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2007-06-05 China-Japan-Koreas

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Posted by Anonymoose 2007-06-05 00:13|| || Front Page|| [11124 views ] Top

#1 Zenster, comment?

Posted by gromgoru 2007-06-05 00:51|| 2007-06-05 00:51|| Front Page Top

#2
Mr. gro*goru is High.

-->Leb on Paleo

;-)

Posted by RD ">RD 2007-06-05 03:33|| 2007-06-05 03:33|| Front Page Top

#3 China stocks tumbled 8.3 percent on Monday in their second biggest drop this decade, erasing $340 billion in market value and extending big losses from last week after the government hiked the share trading tax to cool a feverish bull run.

More government market manipulation. While ours might change the prime lending rate, this is a far more serious intervention. The loss of $340 BILLION from a single day's correction speaks of heavily inflated and over-valued stock prices to begin with, much like what I would expect from China's closed economy.

In an apparent attempt by authorities to restore confidence, front-page editorials in official newspapers tried to reassure investors the market's medium- and long-term outlook was still positive, and that the tax hike was merely aimed at speculators.

One can only wonder at just how much of China's market activity is based on "churning" accounts versus actual strategic trading. I doubt online trading in anywhere near as strongly in place as it is here in America. In fact, it appears to be all of one percent of overall traffic.

China's securities regulators recently issued provisional regulations for on-line stock trading, thereby legalizing a business that has been growing in China but without the blessing of the regulators. The regulations issued by the China Securities Regulatory Commission (CSRC) ban non-securities companies such as Internet portals from engaging in any kind of online brokerage. Even securities companies which have licenses for stock trading must apply for qualification for Internet brokerage, according to the regulations. The CSRC demands Internet stock brokers separate their online trading system from other systems. Since 1997, more than 20 securities companies in China have opened online stock trading. According to CSRC chairman Zhou Xiaochuan, online trading now accounts for one percent of the total stock trading volume in China.
[emphasis added]

The fact that online trading has just recently come under regulation bespeaks of a wide-open market and one that is easily subject to irregularities. Compare this to American online trading:

Research done as CS First Boston determined that the volume of American online stock trading is increasing at the astronomical rate of 30 to 40 percent per quarter. Internet brokerage accounts now account for 25% of all retail stock trades and 15% of total stock trades, with both percentages rapidly increasing. We are now seeing a steady movement away from mutual funds and traditional brokers and towards deeply-discounted brokers operating over the Internet.
[emphasis added]

With such a minuscule amount of China's stock trading being done online, it leads me to believe that their market is much more subject to manipulation, by both government and financial institutions alike. It will be extremely interesting to see if overall financial numbers, like price to earnings ratios and other evaluations, will even be made available to the public.

Ever since communist China's birth such critical data has always been regarded as a state secret. With so much of Chinese big business being held by PLA top-brass, release of those numbers might cast an extremely unfavorable light upon China's much vaunted "redistribution of wealth."

But that failed to stop selling by many of the anxious and often inexperienced individual investors who had jumped into the market in recent months for what seemed like easy money.

Also known as shorn sheep.

Zenster, comment?

Two words: Bubble Economy.

Posted by Zenster">Zenster 2007-06-05 04:09|| 2007-06-05 04:09|| Front Page Top

#4 Apparently, few insiders got forewarned about this, so the wealth of important people in China may be in jeopardy. Does anyone know whether this is the case, or do we have inside manipulation at play ?

Posted by Grusosh Borgia9229 2007-06-05 11:00|| 2007-06-05 11:00|| Front Page Top

#5 http://finance.yahoo.com/intlindices?e=asia

I gather that most of the panic selling has ended.

Posted by Anonymoose 2007-06-05 16:54|| 2007-06-05 16:54|| Front Page Top

#6 #4: "the wealth of important people in China may be in jeopardy"

Awwwwwwwww....

Posted by Barbara Skolaut">Barbara Skolaut 2007-06-05 17:54|| http://ariellestjohndesigns.com/]">[http://ariellestjohndesigns.com/] 2007-06-05 17:54|| Front Page Top

#7 China is not so much a bubble economy as a hot money economy. Too much money sloshing around relative to opportunities to spend/invest that money.

Will it lead to 1997 type financial meltdown? Probably.

Posted by phil_b 2007-06-05 21:36|| 2007-06-05 21:36|| Front Page Top

#8 ~~China~~The whole world is not so much a bubble economy as a hot money economy. Too much money sloshing around relative to opportunities to spend/invest that money.

Posted by Bright Pebbles 2007-06-05 22:06|| 2007-06-05 22:06|| Front Page Top

#9 How is the coming slowdown of Chinese imports going to affect their stock market, I wonder? The FDA just blocked Chinese made toothpastes because when tested they were found to contain diethylene glycol. As a matter of public safety they will have to expand the testing, and when they do even more interesting ingredients will be discovered... leading to more product/manufacturer blocks. Life is about to become extremely unpleasant for the Chinese, and losing face is only the least of their imminent problems.

Posted by trailing wife 2007-06-05 22:15|| 2007-06-05 22:15|| Front Page Top

#10 Tee Hee Hee!

Posted by bigjim-ky 2007-06-05 22:20|| 2007-06-05 22:20|| Front Page Top

23:59 Zenster
23:59 RD
23:59 Abdominal Snowman
23:58 RD
23:58 Abdominal Snowman
23:55 Zenster
23:53 Abdominal Snowman
23:51 RD
23:43 trailing wife
23:36 Zenster
23:06 Gabby Cussworth
23:02 bigjim-ky
22:54 bigjim-ky
22:51 trailing wife
22:49 bigjim-ky
22:48 RD
22:47 bigjim-ky
22:46 RD
22:45 bigjim-ky
22:44 RD
22:43 badanov
22:40 Gabby Cussworth
22:36 bigjim-ky
22:31 bigjim-ky