19:18 | 6377245 lester1
lester1's picture

So American oligarchs and banksters are profiting from a Chinese stock market crash!?


Wow

Fri, 07/31/2015 - 19:42 | 6377320 10mm
10mm's picture

It's a big club, and your not in it. 

 

Fri, 07/31/2015 - 19:54 | 6377361 RMolineaux
RMolineaux's picture

The Chinese may be foolish in attempting to maintain their stock prices at current levels.  They should have restricted speculation on margin on the way up (the way our Federal Reserve used to do under Regulation Q).   But their regulatory actions are a useful demonstration of the usefulness of regulatory control, and have exposed abuses that other stock markets would be well advised to prohibit.

Sat, 08/01/2015 - 15:05 | 6379106 bid the soldier...
bid the soldiers shoot's picture

when was that?

(the way our Federal Reserve used to do under Regulation Q

When was that?  The late 70's?

 

 

Fri, 07/31/2015 - 19:58 | 6377371 RaceToTheBottom
RaceToTheBottom's picture

Who sold?

All of Wall Street.  

Have at it china!

Show them no mercy.

Fri, 07/31/2015 - 20:00 | 6377383 bid the soldier...
bid the soldiers shoot's picture

This is the unmitigated ignorance of the author of this article.  He/she is probably cousin to one of the Goldmans or Sachs.  

Paired with the consummate stupidity of the crooks at the helms of the large investment houses that moved into the the Shanghai Stock Exchange in the Spring of 2014.

Greedies who know that lightening doesn't strike twice in except for Jewish Lightening.

 

The Nikkei average finished last year (1983) at 9,893.82 and ended at a record high of 11,190.17 on May 4 (1984)

From the NYT May 18, 1984.

However, Mr. Itoh said yesterday that more fundamental reasons for the drop ranged from the rapid increase in stock-margin debt in Japan to ''high net selling'' by foreigners in the first four months of 1984, along with a fear of higher interest rates in the United States. He added that ''unexpected weakness'' in the yen against the strong United States dollar this month was another factor.

"Increase in stock market margin debt and high net selling...  30 years ago in Tokyo

 What do the writers at ZH want?  Jim Cramer up their rectums with a megaphone?

 

 

 

 

In 1983 the Tokyo Stock Exchange invited Foreign firms to join.  The Nikkei was trading around 9000.  After 6 years of American firms as members of the TSE, on December 29, 1989 the average made it's all time time, 38,916.

Is any body having trouble groking this? If you are perhaps you should get some rufis, go to the Humane Society and adopt a cute poodle.

DEJA VUE 30 YEARS LATER.

The Greedies of Wall St are not trying to quadruple the Shanghai Composite like they did in Japan.  They would have been happy with a double.

But a funny thing happened on the way to the Forbidden City.  The Chinese are not as dumb as Newsoutlet and Blankfein think.

Because there is a good chance that the Chinese were laying in waiting for the Boiz of Battery Park.

Like poor Roland trapped in Roncevaux, blowing his horn to signal  ambush to Lord Obamange .

Are all the US florins converted to Reminmibi to manipulate the Shanghai Market and languishing on the strand of the troubled South China Sea.

Trading halted for some companies and not for others. And while buying is always smiled upon (except to cover shorts), some sellers are grounded, others are not.

Sellers are sought for questioning.  SHORT SELLERS are in the tumbrils rolling into Tiananmen Square.

The propaganda machinery of the West is proclaiming a disaster for China to hide the extreme losses of the Western investors.  The very same machinery who said "What, me worry" when the Dow slipped from 12,000 to 6000 in less than 2 years at the end of the neverending recession.

Does anybody know (not the author, please) whether or not if you bring shekels in to China and convert them to Reminimbi do you have to have the Chinese Central Bank convert them to some other currency to get them out?.

This may be the greatest charade since Obama's first run for the presidency. 

 

 

Sat, 08/01/2015 - 03:54 | 6378063 Element
Element's picture

 

 

"The propaganda machinery of the West is proclaiming a disaster for China to hide the extreme losses of the Western investors"

And not just stawks.

http://www.zerohedge.com/news/2015-07-31/we-want-names-anyone-who-sold-c...

Many very great manufacturing companies now have their balls flapping around in the Chinese breeze.

Sat, 08/01/2015 - 14:54 | 6379081 bid the soldier...
bid the soldiers shoot's picture

yep

tick tock tick tock tick....

Listen,  can you hear the interest clock on Western margin borrowings ticking away on the owners of stocks whose trading was suspended pending criminal investigations?

tick tock tick tock tick tock....

Fri, 07/31/2015 - 22:06 | 6377667 The Ingenious G...
The Ingenious Gentleman's picture

Foreigners have been able to invest in the Chinese markets only since November 2014 and they own only about 2% of the shares in the markets there, so it doesn't seem likely that they were able to influence events one way or another,

Fri, 07/31/2015 - 22:23 | 6377705 bid the soldier...
bid the soldiers shoot's picture

I'm sure foreign brokers want everyone to believe the 2% figure especially their share holders.

Is that 2% of total shares outstanding or 2% of daily trading?

Either way, I don't think China gives a rat's ass whether it's 2% or 20% as long as they have Goldman Sachs by the short and curlies, no?

Fri, 07/31/2015 - 22:14 | 6377685 fzrkid
fzrkid's picture

Wait a minute

 

How can anyone BUY valuable chinese stawks if no one is allowed to sell????

 

 

Sat, 08/01/2015 - 01:06 | 6377949 JoJoJo
JoJoJo's picture

And Hillary wants to punish American stock holders with higher taxes if they sell "too soon."

http://www.theblaze.com/contributions/heres-everything-wrong-with-hillar...

Sat, 08/01/2015 - 03:43 | 6378057 Element
Element's picture

Foreign companies must now head for the door (and airport). I feel sorry for the many companies who recently invested heavily in new production facilities in China and now realize they will probably leave broke, with a central government nationalizing factories and usurping their product and production, and its technology.

What a lesson in resurgent nationalist communism this will be.

Sat, 08/01/2015 - 15:21 | 6379125 bid the soldier...
bid the soldiers shoot's picture

Please don't be sad, Element.

Just try to think about all the people the US has fucked over in 240(?) years.  And the murder, mayhem and collateral damage that ensued.

I'll buy you a beer.

 

Foreign companies must now head for the door (and airport).

Don't forget their officers and managers, if they are under investigation or have been entrapped into shady operations and can not fly home pending criminal trials.

America made a cottage industry out of arresting Russians businessmen around the world under American law and trying them in American courts.

 

Sat, 08/01/2015 - 17:34 | 6379518 Magooo
Magooo's picture

Longdongfuk

Sun, 08/02/2015 - 17:17 | 6382571 JenkinsLane
JenkinsLane's picture

I heard that a guy called Mike Hunt was a big seller, the Chinese need to track this guy down pronto if they want to stabilize their markets.

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