30 minutes after opening, the Chinese Stock Market collapses another 7%…
China’s entire equity market was shuttered within half an hour of opening after falling 7 per cent on further currency weakness as government rescue efforts failed to deter the tide of sellers.
China’s stock market meltdown and currency depreciation have spooked international investors in a replay of last summer’s rout that reverberated around the globe. So far this year — just four days — the bluechip CSI 300 index is down 12 per cent.
Newly minted circuit breakers, introduced and first tripped on Monday, kicked in again on Thursday after the CSI 300 fell 7 per cent. Trading was halted for 15 minutes after the index lost 5 per cent, but as stocks continued to fall the full-day closure was triggered.
Investors were rattled by further weakening of the renminbi, said Wang Jun, analyst at China Securities Co in Beijing. “It was a panicked response to the forex market,” he said. “Accelerating exchange-rate depreciation could lead to liquidity problems. Valuations can’t help but take a pounding.”
The renminbi fell to its weakest level in nearly five years on Thursday, with capital outflow pressure still heavy even after more than a year of nearly uninterrupted outflows. The renminbi was 0.6 per cent weaker on Thursday morning at 6.5928 per US dollar after falling by roughly the same amount on Wednesday.
Policymakers appear uncertain about whether to wade back in to buy stocks with state funds or to stand back. On Tuesday, the “national team” of state-owned financial institutions appeared to re-enter the stock market after remaining on the sidelines since late August.
…so much for the billions they dropped to keep it afloat – it’s a nightmare. We have a Government who have put all our economic cows in one Beijing paddock and we have a mainstream media utterly asleep at the wheel who are currently focusing on celebrity pets, TV3 bums and Jamie Whyte telling us there is no poverty in NZ.
It’s like no one is either watching the news or they have no bloody comprehension what is happening! We are witnessing a slow motion global crash that could herald in a depression unlike anything we’ve witnessed. All of this links back to the first GFC in 2007/2008 and the black swans are all coming home to roost flying first class.
Can someone please wake the Government up or at the very least sack the holiday journalists running the news rooms. NZers are going to wake up to an economy in ruins before they even know why it’s happening. At the very least NZers should be warned to pull all their Kiwisaver accounts out of stocks and put them into the most conservative and safest accounts.
Not to mention that Spain has actually defaulted.
Ukrain has actually defaulted.
An island off Mexico who’s name escapes me right now, has actually defaulted.
The big scalp is, Saudi Arabia, will default.
Sorry for not caring but the NEWYEARS alcohol brain damage has not repaired itself yet, does this mean that Auckland houses are about to get 7% more affordable or does it only apply to the next shit load of Chinese ship we are importing instead of rolling our own.
The same thing is happening as it did happen in the years leading up to the Global Financial Crisis (GFC) in 2008. Then there were only very few voices that dared raise concern, some were leading economists, but their criticism was not registered much. As the majority of “experts” and economists worked and still do work for vested interest holding banks, finance companies and merchant bankers, they dared not even think of the likely collapse, and they avoided saying anything that would create uncertainty. But the inevitable did then happen, and we know the rest.
So we do once again have finance experts, economists, business leaders and politicians all over the show talk of some “needed adjustments”, “expected slowing of the Chinese economy”, the overdue “change from a manufacturing to service focused economy”.
Nobody dares speak out the extremely high risk that exists in a huge economy, where massive debt levels have been reached in regional and urban administrative areas, creating over capacities, also massive infrastructure projects, that are now in many places lying idle.
People in China borrowed and spent, others spent most of their savings on real estate, some new, desired consumer goods, but also have a fair few gone into shares, as a bit of a speculative gamble is a popular past time with many Chinese.
Although the share-markets there are smaller than in many western, developed countries, the new significant downward trend is a great worry, as it signals that there is a loss of confidence and trust, there are real, serious concerns about the future economy of China.
The growth for so many years was unreal, and growth cannot go on endlessly. When it came to China, all “experts” seemed to agree, the usually accepted “boom and bust” cycles of about 4 years in duration would apparently not apply there. How bizarre, it went contrary to all economic conservatism, against all known theory and practical experience.
Now it seems the change from manufacturing to a consumer focused service industry based, modern, developed China is not going according to plan. If it was, we would not have such serious slumps, as the people there would be taught and informed to change behaviour and to invest in new technology, and also change their ways.
What happened though, since the economic miracle in China started, the agenda was to lift the poor into the middle class and riches, by letting them follow the same consumerist obsessions as the US and other western societies and economies had got used to over decades before.
With pollution and climate change forcing a radical change, the people do not seem to grasp, understand and act as needed, and rather cling to the indoctrination and consumerist, and hard work and hard saving values that they were taught since the late 1980s.
Prepare for a hard landing of China, dragging the world economy right down, possibly now bringing the real adjustment, that should already have come with the GFC. We may now be in for the real crisis, the worst one after the Big Depression, as too many signals head into the same direction as then. Massive over capacity, lack of demand, uncertainties, and a vicious cycle downwards, seemingly unstoppable now. Cheap oil cannot reverse it, as it will only bring other negative consequences, and would stop the needed “ecological revolution”.
China, yes mankind as a whole, are stuck in a rut, heading towards the abyss. As in earlier major crisis situations, prepare for nationalist fervour to be incited, to manipulate populations, to keep governments in power, and that may lead to greater tensions and major wars to be fought.
That is in my view, where we are heading.
It’s pretty simple really. New Zealand increased its total debt by around $150 billion in ten years, and we only managed a couple GDP points growth. So we wasted a lot of money on fluff.
China on the other hand will have economic pains. Jobs will disappear. But food in China will still be cheap enough that every one can still eat out. Energy costs are still low, public transport is pretty good and cheap, housing is pretty cheap. If you were to spend a couple trillion dollars, it wouldn’t looked to dissimilar to how China has grown.
And remember, Russia has already gone through its recession, the crowd cheered at Russia economic woes, when it raised there rates by 17%, and they just shrugged it off.
If only our economies could be so resilient
Yeah well we have spent millions and billions on police computers and IPads. And spend millions more collecting data and reports.
So we have the technology and funds to publish crime states in real time. Much more efficiently than we do now.
But this solutions are just to sophisticated for the geriatrics in charge.
“An island off Mexico who’s name escapes me right now, has actually defaulted.”
That would be us, New Zealand, Sam?
(or soon to be us)
This is beautiful so had to post:
http://geopolitics.co/2015/08/16/the-teardrop-a-gift-from-russia-to-america-that-you-havent-heard-about/
Back to the point: here’s Benjamin Fulford’s take on the markets:
http://geopolitics.co/vital-issues/ben-fulford/khazarian-financial-system-and-mafiosi-under-systematic-attack-as-world-revolution-unfolds/
Reuter’s take on China’s economy
http://uk.reuters.com/article/uk-china-markets-economy-idUKKCN0UP1CV20160112
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