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"If I Don't Come Home, Look After My Wife": What Happens In China If You Sell Stocks

Tyler Durden's picture




 

It’s probably safe to say that at this point, Beijing is fed up with stocks. 

The thing about equities that has the Politburo so vexed is that it turns out they can go down as well as up, and because stocks aren’t people, you can’t threaten them or arrest them, although China did its best to do both by throwing CNY1 trillion at the problem and by halting nearly three quarters of the market at the height of the meltdown.

Ultimately, none of it worked.

Fortunately for Chinese authorities, carbon-based lifeforms still play an active role in China’s stock market even if they’ve been all but replaced by vacuum tubes elsewhere. These carbon-based lifeforms are responsive to threats and intimidation which is why last week, fearing that the plunge protection effort would end up becoming a black hole, China started arresting people. 

And not just a few people or any people, but in fact hundreds of people and important people.

There was Xu Gang, the CITIC executive. And CSRC official Liu Shufan. And let’s not forget poor Wang Xiaolu, the Caijing reporter who, clearly under duress, made the following public confession after suggesting in a story that China’s plunge protection team might be considering an exit from the market (which is of course true): “I shouldn’t have released a report with a major negative impact on the market at such a sensitive time. I shouldn’t do that just to catch attention which has caused the country and its investors such a big loss. I regret . . . [it and am] willing to confess my crime.” 

Now, China is rounding up other industry players and taking them into custody so that they might “assist with inquiries.” As Reuters reports, for some fund managers, being summoned to to provide such “assistance” is tantamount to getting “sent for” by the Italian mob. Here’s more:

Investigations by Chinese authorities into wild stock market swings are spreading fear among China-based investors, with some unsure if they are simply helping with inquiries or actually under suspicion, executives in the financial community said.

 

Chinese fund managers say they have come under increasing pressure from Beijing as authorities' attempts to revive the country's stock markets hit headwinds, with some investors now being called in to explain trading strategies to regulators every two weeks.

 

The authorities' meddling has unnerved many investors, leaving them questioning China's commitment to liberalizing its capital markets and the long-term future of the country's stock markets themselves.

 

Adding to those concerns is the fact that authorities have also been probing investment funds' trading strategies, looking into whether they have been engaging in alleged "malicious" short-selling or market manipulation.

 

Sources told Reuters that the increased tempo of meetings with regulators has become intimidating, especially for foreign funds used to relying on their Chinese brokers to represent them when dealing with Beijing.

How intimidating, you ask? This intimidating:

One manager at a major fund - part of the "national team" of investors and brokerages charged with buying stocks to revive prices – said a friend, also an executive at a large fund, was recently summoned for a meeting with regulators, along with all other mutual funds that had engaged in short-selling activity.

 

"If I don't come back, look after my wife," his friend told him, handing the manager his home telephone number.

Because there's little we could add to make that any more tragically absurd than it already is, we'll simply close with the following clip.

 

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Tue, 09/01/2015 - 20:08 | 6497833 bnbdnb
bnbdnb's picture

Capitalism!

Tue, 09/01/2015 - 20:18 | 6497855 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

 https://youtu.be/Xy3MtznDeqg?t=7s           China is one big team, and it's all about team work.  "Team, yeah team that's the ticket."

Tue, 09/01/2015 - 21:22 | 6498099 doctor10
doctor10's picture

and the difference between these Chinese and all those dead Anglo-American Bankers is?

Tue, 09/01/2015 - 21:55 | 6498202 Squid-puppets a...
Squid-puppets a-go-go's picture

imagine being a chinese stockbroker

your govt says 'you sell we arrest you'

your clients, who are investing money theyve earnt as being high up in the chinese govt, say 'you dont sell, we break your kneecaps'

Tue, 09/01/2015 - 22:00 | 6498221 BidnessMan
BidnessMan's picture

The Chinese don't need nail guns?

Tue, 09/01/2015 - 22:50 | 6498344 divingengineer
divingengineer's picture

Mufuggas MAKE the nail guns!

Tue, 09/01/2015 - 22:28 | 6498289 SmokinMonkey
SmokinMonkey's picture

Only China would try to arrest their way out of a market decline

Tue, 09/01/2015 - 23:34 | 6498444 oncefired
oncefired's picture

Gulags!

Tue, 09/01/2015 - 20:09 | 6497837 cossack55
cossack55's picture

The Chinese are so far ahead of the USSA in justice.......

Tue, 09/01/2015 - 20:17 | 6497862 ZippyDooDah
ZippyDooDah's picture

State-capitalist comrades.  What happens when the mob runs the state.

Tue, 09/01/2015 - 20:19 | 6497875 serotonindumptruck
serotonindumptruck's picture

Ein Volk!

Ein Reich!

Ein Deutchland!

Tue, 09/01/2015 - 20:56 | 6498013 Chris88
Chris88's picture

A mob runs the State?  The State is by definition an extortion racket, seems mob run inherently.

Tue, 09/01/2015 - 20:29 | 6497915 RaceToTheBottom
RaceToTheBottom's picture

We should be H1B'ing their asses to get them over to NYC and clean house. 

Used to be Texas had tough guys.  Now we have to go to China to get any regulators with balls....

Tue, 09/01/2015 - 20:47 | 6497985 Chris88
Chris88's picture

Oh yeah, that's what we need, more regulation.  Holy shit the thought of my having to enter into a voluntary transaction with another adult terrifies me.

Tue, 09/01/2015 - 23:23 | 6498424 sun tzu
sun tzu's picture

We need actual enforcement of the regulations already on the books

Wed, 09/02/2015 - 17:57 | 6501800 Chris88
Chris88's picture

No, we need all the regulation done away with.  We need a market system, we need the market to determine who should fail and who should succeed.  No more needing mommy government to do everything for you.  Grow up.

Tue, 09/01/2015 - 20:11 | 6497841 Bangin7GramRocks
Bangin7GramRocks's picture

Boo Fricketty Hoo! Take your medicine Wang!

Tue, 09/01/2015 - 20:13 | 6497845 serotonindumptruck
serotonindumptruck's picture

What is the Chinese equivalent for "the kiss of death"?

Tue, 09/01/2015 - 20:23 | 6497889 booboo
booboo's picture

mmmm, The Bow of Mao?

Tue, 09/01/2015 - 22:00 | 6498218 mayhem_korner
mayhem_korner's picture

 

 

We chemical planted some folks.

Tue, 09/01/2015 - 20:15 | 6497849 Ignorance is bliss
Ignorance is bliss's picture

I don't agree with rounding up players in the casino. However, I will look after their wives with...a steady one eyed gaze. If you know what I mean. The price of fame and sometimes famine. Good luck boys. You're fucked and so are your wives.

Tue, 09/01/2015 - 20:17 | 6497860 knukles
knukles's picture

Unfortunately the guys rounded up are the straw-men, the fall guys, the patsies made available for the show trials.
All's well, back to work, serfs
What a beautiful dystopia you have there!

Tue, 09/01/2015 - 21:23 | 6498061 Ignorance is bliss
Ignorance is bliss's picture

You are absolutely correct. However, they knew the odds, the risks, the upside...and of course the downside. They had the chance to get out 1 year ago, 1 month ago, 1 week ago they were warned and yet played the game like Steve Austin the 6 billion dollar man.

Litle Richard said "Cocaine is a MF". Well, so is greed. The consequences can be severe.

Tue, 09/01/2015 - 23:00 | 6498365 Handful of Dust
Handful of Dust's picture

Merican markets are no better. Watch the awesome news on CNBC and they succumb to other types of central authority threats. How else can you explain their off-the-wall bogus optimism?

Wed, 09/02/2015 - 13:28 | 6500386 BarkingCat
BarkingCat's picture

The wives will do fine. There is a shortage of women in China so they will find a replacement egg roll very quickly.

Tue, 09/01/2015 - 20:17 | 6497865 Joebloinvestor
Joebloinvestor's picture

In the Chinese version of "Trading Places" the machines get turned back on.

Tue, 09/01/2015 - 20:20 | 6497882 q99x2
q99x2's picture

I liked the Chinese better when they bought lots of Bitcoin.

Tue, 09/01/2015 - 22:48 | 6498330 Ness.
Ness.'s picture

Foneystar encouraged everyone to buy BIT at $900.  Swore it was going to $20K.  It's now hangin on a thread @ $225.  All hail Satoshi, he said.  I didn't buy.  Haven't heard much from foneystar since.  I'm betting his Mom grounded him for the summer.  He's back in skool now.

 

 

Tue, 09/01/2015 - 20:35 | 6497942 FreedomGuy
FreedomGuy's picture

Tell me again, how brilliant are the Chinese? These guys are still commie era authoritarians. They're not that bright. They control their markets as well as they make their products. 

I think you have think twice about any investment in an authoritarian country, especially Communist. Remember, one of their most fundamental principles is that the State owns all things and all things should work to the good of the State. It has been decided that selling and shorting are not for the good of the State. You will suffer accordingly. 

Tomorrow..they will decide gravity is bad for the State.

Tue, 09/01/2015 - 21:17 | 6498076 Ignorance is bliss
Ignorance is bliss's picture

The Chinese are thugs... That's the word you want..
"Thugs" Its not an either or thing. I don't want thugs born here to lead, nor do I want thugs of a foreign nation to lead. I want honest, hard working, mean MFs..to lead, because that is what we need right now.

 

I don't think Trump is the real deal, but at least he plays one on TV.

Wed, 09/02/2015 - 23:40 | 6498546 FreedomGuy
FreedomGuy's picture

Trump is a cannon that shoots in all directions killing friend and foe at times.

Tue, 09/01/2015 - 20:56 | 6497953 matermaker
matermaker's picture

Everyone should be asking themselves a different question.  If the newbies in China are starting to figure out what Al Capone figured out before he called the markets a racket, what are the longer term consequences.  Chinese are REALLY big on gambling.  If they decide the round eyes are nothing but a bunch of cheating bastards, things will get ugly.

Tue, 09/01/2015 - 21:06 | 6498038 matermaker
matermaker's picture

That is in other words, don't shit where you eat.  You can hate on the slopes until the cows come home and the chickens to roost, but the chances are you have neither.  They own all our debt, they make all our crap.  It's like pissing off your drug dealer.  "I'll show you!!  I'll get clean!"  Just another example of how Nixon made the world better.  There are simply not enough wild men of Borneo or lost tribes in the Amazon to fluff us, anymore.

Tue, 09/01/2015 - 21:16 | 6498085 Supernova Born
Supernova Born's picture

indeed.

Tue, 09/01/2015 - 21:46 | 6498173 matermaker
matermaker's picture

Folks are just naive if they don't think it's now obvious to everyone[probably at least partially thanks to ZH] what they are trying to do with the yen/dollar carry.  The Chinese invented things from gunpowder to Sun Tzu to finger traps.  I don't blame the feds for keeping the game up, but it won't last 'til morning.

Wed, 09/02/2015 - 13:39 | 6500462 BarkingCat
BarkingCat's picture

The Chinese invented gun powder but it was Europeans who utilized it to its full war potential.

Tue, 09/01/2015 - 23:10 | 6498392 ThroxxOfVron
ThroxxOfVron's picture

"Chinese are REALLY big on gambling.  If they decide the round eyes are nothing but a bunch of cheating bastards, things will get ugly. "

 

Dude, it's their fucking 'market'.

They aren't rolling the dice in NYC: this is their own oligarchs fucking them over right there at home.

They got sliced and diced by the Maoists and now they have been corralled like feed-lot animals by the charlatans cum nuevo-neo-capitalists that promised better than round-eyes slant-style capitalism.

They just found out they still can't trust the party bosses to run a clean scam with set rules.

https://www.youtube.com/watch?v=zOXtWxhlsUg


Tue, 09/01/2015 - 20:41 | 6497966 CHC
CHC's picture

Jeez Mr. Chinaman in Charge - don't take this shit so fucking seriously please.  Get a grip.

Tue, 09/01/2015 - 20:43 | 6497967 Victor E. Overbanks
Victor E. Overbanks's picture

Tyler, why do you shed tears for 'managers' of 'major funds'?

You play with fire, you get your wife gang-banged by specially trained anal-gorillas as your children are sewn into the human centipede infront of your eyes.

Tue, 09/01/2015 - 20:53 | 6498002 Chris88
Chris88's picture

Yeah, Tyler, way better to side with Statist pigs than private sector, volutnary workers...oh wait this isn't HuffPo, Victor had me confused.

Tue, 09/01/2015 - 20:57 | 6498016 Wild Theories
Wild Theories's picture

For all the scariness, I think it's the other option - they don't know what the fuck the market is and they are finally asking some actual financial people how things actually work.

Tue, 09/01/2015 - 21:02 | 6498032 Yen Cross
Yen Cross's picture

  We need to start a "dead pool" for Chinese fund managers to keep us entertained between the next round of bread & circuses.

Tue, 09/01/2015 - 21:10 | 6498066 JR
JR's picture

Hope you're surviving all this, Yen. Dangerous times, these. "Afraid to hold on Afraid to let go Afraid to find out But afraid not to know..."

Tue, 09/01/2015 - 21:21 | 6498095 nmewn
nmewn's picture

My money's on the dark horse, right now Vice Public Security Minister Meng Qingfeng is waaay out of the money, doing gawds work or sumpin.

Give it a couple weeks of TSHT turbo charged F and I'm retiring ;-)

Tue, 09/01/2015 - 21:28 | 6498054 Supernova Born
Supernova Born's picture

Should have stuck with gambling in Macau.

Tue, 09/01/2015 - 21:08 | 6498055 large_wooden_badger
large_wooden_badger's picture

Replaced by vacuum tubes? When is this article from, 1949?

Tue, 09/01/2015 - 21:38 | 6498139 MSimon
MSimon's picture

Gallium Nitride on Silicon Carbide if you want the latest and greatest.

Tue, 09/01/2015 - 21:13 | 6498075 BlussMann
BlussMann's picture

Gotta love the Chinese - what I wouldn't give to see some of these erswhile smirking, self important MSM "reporters" groveling and admitting their guilt - for encouraging Negros to kill police - among other things.

And... setting Soros fat ass down for a 10 hour interrogation would be, as the ad says, priceless.

Tue, 09/01/2015 - 21:40 | 6498143 MSimon
MSimon's picture

Differential enforcement of Prohibition is doing most of the encouraging.

Tue, 09/01/2015 - 21:14 | 6498078 insanelysane
insanelysane's picture

"If I don't come back, look after my wife," his friend told him, handing the manager his home telephone number."

The friend, a banker by trade, thought to himself; "I already have your number and have been looking after your wife, if you know what I mean."

Wed, 09/02/2015 - 22:09 | 6502725 large_wooden_badger
large_wooden_badger's picture

Eh? Eh? Nudge? Nudge? Know what I mean?

Tue, 09/01/2015 - 21:15 | 6498081 nmewn
nmewn's picture

Meng! Meng! Meng!

Tue, 09/01/2015 - 21:24 | 6498103 robertocarlos
robertocarlos's picture

"I told you no kids, but you wouldn't listen. Well look at you now!"

Tue, 09/01/2015 - 21:45 | 6498167 bankonzhongguo
bankonzhongguo's picture

Shit like this is why I don't live in China anymore.

I had my fair share of close calls - and that was in the good ol' days.

Had a partner thrown out of high up hotel window.

Had a client murdered and then the police staged it as a fake auto accident - try investigating that!

Had a China judgement on a couple of million in missing inventory - PAP spent a year searching the province for missing manger and the goods - he was playing majiang with the local chief of police the whole time.

That's just five years' worth of things I can remember and talk about on the internets.

It's all giggles right up until you are sitting in a little room with no passport.

Funny thing is their representative WILL be the guy that gives the authorities any cause to arrest, confiscate, or expel any barbarian.

They'll do it just for the change in his sock drawer and being on the good side of investigators.

Wed, 09/02/2015 - 01:11 | 6498548 FreedomGuy
FreedomGuy's picture

This is actually the legacy of autocratic corrupt regimes. Everyone learns to lie as a matter of course and swindles are only important if it is the local commisar. If you cut him in, there is no crime. 

Wed, 09/02/2015 - 07:25 | 6498911 lucyvp
lucyvp's picture

We had this once in the states, the place was called Salem Mass.  Before this is all over we will have are return to those times.

 

 

Tue, 09/01/2015 - 21:59 | 6498215 57-71
57-71's picture

This minset reminds me of a Canadian oil company.

CNRL = Canadian Natural Resources = Cunts Nobody Really Likes.

 

Tue, 09/01/2015 - 22:09 | 6498240 fishwharf
fishwharf's picture

I'm reminded of the Kenny Rogers song, "The Gambler."

You've got to know when to hold them,

Know when to fold them,

Know when to to walk away,

Know when to run.

https://www.youtube.com/watch?v=kn481KcjvMo

Tue, 09/01/2015 - 22:36 | 6498309 arrowrod
arrowrod's picture

How is this a story?  On another front, a lion killed today.

It's China.

Tue, 09/01/2015 - 22:41 | 6498323 Salzburg1756
Salzburg1756's picture

Killin komin

Tue, 09/01/2015 - 23:28 | 6498433 bid the soldier...
bid the soldiers shoot's picture

Sometimes ZH is so junior high.

 

I wonder whether the Chinese who were arrested were taking Blankfein's shilling?  

Can we know that sitting on our butts in the West Village.

And why hasn't ZH defined malicious short selling?  Is that beyond the ken of the fabled commenters here?  Imagine two or three investors have been buying certain stocks continually and push the price markedly higher.  

Then, at a certain point after the stock has doubled, these investors or their agents or those in cahoots with them, start to short the stock the original investors were buying relentlessly.  Usually the malicious short selling is accompanied by Munchausenian rumors about profits, a rare discovery or a buyout offer.

After there isn't one more buyer of that stock left, the investors start to sell the original shares they bought at the beginning of this malicious shorting. They start out selling slowly to maximize their profits.  Panic selling soon sets in.

When the stock hits the bottom, then malicious short covering begins. 

Tue, 09/01/2015 - 23:49 | 6498467 SilverFish
SilverFish's picture

You go long Chinese prisons. They sell, they don't sell....either way, U win.

Wed, 09/02/2015 - 01:02 | 6498538 EconoIdiot
EconoIdiot's picture

It takes some serious enginuity and lack of morals to be this advanced in the social - economic realm.  Good Luck to the muppets.

Wed, 09/02/2015 - 01:12 | 6498550 hedgiex
hedgiex's picture

Sensational spiced with anecdotes. The household savings in the stock market is not more than 20% (the household is much more leveraged in the property sector). There is an equal if not more number of middle class households that are not i the stock market. They do not give a damn to what happen to these same snake oil peddlers. They have other worries. What can tank China is not their stock market as their financial economy is not even 30% of their real economy. Anyway...a good try but a shallow spin. 

Wed, 09/02/2015 - 01:18 | 6498556 ymom11
ymom11's picture

Ladies and gentlemen, free makrets!

Wed, 09/02/2015 - 02:12 | 6498606 roddy6667
roddy6667's picture

Wow! Sympathy for fund managers?  How about a day of thanks for vultures and maggots?

Wed, 09/02/2015 - 06:41 | 6498849 Raul44
Raul44's picture

China already lost its reserve currency chance before they even tried with these moves. Only fool would entrust them with that.

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