Big trouble in big over-leveraged China...
[10]
China's Politburo official mouthpiece Xinhua summed up the bloodbath in China in one tweet overnight...
Again?Black Friday. China shares dive 7.4%?worst single day loss since June 10, 2008. pic.twitter.com/6Pyvns287s [11]
— China Xinhua News (@XHNews) June 26, 2015 [12]
Which is odd, since just a month ago, another mouthpiece noted an "authoritative insider" pushing investors to save less and buy more stocks "as economic downside riosks were well managed." China Daily, a month ago, [13]quoted an "Authoritative Insider" pushing the average joe Chinese citizen to save less and speculate more...
He stressed that investment has a vital effect on economic growth: “Seen from the stage China is at right now, whether it can transfer savings to effective investment will be the key to stable economic growth.”
The insider also mentioned that on the one hand the Chinese people are having trouble getting sustainable property income with the high rate of household savings, and on the other hand the real economy and key construction projects lack funding. As a result, more financing channels should be explored to exploit the potential of private capital and transfer more savings into investment.
According to the insider, current economic risks are largely under control, but we should maintain a high level of vigilance over risks related to high leverage and asset bubbles.
But now, as Xinhua reports (via Google Translate) [14],
Shanghai and Shenzhen stock markets plunged more than 7% today fall 4200, over 1500 stocks daily limit. Will this "roller coaster" market stop there? Will history continue to repeat itself? How much further will it fall after the massacre on the A-share stock market day and after.
In this rampant speculation, full of legends of the stock market wealth, wealth and opportunities and risks coexist forever; while everyone wants to share the wealth with this situation in the stock market to make a profit, we hope investors can have more risk awareness!
Local analysts are much more concerned...
"It's a do-or-die moment for all investors," said Dong Jun, a Shanghai-based hedge fund manager. "If retail investors become skittish now, panic selling will continue next week."
“I think this is a very dangerous moment,” says Anne Stevenson-Yang of J Capital Research, the Beijing-based research firm. She’s right. Not only are there the technical liquidity factors she cites, but anything could further rock confidence.
“The tide is going to go out, and there’s going to be a lot of people without their swimming trunks on,” Ewen Cameron Watt, chief investment strategist at BlackRock — which oversees $4.8 trillion as the world’s biggest money manager — said in an interview on Bloomberg Television in London. “We’re seeing it deflating quite rapidly.”
Some context...
[15]
So what happens next? Well it's not pretty... (not egreen and red are opposite in this table)
[16]
This is a major problem, as The South China Morning Post reports, [17]
In China, the burst of a stock market bubble is regarded by the government as a risk for social unrest as millions of retail investors are retired workers who risk losing years of savings, and might take to the streets to protest against the regulator's failure to safeguard their interests.
...
Three journalists at state-owned news outlets said they were told not to use "poignant" comments about the market performance in their articles.
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Remember - it could never happen here in America...
