Never mind Greece, look at China

By -
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. Wood30 June 2015 at 08:52

    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. Anonymous30 June 2015 at 13:39

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

      Delete
    2. Marc3 July 2015 at 09:35

      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. Anonymous30 June 2015 at 08:55

    Too late.

    ReplyDelete
  3. Wood30 June 2015 at 17:54

    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
  4. Wood30 June 2015 at 17:56

    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

Post a Comment

Popular posts from this blog

WASPI Campaign's legal action is morally wrong

By -
Image
I haven't written a post about WASPI for a very long time. I felt I had said everything I wanted to say, and it had become evident that the WASPI campaign and its offshoots had neither the widespread support nor the legal arguments that they claimed. Labour's proposed £58bn payment to WASPI women contributed to its disastrous defeat at the 2019 General Election. And in 2020, the hardline Back to 60 group's bid to overturn their state pension age rises failed in the Court of Appeal. The Government had no intention of compensating WASPI women for their lost pensions, and there was neither legal nor political means to force it to do so. The campaign seemed, in short, dead in the water.  But it seems it isn't, quite. Some years ago, WASPI campaign received legal advice that a challenge to the legislation would almost certainly fail but that there might be a case for maladministration on the part of the DWP. Women would have to make individual maladministration claims and
Read more

The foolish Samaritan

By -
Someone has just put this comment on my post " The Golden Calf ": Luke 10:30-37 Jesus replied, “A man was going down from Jerusalem to Jericho, and he fell among robbers, who stripped him and beat him and departed, leaving him half dead. Now by chance a priest was going down that road, and when he saw him he passed by on the other side. So likewise a Levite, when he came to the place and saw him, passed by on the other side. But a Samaritan, as he journeyed, came to where he was, and when he saw him, he had compassion. He went to him and bound up his wounds, pouring on oil and wine. Then he set him on his own animal and brought him to an inn and took care of him.  And the next day he took out two denarii and gave them to the innkeeper, saying, ‘Take care of him, and whatever more you spend, I will repay you when I come back.’ Which of these three, do you think, proved to be a neighbor to the man who fell among the robbers?” He said, “The one who showed him mercy.” And Jesu
Read more

Banking should not be boring

By -
Image
Since the financial crisis, some people have argued that “Banking should be boring”. The idea is that banking should be limited to simple deposit-taking, lending and payments services. We don’t need the trappings of modern investment banking: structured lending schemes, derivative products, complex risk metrics, synthetics and the like. They may be fun to create, and highly lucrative to trade, but they aren’t socially useful. Let’s get back to basics. All we need is little banks, simple products and local bank managers operating the 3-6-3 rule: “Borrow at 3%, lend at 6% and be on the golf course by 3pm”. Banks are so much better when they are boring. Of course, this depends on what you mean by “boring”. A friend of mine is a civil engineer. She is fascinated by sewers. No, this is not a joke (and yes, I know about the “Yellow Pages” advert for civil engineers that said “Boring: see civil engineering”). She really is. Peering into smelly sewers all day is not my idea of an inter
Read more