Never mind Greece, look at China

While all eyes are focused on Greece, there is a potentially far more important crash going on.

Via Sober Look comes this pair of charts:





















China's stock market is crashing. It's very evidently a bubble bursting. The question is, what will be the knock-on effect to the Chinese economy, and indeed to the whole of South East Asia, Brutal sell-offs of this kind are rarely without economic cost, especially when the bubble is debt financed (as this one is). I can't see this ending well.

Related reading:

China stocks are battered anew - WSJ


Comments

  1. Doesn't look as bad with logarithmic scale.

    It's only down 20% from gaining 250% in a year! We might get in for a wild ride up and then loose our shirts. If only we got in a year ago or near 1990.

    Since 1990, it has gone up nearly 800 times. Going capitalist.

    ReplyDelete
    Replies
    1. True, but how much debt has been leveraged off that 250% increase ..

      Delete
    2. It is only the start of the crisis of the stock markets. As the money is no longer guaranteed by gold, the crisis will be very very bad ! http://www.worldcorruption.info/eng/greece.htm

      Delete
  2. Correction:

    From 1990 to the high in 2015 the shanghai market went up only 50 times.

    1990-12-1 9,99.98
    2015-06-05, 5023.10


    http://finance.yahoo.com/echarts?s=000001.SS+Interactive#{%22range%22:%22max%22}

    http://finance.yahoo.com/echarts?s=000001.SS+Interactive#{%22useLogScale}

    Google shows that it last went up 5% June 30 close.

    ReplyDelete
  3. Correction of correction:

    From 1990 to the high in 2015 the shanghai market went up only 50 times.

    1990-12-19, 99.98
    2015-06-05, 5023.10

    ReplyDelete

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