# China to Take Down World Financial Markets



## Kimosabi (28 March 2007)

> *China to Take Down World Financial Markets*
> 
> Mar 27, 2007 - 05:19 PM
> By: Christopher_Laird
> ...




Now I usually treat the above articles with a grain of salt, but could it happen?

Would China want to take down world markets?

Are they in a position to be able to take down world markets?


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## CanOz (28 March 2007)

Considering that a staggering amount of credit has flowed into the Chinese markets lately, i think it would be last thing they would want to do. I really think they want to cool things off without causing a national crisis. 

However...given the irrational nature of the markets here, i'm not sure they will accomplish that in the manner they have in mind. 

You know to me, i think the 'perfect storm' situation that i mentioned on like..Feb 27 or something...has just reformed...but this time there is a more intense geopolitical issue, with Iran etc. 

Not too mention the technical situation....for fear of starting a fearce new dabate.

Pull your shorts on?

Cheers,


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## Realist (28 March 2007)

China's economy is small as a proportion of the worlds economy.

They are less powerful and less important than the state of California.

China as a country could fall off the earth and not affect the market much, anything they add (like buying resources) is offset by the wealth they take by manufacturing cheap crap.

This article is bollocks and should be ignored.


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## YOUNG_TRADER (28 March 2007)

Realist said:


> China as a country could fall off the earth and not affect the market much,


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## reece55 (28 March 2007)

Realist said:


> China's economy is small as a proportion of the worlds economy.
> 
> They are less powerful and less important than the state of California.
> 
> ...




True, China's economy at present represents a small part of the world economy.

However, the fact remains that when China came off big time in Feb by 9%, world markets in tandem went down (albeit not as dramatically as China). The reality is, China off big time = world markets off big time.... + it's not like other markets aren't in srife, look at the US (economy could go into recession) and tensions in the Middle East. I wouldn't say pack up shop and sell your shares tomorrow, but China is definitely one to watch. It is interesting times and worth a think.

Cheers


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## Realist (28 March 2007)

I am serious YT.

China makes up about 2% of the world economy.  It is smaller than Japan.

It is largely irrelevant. But severely overhyped.


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## chops_a_must (28 March 2007)

Realist said:


> China as a country could fall off the earth and not affect the market much, *anything they add (like buying resources) is offset by the wealth they take by manufacturing cheap crap*.



Hahahaha, hilarious.


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## Realist (28 March 2007)

reece55 said:


> However, the fact remains that when China came off big time in Feb by 9%, world markets in tandem went down (albeit not as dramatically as China).




The ASX did dip, but recovered very quickly.

A mere blip.


Chinas impact is more about its potential - where will it be in 50 or 100 years time?

Will every Chinese kid wear Nike shoes, eat McDonalds and use a Microsoft computer?  If so these companies are gonna be alot richer than they are now?

Maybe not, American kids may wear Chinese owned and made shoes instead..


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## Realist (28 March 2007)

chops_a_must said:


> Hahahaha, hilarious.




Hahaha...   

The point is....


Will Nike for instance sell Nike shoes to the Chinese and make Billions?

Or will China own and manufacture shoes so good and so cheap that Nike goes the way of the English car manufacturer?


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## Uncle Festivus (2 May 2007)

Realist said:


> Hahaha...
> 
> The point is....
> 
> ...




I choose option 2. 



> China as a country could fall off the earth and not affect the market much



 I actually agree with Chops - hilarius if you actually think this.

Woops, another exponential chart


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## Kimosabi (2 May 2007)

Uncle Festivus said:


> I choose option 2.
> 
> I actually agree with Chops - hilarius if you actually think this.
> 
> Woops, another exponential chart




It would be nice if this was our market...


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## hongwong (2 May 2007)

Interesting to read.

I believe China is a country that built on manufacturing.  Therefore what happens when the world does not want any of china goods?

Ok next point China says we will close its doors, people would look else where to manufacture their goods.

The wealth part.

I think there is one part of the wealth equation you are missing.

Hard cash and not borrowed cash.

Japan and USA live on borrowed cash.  
What this means.
You have a credit card, you spend 2,000.  You look rich you feel rich but you have to pay it back. 

Japan vs. USA
When Japan was rich in the 80’s and was a manufacturing super power, The USA still had full control of the USA because of Japan need raw material.  So America would ship over wheat, steel and oil and return get manufactory goods from Japan.  Everyone was happy.  
But Japan Surplus was growing so they invest and over paid for USA assets.  (Rockefeller centre is an example).
For example you paid 1000 for something but your return was only .10 cents.  Then to make matter worst, America devalue it dollar so you return was even less.

China vs. USA.
China still holds a lot of cash.
China has a lot of raw materials, For instance when USA said "we aren’t gong to supply you oil", China went to the Russians.
USA put an embargo on Chinese goods.  Chain responds by putting an embargo on USA material.
USA looks for a cheaper country to buy it goods.  But China can produce the cheapest goods and the USA consumer is screaming “I want cheaper goods”.  
If the cost of goods rises in USA, this causes a problem.  Inflation which is a big no no in the USA and suddenly I need to borrow more to get basic items and can’t afford the luxury items that are made in the USA.

So if China did fall off the face of the earth, I guess no one would care as you can find other country that can manufacture goods.

But China has a big ace.  It has the manufacturing power and minerals. (It just lacks energy to sustain, this growth). So the potential that Chaina will one day be a consumer that can take on the USA in the consumer relam.  Look around Shanghai, they love to shop and not just for rice.


Thanks


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## noirua (2 May 2007)

Kimosabi said:


> Now I usually treat the above articles with a grain of salt, but could it happen?
> 
> Would China want to take down world markets?
> 
> Are they in a position to be able to take down world markets?





Hi kimosabi, Your article SAYS that China has reached 18% growth. China's growth in 2006 was 10.7% and in the first 3 months of this year was 11.1% on an Annual basis.
Can you please enlighten us further on this 18% figure?

This article shows the 11.1% growth figure:  http://news.bbc.co.uk/2/hi/business/6570713.stm


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## Kimosabi (2 May 2007)

noirua said:


> Hi kimosabi, Your article SAYS that China has reached 18% growth. China's growth in 2006 was 10.7% and in the first 3 months of this year was 11.1% on an Annual basis.
> Can you please enlighten us further on this 18% figure?




I wouldn't have a clue, I'm just the messenger, don't shoot me...


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## Temjin (2 May 2007)

I put it this way,

- It's already well known that the stock market is pretty much globalised. The recent drop in the Chinese market affected other markets across the globe. The markets went back up because it was eventually regarded as a correction.

- Chinese stock market CANNOT sustain it's rally forever. Ask yourself if you think the Shanghai index will continue to increase by 100% per year for the next 10 years?

- In addition, Chinese stock market is fueled by cheap credits. Since I'm a Chinese myself, I am fully aware of the situation over there. Even average mums and dads are borrowing as much as they can from their mortgage to invest in the share market at the moment. Too much cash is flowing in and valuation is way off the scale.

- History show a boom is always followed by a crash. The boom in the chinese stock market is "fairly" similar to the internet boom at the moment. Eventually it will fall, there is no doubt about it, but who knows when?

- And when the chinese stock market finally crash, it will bring other stock markets with them. 

- It's UNREALISTIC to ASSUME that this scale of immient crash will have LITTLE effect on the world market. Anyone could put up a number saying China only accounts for 2% of the world economy or whatever, the reality is that when china falls, everyone else falls. 

- The Chinese government definitely do not want a crash in their local stock market, so they will most likely to intervene to limit the damage. But do you think they could control it? How? They can't just tell everyone, "You are not allowed to sell your stock", etc. The foreign investors would be uttely pissed off. 


My conclusion, the chinese market is definitely going to crash sometime in the near future and will bring other markets along with them. No one knows how much the effect will be, but the only thing certain is that if you have any Aussie stocks and think they are "immune" from the chinese market crash, then you are not taking the big picture seriously enough.

Some interesting articles to read,

http://www.latimes.com/business/la-fi-chinastocks16feb16,0,6712382.story?coll=la-home-business

http://www.safehaven.com/article-6945.htm


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## hongwong (2 May 2007)

Uncle Festivus said:


> Woops, another exponential chart




Uncle Festivus,

Maybe we should look at other factor.

Amount of IPO that went ahead on the Chinese stock exchange vs the growth in share trade volume vs growth in price.

Imagine your super market.  It has only milk and bread.

I now put flavoured milk, whole meal bread and sweets on the super market floor.  
volume would increase and hopefully sales.

Thanks

edit 

Just read Temjin post.
Yes the China stock market is running hot.
I dont know when it will crash or if it will crash.  I think the P/E of companies are still health in China and there is still a demand for chinese goods.


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## Lucky (2 May 2007)

noirua said:


> Hi kimosabi, Your article SAYS that China has reached 18% growth. China's growth in 2006 was 10.7% and in the first 3 months of this year was 11.1% on an Annual basis.
> Can you please enlighten us further on this 18% figure?
> 
> This article shows the 11.1% growth figure:  http://news.bbc.co.uk/2/hi/business/6570713.stm




You Bewty we've still got 6.9% to go.  Good times


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## Temjin (3 May 2007)

hongwong said:


> Just read Temjin post.
> Yes the China stock market is running hot.
> I dont know when it will crash or if it will crash. I think the P/E of companies are still health in China and there is still a demand for chinese goods.




P/E of companies are not the real issue here, they never provide any real indication of an immient market crash. Fundamentally, of course there are still huge demands for Chinese goods. 

However, you got to realise the recent surge in stock prices is purely speculative from cheap credits and poor regulation. 

Most leading contrarian investors would say, "When your fellow public toilet cleaner start getting into the share market, it's time to get out of there". 

Just read the links, you have SHOE SHINING BOY in China BORROWING money to INVEST in the share market. Talk about crazed speculation! Just look at the greed out there.


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## chops_a_must (3 May 2007)

Temjin said:


> Just read the links, you have SHOE SHINING BOY in China BORROWING money to INVEST in the share market. Talk about crazed speculation! Just look at the greed out there.



It's got nothing to do with greed.

It's just that chinese citizens are only allowed to put their money into government backed bonds or bank account, which pay interest that doesn't even keep up with inflation, or into the stockmarket. Analysing the chinese stock market is pointless because of this obvious distortion.


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## Uncle Festivus (11 May 2007)

Another exponential chart - too scary for words  .

*NEW YORK (MarketWatch) -- China's booming A-share market could turn into a bubble if speculation among exuberant domestic retail investors is not curbed, Goldman Sachs warned Thursday, as the Shanghai Composite Index hit yet another intraday record high. *
"Market trading statistics, liquidity indicators, and anecdotal evidence all point to optimistic, if not exuberant, sentiment in the domestic market," said Thomas Deng, analyst at Goldman Sachs, in a Thursday research report. 
"As speculation continues to be nurtured among domestic retail investors, we see genuine risks of market euphoria materializing if regulators fail to step up their efforts to contain market irregularities," Deng said. 
Other financial firms, including UBS Securities, as well as Governor Zhou Xiaochuan of the People's Bank of China have also expressed concern in recent days about the possibility of a bubble forming in the stock market.


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## professor_frink (11 May 2007)

UF(or anyone else that thinks China can bring world stockmarkets down),

Exactly how does the performance of the Chinese market have any impact on the rest of the world's financial markets?

I'm sorry, but I just don't get it


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## CanOz (11 May 2007)

professor_frink said:


> UF(or anyone else that thinks China can bring world stockmarkets down),
> 
> Exactly how does the performance of the Chinese market have any impact on the rest of the world's financial markets?
> 
> I'm sorry, but I just don't get it




It would have to be an outright financial disaster for it to affect thier growth and therefore the continued growth of the other dependant economies. There a school of thought however that believes the panic it would cause would certainly stir emotions in other markets.

Cheers,


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## nizar (11 May 2007)

Temjin said:


> the reality is that when china falls, everyone else falls.




Is there any real proof of this "theory" besides the late Feb mini-correction?
No - i didnt think so.
I tend to agree with Prof.


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## wayneL (11 May 2007)

All may soon have an opportunity to test their favourite theory.

Fundamentally, I doubt the Chinese SM has any impact at all. The big question is sentiment. Just as a serious route on wall street will take out world markets more because of sentiment than fundamentals. It now may be the same with the Chinese SM.

But that definitely remains to be seen.


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## professor_frink (11 May 2007)

nizar said:


> Is there any real proof of this "theory" besides the late Feb mini-correction?
> No - i didnt think so.
> I tend to agree with Prof.




The chart UF posted earlier explains it all- nobody paid attention to the market losing 50% in 2004/5, yet now it's supposed to matter!

I agree with WayneL, we will find out how much sentiment will be affected by any major correction at some stage in the near future.

And of course I could be wrong about all this. In fact, it would be good in a way if I was- nothing better than being awake trading the market when it begins, so we can position ourselves nice and early for any selloff to come. Much better than waking up to a nasty gap down, or even worse for me, staying up until 5am watching the overnight session on the spi tryng find a good entry


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## CanOz (11 May 2007)

professor_frink said:


> or even worse for me, staying up until 5am watching the overnight session on the spi tryng find a good entry




Is that what your doing now Prof?


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## professor_frink (12 May 2007)

CanOz said:


> Is that what your doing now Prof?




Nope. I had just arrived home from the pub:drink:


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## bean (12 May 2007)

The US markets in a blow off top.  Will in there correction cause world market to fall. When that happens you should look to China as its falls increase faster.
SO it will be the US then China joining in the party

87 crash most likely


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## nizar (12 May 2007)

bean said:


> The US markets in a blow off top.  Will in there correction cause world market to fall. When that happens you should look to China as its falls increase faster.
> SO it will be the US then China joining in the party
> 
> 87 crash most likely




We havent had the verticle rise that preceded the 1987 crash.
The US markets havent doubled in the last 12 months.
Please do some research and look at some charts.


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## CanOz (12 May 2007)

bean said:


> The US markets in a blow off top.  Will in there correction cause world market to fall. When that happens you should look to China as its falls increase faster.
> SO it will be the US then China joining in the party
> 
> 87 crash most likely




You really need to start adding a bit of substance to your posts Bean....your just ranting on...

I didn't see a blow off top...what is your definition of a blow off top anyway?

Sure, markets are toppy, your not surprising anyone with this information...everyone knows it coming. 

And exactly how do you come up with the conclusion that it will be like '87, what similarities are there?

How about a bit more analysis?

cheers,


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## nioka (12 May 2007)

bean said:


> 87 crash most likely




As someone who was around in 87 I can assure the circumstances are much,much different this time around. Forget the USA. They only think they control the world finances. They no longer do. China and India are the new powerhouses for Australian prosperity. China has the power to make or break our financial future. If they continue to take our minerals and technology then we are OK. (Backed by the ever increasing super funds needing a home) 
Watch for a break in demand from China, if it happens I will be changing my strategy but not before.


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## seafarer (12 May 2007)

Hi Guys,

I personally don’t think there is anything to worry about until the end of the Olympics when that’s over then they will try to take control of the economy and it will have an effect on ours, especially the resource sector by around 10% I would guess just my opinion.


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## constable (12 May 2007)

bean said:


> The US markets in a blow off top.  Will in there correction cause world market to fall. When that happens you should look to China as its falls increase faster.
> SO it will be the US then China joining in the party
> 
> 87 crash most likely




Give a rest Bean. You screwed up your prediction for last Thursday by the way. Now what?, just keep trying every week? Is it because youve gone to cash and you pissing yourself off, missing out on a stellar last couple of weeks?


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## Kimosabi (12 May 2007)

nizar said:


> We havent had the verticle rise that preceded the 1987 crash.
> The US markets havent doubled in the last 12 months.
> Please do some research and look at some charts.




Well looking at this charts, I can't see much difference between now and 1987, and if/when it does go pop, I wouldn't be surprised to see the AORD drop to between 3000 - 4000, sorry...








source ==> http://www.dailyreckoning.com.au/australian-sharemarket/2007/05/10/


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## constable (12 May 2007)

Kimosabi said:


> Well looking at this charts, I can't see much difference between now and 1987, and if/when it does go pop, I wouldn't be surprised to see the AORD drop to between 3000 - 4000, sorry...
> 
> 
> 
> ...




Similar graphs but surely vast difference in their creation. I cant help but think the china and india story is only half read.


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## reece55 (12 May 2007)

Kimosabi
The comparison between 87 and now simply isn't there, if we were to use a percentage based comparison, the XAO would have to reach 12 K before it were as hot as 87.......

A 3 - 4k drop just isn't on the cards mate....... Yes, we need a pull back, but 3000 points just isn't going to happen IMO. If you want to review a bubble market, see China - now that market could definitely halve within a couple of days. But our market is far from excessively overvalued, we just need a slow down to the parabolic rise.

Cheers


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## Kimosabi (12 May 2007)

nioka said:


> As someone who was around in 87 I can assure the circumstances are much,much different this time around. Forget the USA. They only think they control the world finances. They no longer do. China and India are the new powerhouses for Australian prosperity. China has the power to make or break our financial future. If they continue to take our minerals and technology then we are OK. (Backed by the ever increasing super funds needing a home)
> Watch for a break in demand from China, if it happens I will be changing my strategy but not before.




Well looking at the record prices for most commodities we have seen in the last few years, if I was Chinese, I'd be thinking to myself, what can we do to stop paying a premium for these resources?

This is Business Management 101.

Currently the Chinese have had a compelling reason to pay top dollar for these commodities, and that is primarily for the Olympics.  If anyone thinks they are going to keep paying top dollar for commodities after the Olympics, think again.

You've also got one of their biggest customers currently falling into recession, on top of which, the Chinese have accumulated 1.2 Trillion US dollars(which isn't real money anyway) and is currently being devalued.

On top of all this, we have got massive expansions of existing mines and infrastructure, as well as a string on mines that weren't economical being re-commisioned, and ten we have a stack of new mines coming on-line over the next few years, so then don't be surprised to see a situation of over-supply and under-demand which then crashes commodity prices.  The Chinese could decide to have a holiday for a year and most of our miners would be wiped out.

This is Business Economics 101

Oh, that reminds me, we have happily welcomed the Chinese (much like we did with the Japanaese) with open arms to buy 10-20% stakes in our mining companies, which normally means they get at least a seat on the board and an intimate knowledge/influence of the happenings in our resource companies.  Do you think they did this as an investment, to guarantee supply, or for possible manipulation of the commodites market.

This doesn't sound much different to what was happening with the Japanese in the 80's and let me think, what ever did happen to the Japanese...

I'll also quote from someone I was having a beer with the night who was also around in 1987, and his comment was, "The only difference between now and 1987, is that we have "actually" got some real projects happening this time"

And the last thing, don't underestimate the ruthlessness of the US and the lengths they will go to, to stay top dog.

Currently, I think the Chinese have been played for suckers, they have paid top dollar for their commodities, they have sold their trinkets cheap, they have accumulated much of Americas debt, and the US currency they have accumulated (which isn't real anyway) is currently reducing in value.

I wouldn't be surprised in 5-10 years to see China repeating what happened to Japan and the US still being top dog, because I don't think that the real powers to be, would ever want to see China as top dog...


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## jaolsa (12 May 2007)

"Shanghai market is currently approximately 95% above its 200 day moving average.  To put that in perspective, in the history of the Dow Jones Industrial Average, including wild speculative binges such as 1929, we are unable to find a market high that was more than approximately 55% above its 200 day moving average.  Perhaps the amazing upward explosion in the Nasdaq leading to the March 2000 peak comes to mind as a similar market bubble to be compared with Shanghai.  That market also stopped its runaway phase right around the 55% mark above its 200 day moving average.  

In our experience, these types of bubbly blowoff market phases are more conducive to subsequent crashes than they are to subsequent economic booms.  It is difficult to conceive that a market almost 100% above its 200 day moving average will end up in any way but a negative fashion.  Only time will tell." 



quote from stockmarket cycles


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## bean (12 May 2007)

constable said:


> Give a rest Bean. You screwed up your prediction for last Thursday by the way. Now what?, just keep trying every week? Is it because youve gone to cash and you pissing yourself off, missing out on a stellar last couple of weeks?





What planet are you on!! 
Last thursday the only thing green was US$ everything else was down.
And the closing price in the DOW last wednesday night is so far the high!!!


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## constable (12 May 2007)

bean said:


> What planet are you on!!
> Last thursday the only thing green was US$ everything else was down.
> And the closing price in the DOW last wednesday night is so far the high!!!




A very small truth Bean is what your hanging onto, but last thursday it was far from the massive corection you were predicting sorry if your predicting capabilities have taken a blow!


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## Kimosabi (12 May 2007)

reece55 said:


> *But our market is far from excessively overvalued, we just need a slow down to the parabolic rise.*
> 
> Cheers




I'm sorry, but I can't help find this statement somewhat amusing.

I'm sure there were plenty of people in Japan who thought the NIKKEI could never go back down to 7600 from over 40,000, but it did....


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## nizar (12 May 2007)

Kimosabi said:


> Well looking at this charts, I can't see much difference between now and 1987, and if/when it does go pop, I wouldn't be surprised to see the AORD drop to between 3000 - 4000, sorry...




No need to be sorry.
Look at in %terms, to get a clearer picture


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## nizar (12 May 2007)

reece55 said:


> Kimosabi
> The comparison between 87 and now simply isn't there, if we were to use a percentage based comparison, the XAO would have to reach 12 K before it were as hot as 87.......
> 
> A 3 - 4k drop just isn't on the cards mate....... Yes, we need a pull back, but 3000 points just isn't going to happen IMO. If you want to review a bubble market, see China - now that market could definitely halve within a couple of days. But our market is far from excessively overvalued, we just need a slow down to the parabolic rise.
> ...




Top post bro.
Agree wholly, good to see someone on here knows what they are talking about.


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## reece55 (12 May 2007)

Kimosabi said:


> I'm sorry, but I can't help find this statement somewhat amusing.
> 
> I'm sure there were plenty of people in Japan who thought the NIKKEI could never go back down to 7600 from over 40,000, but it did....




Yeah, OK mate.......

Once again, you need to review the meteoric rise of the Nikkei compared with our rise - we are no where near the distance from our 200 MA that either this or the 1987 XAO was. The stats just don't add up mate, it's just simple maths....

If you wish to be a bear, at least use useful comparative analysis! 

The reality is regardless of your view, personally I trade markets with the trend - why, cause thats what pays. Fundamentally, you could continue to say the ASX is overvalued, but if you have been short at any since the last dip, you would have lost tons of money. Just my opinion though, so whatever floats your boat!

Cheers
Reece


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## nizar (12 May 2007)

Kimosabi said:


> I'm sorry, but I can't help find this statement somewhat amusing.
> 
> I'm sure there were plenty of people in Japan who thought the NIKKEI could never go back down to 7600 from over 40,000, but it did....




The Nikkei actually went up for about 30 years, appreciated 100-fold in that time, during a time when Japan was industrialising.

Pretty poor comparison considering:
1. Australia is not industrialising (yeh China is, but they have 1.3billion people as opposed to Japans 100mil, and China Shanghai index has only been going up for 16 years).
2. We have not appreciated 100-fold.
3. We have not been doing up for 30 years.

So yeh, pretty poor comparison...


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## reece55 (12 May 2007)

OK, last post for me on this topic......

Thought I would put this in perspective for everyone here, so we are all aware....

Attached is the absolute percentage increase for 3 years for the All Ords now and in the bubble in 87...

As you can clearly see, we are way off where we have been. So, whilst I would say that we are looking a little hot in the industrial valuation side, the market is well away from bubble status in my humble opinion.

Cheers
Reece


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## wavepicker (12 May 2007)

reece55 said:


> we are no where near the distance from our 200 MA that either this or the 1987 XAO was. The stats just don't add up mate, it's just simple maths....
> 
> Cheers
> Reece




Hi Reece,  I pondered the same question.  However there can be are various problems with measuring the deviation of price from the 200MA. These are as follows:

-Is the 200 MA the best span length to use for this filter?
-The MA has a lag component.
- What is the statistical component for the last 20 years or the standard  deviation of the percent change of the actual data from the trend line or MA??

If one was to do a study of these and the dominant cycles were established(correct span lengths)  on a daily, weekly, and monthly basis, as well as allowing for the lag in the MA, it may surprise many that prices may have actually reached levels that may spell out an imminant reversal may not be too far away. Now that is not say that prices cannot trend higher from here, but it does spell caution.  This is especially the case when prices have reached such deviations at 3 degrees of trend.

Food for thought.


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## reece55 (12 May 2007)

Hi Wavepicker
Very interesting you say this, because for the last little while I have been building analysis on the 200 MA in just this way for XOA, XJO and DJIA and S&P 500. There is a pretty consistent pattern here for the XJO, where once the index reaches above 2x the standard deviation from the 200 day MA, it's a warning sign. In fact, with reference to the XJO, as as soon as we reach about 15% above the 200 day MA for the last 4 years, we have a pull back to around about the 200 MA. The index gravitates to this level, in my experience. At the moment, we are now above 2x the standard deviation, but only ever so slightly. It also ties in with the wave counts that most are coming up with. My idea is to build a index trading system on this basis  -I will PM you when I am done if you are interested, still early days! 

Mind you, in saying the above, I believe that we could get to up to 3x the standard deviation for the index if 87 is anything to go by, but we will have to wait to see.

Cheers


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## drillinto (15 May 2007)

The party ain't over yet


China Bubble Talk: It's All Relative
Bespoke Investment Group(USA)
14 May 2007

With the Shanghai Stock Exchange Index eclipsing yet another millennial mark over the last week, it seems as though there has been a pickup in the number of articles calling China's stock market a bubble with out of control valuations.  

While we have already made the comparison of China's market now to the Nasdaq in the late 1990s, another comparison between the two indices shows that China's 'Bubble' may not be so large after all.  Comparing the current valuations of both markets shows that the trailing P/E ratio for the Shanghai Stock Exchange is 42.63 with a dividend yield of 0.5%.  The Nasdaq is not much cheaper. Its trailing P/E ratio is 38.32 with a dividend yield of 0.6%, and until late April, it had a higher P/E ratio. 

If we add in the growth rate of each market's underlying economy, we see that China has much faster growth, which justifies some sort of premium to the slow growing US economy.  According to the most recent data, China grew at an 11.1% rate, while growth in the US is a more paltry 2.1%.  While it is nearly impossible for someone to make the argument that China is cheap at current levels, the mere fact that is has gone up so much so fast is not in itself enough to warrant the 'Bubble' tag.


----------



## nizar (16 May 2007)

Well yesterday Shanghai down by 3.6% and no1 cared.
The way it should be i reckon.


----------



## constable (16 May 2007)

nizar said:


> Well yesterday Shanghai down by 3.6% and no1 cared.
> The way it should be i reckon.




Here Mr and Mrs Farken here!!


----------



## dhukka (16 May 2007)

Picked up this article over at http://marketclues.blogspot.com/



> *China Stock Bubble About to Burst
> 
> May 10th 2007
> *
> ...




If this doesn't sound like a bubble or at least one forming I don't know what does.


----------



## explod (16 May 2007)

drillinto said:


> The party ain't over yet
> 
> 
> China Bubble Talk: It's All Relative
> ...




In recent times the major part of China's growth has been internal industrialisation and to some degree manufactured exports.  The US growth on the other hand has been due in large part by cheap refinanced housing and since that sector fell off due to rising rates, the business generated by the war effort.   In addition some comentators are saying that the US growth numbers may be a bit rubbery and when this penny drops with the US dollar we will be running for our lives.

A text on the subject "Crash Proof: How to Profit From the Coming Economic Collapse"  Schiff, Peter D.  2007   Schiff and his Father before him are long time Wall Street stock brokers, ....well worth a read  IMHO


----------



## constable (16 May 2007)

All i can say on a practical level is that a billion people in china are not going to go away and their demand for goods and services and a western lifestyle will far surpass the short term outlook the doomsdayers are hoping for. India's the same story. Does anyone really think these billions of people are going to stop striving for a better living because someone 20000kms away thinks the us housing market is being devalued? I doubt it!
All the historical graph comparisons so far have shown share prices keeping up with earnings ( unless they havent been convienantly weighted!) and the only concern is the shanghai exchange which is asia's casino royale.
I think the pertinent question is why are some people looking for an excuse  for markets to fail. 
A. possibly because its in their self destructive nature.


----------



## explod (16 May 2007)

constable said:


> All i can say on a practical level is that a billion people in china are not going to go away and their demand for goods and services and a western lifestyle will far surpass the short term outlook the doomsdayers are hoping for. India's the same story. Does anyone really think these billions of people are going to stop striving for a better living because someone 20000kms away thinks the us housing market is being devalued? I doubt it!
> All the historical graph comparisons so far have shown share prices keeping up with earnings ( unless they havent been convienantly weighted!) and the only concern is the shanghai exchange which is asia's casino royale.
> I think the pertinent question is why are some people looking for an excuse  for markets to fail.
> A. possibly because its in their self destructive nature.




Exactly and what Schiff advises US investors to do is to invest directly in these new markets.   There will be a bad bump but with our resources we will ride things out fine


----------



## CanOz (16 May 2007)

constable said:


> All i can say on a practical level is that a billion people in china are not going to go away and their demand for goods and services and a western lifestyle will far surpass the short term outlook the doomsdayers are hoping for. India's the same story. Does anyone really think these billions of people are going to stop striving for a better living because someone 20000kms away thinks the us housing market is being devalued? I doubt it!
> All the historical graph comparisons so far have shown share prices keeping up with earnings ( unless they havent been convienantly weighted!) and the only concern is the shanghai exchange which is asia's casino royale.
> I think the pertinent question is why are some people looking for an excuse  for markets to fail.
> A. possibly because its in their self destructive nature.




Pull up a list of the 21 indexes around the world. Now pull up each chart.

What do you see? Nearly everyone i have is at the same point, and most are rolling over in overbought territory. I think nearly 2/3s have just crossed over on the thier MACD...not that that means everything. I'd say 1/3 are at D.Day time, against support. Interesting times for sure, all these indexes moving together.

This week will tell whether or not we can continue up for another leg, or we take the hit and go lower before...who knows what. 

Why do we care? Because some of us like to be prepared, to know that we were right being cautious, and that our signals we correct.

Irregardless of the BRIC economies continuing growth, business cycles ebb and flow, and we're due for an ebb! Some say over due. Only due to the excess liquidity are we even extending this overbought situation.

Cheers,


----------



## nizar (16 May 2007)

constable said:


> Here Mr and Mrs Farken here!!




Huh


----------



## Uncle Festivus (17 May 2007)

constable said:


> All i can say on a practical level is that a billion people in china are not going to go away and their demand for goods and services and a western lifestyle will far surpass the short term outlook the doomsdayers are hoping for. India's the same story. Does anyone really think these billions of people are going to stop striving for a better living because someone 20000kms away thinks the us housing market is being devalued? I doubt it!
> All the historical graph comparisons so far have shown share prices keeping up with earnings ( unless they havent been convienantly weighted!) and the only concern is the shanghai exchange which is asia's casino royale.
> I think the pertinent question is why are some people looking for an excuse for markets to fail.
> A. possibly because its in their self destructive nature.




I don't think anyones hoping for a crash but the facts are there & it doesn't look good. Self destructive nature? Maybe from the other perspective it is to be blissfully ignorant of the facts at your peril.
As for a billion Chinese or Indians all buying widgets - if the average wage is about $5k, and the word is that a sizable proportion of the population is 'investing' all they have in the stockmarket, firstly, what's left for consuming other goods and secondly what happens if there is a bigger correction to that last March?.
A billion Chinese who have just lost all their savings won't be buying much for a while, and be doubly wary about investing in the stock market again.
It remains to be seen if it eventuates, but if it does then be prepared, that's all.


----------



## noirua (17 May 2007)

The Chinese Government will try relaxing laws to allow investment in foreign companies; The move up by the Hong Kong market has signalled this.

Many small Chinese stocks and others in Asia, including some Aussie stocks, will and may have become the equivalent of dotcom gambles that will collapse near to zero. WHEN? All that matters is that you are out of the sector before it does collapse and of course, no one knows when, it's all a guess.


----------



## Temjin (17 May 2007)

Uncle Festivus said:


> It remains to be seen if it eventuates, but if it does then be prepared, that's all.




Pretty summed up what everyone investors should do.

Understand the big pictures out there and be prepared for it. 

My biggest concern remains that when retail investors like street shoe cleaning boys, borrow money to invest in the stock market, then it's a huge warning sign that the market is no longer "sane". 

Remember the recent rapid rise in the Chinese share market is largely driven by credits from people borrowing through their mortgage. There will eventually be a limit on how much more they can borrow and invest at this rate. 

Those who believe the chinese market will continue to rise AT THIS RATE because of whatever "fundamental" reasons are totally blinded by the facts and by their own greed and other personal biases.


----------



## wayneL (17 May 2007)

FWIW an article from the Daily reckoning:

http://www.dailyreckoning.com.au/chinese-stock-market-2/2007/05/17/



> *Chinese Stock Market Showing “Characteristics of a Powerful Mania”*
> Posted by Dan Denning on May 17th, 2007
> 
> Investors in the Chinese stock market have clearly taken leave of their senses. So have concert goers. We read this morning that pop-diva Christina Aguilera has added the city to her concert tour. Yan Wang, Chief investment strategist at BCA Research, puts it this way, “The parabolic price moves, expensive valuation and mass speculation in the Chinese stock market have taken on all the characteristics of a powerful mania and a building speculative bubble.”
> ...


----------



## Temjin (18 May 2007)

Excellent article there, this is the best part.



> But once the animal spirits are unleashed, they are nearly impossible to control.




Especially when THESE animals are BORROWING to their MAX, making them even insane when things turn really bad.


----------



## Bazmate (18 May 2007)

I wonder if Sydney is preparing an offer to host the '08 Olympics, ala Greece, just in case China turns to custard and can't make the party?? 

Could it really come to that??


----------



## disarray (18 May 2007)

i don't think so. with an endless supply of cheap labour to throw at a problem you can achieve anything. like the pyramids. i think the thread title needs to be a bit more dramatic though. bears just love their drama.


----------



## >Apocalypto< (18 May 2007)

*This is the most stupid thread I have ever seen.*

Unless you have been to china and seen the country in action I think none of you have any idea to how it works, i have been there twice and do business there i still have no idea, so are you all china experts.

1. chinese stock market is independent of the economy, its still government controlled!

2. Bank of China will never let any kind 87 Crash last more then 1-2 days TOPS! they poor money in to stop the sell off's and they have so much right now they could stop anything.

3. Sell off in Feb was bound to happen with or with out china sell off which could have been government induced to whip out the speculators! noticed it stopped the next day! our market at that time had risen from Sep with out any real hitch also DOW rose from JUL it was a excuse to get out!

China will not cause a bear market, no we will use any excuse as a reason to sell off from fear to protect 4 years of gains!

Remember markets are made of people, people look for any reason to justify there actions! China does not push the sell button in panic for u, you do.


----------



## Mousie (18 May 2007)

Trade_It said:


> *This is the most stupid thread I have ever seen.*
> 
> Unless you have been to china and seen the country in action I think none of you have any idea to how it works, i have been there twice and do business there i still have no idea, so are you all china experts.
> 
> ...




Agreed re the overall moral of your post. But if the BOC pour in money to stop crashes (read: to fund the irresponsibility of its citizens' borrowing) there'll be hell to pay for Chinese MNCs when it comes to negotiating contracts with overseas partners.

Devaluation of RMB leads to inflationary pressures on it, what follows is basic economics really.


----------



## >Apocalypto< (18 May 2007)

Mousie said:


> Agreed re the overall moral of your post. But if the BOC pour in money to stop crashes (read: to fund the irresponsibility of its citizens' borrowing) there'll be hell to pay for Chinese MNCs when it comes to negotiating contracts with overseas partners.
> 
> Devaluation of RMB leads to inflationary pressures on it, what follows is basic economics really.




No arguments from me.

People just have to understand china is not the be all and end all of the world the USA is still in that chair.

China is very well aware of its current situation and there citerzins borrowing rates.

You have to understand the Chinese government is very switched on and runs a tight ship they will take action when it is needed. they are not backward farmers they are very smart people.

LOL but as i say that ileagal power stations are built all over the country with out central government approval major one found in inner mongolia!

I am over bored financial reporters digging up whateva crap they can on china just to sell some magazines and news papers based around fear.

the Chinese economy has been growing at 8-10% since the seventies, believe it or not! I read that in china the other week, shocked me a bit.

I am not one to believe in western hype.



> But if the BOC pour in money to stop crashes




They have and they still do.

97 asian crash BOC stepped in there as well.

last FEb BOC not only stepped in but may have also started the sell off.


----------



## bean (18 May 2007)

US will lead and China will follow

Just another article for interest

www.financialsense.com/fsu/editorials/andros/2007/0517.htmlhttp://www.financialsense.com/fsu/editorials/andros/2007/0517.html


----------



## Mousie (18 May 2007)

Trade_It said:


> They have and they still do.
> 
> 97 asian crash BOC stepped in there as well.
> 
> last FEb BOC not only stepped in but may have also started the sell off.




Oh yeah? Any evidence that BOC stepped in last Feb, and 97'?

Boy am I gonna look forward to this crash on the dragonic scale...


----------



## Uncle Festivus (18 May 2007)

BEIJING (XFN-ASIA) - Participants in the Qualified Foreign Institutional Investor program are reducing their holdings and shifting to more reasonably-valued Chinese stocks in other markets on fears that mainland stocks have run up too rapidly, the official Xinhua news agency reported, citing data from Emerging Portfolio Fund Research.
      By the second week of May, QFIIs had withdrawn 574 mln usd from the markets, Xinhua reported.
  Their holdings fell to 2.525 bln shares in 243 listed companies in the first quarter, down 11 pct from 2.848 bln in the previous quarter.
      'The once much sought-after QFII quotas are becoming superfluous,' Xinhua quoted CLSA analyst William Liu as saying.
      Liu said the market is reaching a ceiling and could see a decline of 20-25 pct.


----------



## Temjin (20 May 2007)

bean said:


> US will lead and China will follow
> 
> Just another article for interest
> 
> www.financialsense.com/fsu/editorials/andros/2007/0517.htmlhttp://www.financialsense.com/fsu/editorials/andros/2007/0517.html




Excellent article too bean, thanks for it.



			
				Trade_It said:
			
		

> This is the most stupid thread I have ever seen.
> 
> Unless you have been to china and seen the country in action I think none of you have any idea to how it works, i have been there twice and do business there i still have no idea, so are you all china experts.
> 
> ...




I am afraid YOU are the one who DO NOT KNOW how the Chinese market works at all. Have you EVER been and through a market crash? Look at the tons of insight from independant experts out there. The evidences are so obvious.

To think the Chinese government have the slightest ability to resolve their current crisis is absolutely stupid. 

After reading the article above, I have to full 100% agree with the author's insight. I am a Chinese myself and the way he describe the way of business in China and the culture is 110% true. 

It's human nature to "get ahead", it's Chinese culture to "get rich", and when creating wealth through creating new businesses are severely restricted by "selected members" by satisfying corrupted officals, the only way to acquire wealth legimately is to INVEST. 

Again like I said, those who hold a large portion of their portfolio in Australian stocks should seriously think about their position now and should start thinking of strategies to minimise the impact of the possible chinese bubble market crash.


----------



## Kimosabi (20 May 2007)

Temjin said:


> Again like I said, those who hold a large portion of their portfolio in Australian stocks should seriously think about their position now and should start thinking of strategies to minimise the impact of the possible chinese bubble market crash.




I thinks it's going to be a combined American/Chinese Crash and they will probably feed on each other going down.

I'm sorry people, but I think we are hopping on the edge of the abyss...


----------



## Uncle Festivus (20 May 2007)

> The central bank also lifted the bank reserve requirement ratio by a half percentage point, and it also increased its benchmark one-year lending rate by 0.18 of a percentage point, to 6.57%, and the one-year deposit rate by 0.27 of a percentage point, to 3.06%.






> Goldman Sachs warned last week that China's booming A-share market could turn into a bubble if speculation among exuberant domestic retail investors is not curbed. Other financial firms, including UBS Securities, as well as Governor Zhou Xiaochuan of the People's Bank of China have also expressed concern in recent days about the possibility of a bubble forming in the stock market.
> "The recent rise in interest rates will not be enough to dampen speculation in the Chinese equity markets," Moody's Li said. "The overvalued stock market remains a problem as the current boom is unsustainable."



...


----------



## nizar (20 May 2007)

Temjin said:


> Again like I said, those who hold a large portion of their portfolio in Australian stocks should seriously think about their position now and should start thinking of strategies to minimise the impact of the possible chinese bubble market crash.




Do you have any evidence that our market follows the Chinese markets?
Or even the US?
Or that any of world financial markets follow China?

One day last week the SHanghai index fell 3.6% and nobody cared.


----------



## CanOz (20 May 2007)

nizar said:


> Do you have any evidence that our market follows the Chinese markets?
> Or even the US?
> Or that any of world financial markets follow China?
> 
> One day last week the SHanghai index fell 3.6% and nobody cared.




I tend to agree with Nizar in that a fall in the SSE is not going to trigger panic on its own, unless its a more than a one day 3-4% loss. Australian investors won't be too worried unless the panic spreads to other Asian markets, and then Europe, and then the US. 

All of the major global indices are at or near thier historical highs.

The next few weeks will tell us whether they continue through resistance, consolidate above, or fail.

Certainly exciting times, history in the making here folks.

Cheers,


----------



## nizar (20 May 2007)

CanOz said:


> I tend to agree with Nizar in that a fall in the SSE is not going to trigger panic on its own, unless its a more than a one day 3-4% loss. Australian investors won't be too worried unless the panic spreads to other Asian markets, and then Europe, and then the US.
> 
> All of the major global indices are at or near thier historical highs.
> 
> ...




Can,

Are you in the markets or (still!!) watching from the sidelines?


----------



## CanOz (20 May 2007)

nizar said:


> Can,
> 
> Are you in the markets or (still!!) watching from the sidelines?




-30% Aust. stocks
-30% in CFD account with 2 soft commodity bets on, the rest is waiting for shorting opps.
-30% cash

You?

Also, Nizar..its is ok if i PM you later in regards to system development ideas?

Cheers,


----------



## nizar (20 May 2007)

CanOz said:


> Also, Nizar..its is ok if i PM you later in regards to system development ideas?
> 
> Cheers,




Yeah feel free.
Im actually going to start a thread on this very soon.


----------



## Temjin (20 May 2007)

nizar said:


> Do you have any evidence that our market follows the Chinese markets?
> Or even the US?
> Or that any of world financial markets follow China?
> 
> One day last week the SHanghai index fell 3.6% and nobody cared.




Well, the Feb correction was one. I really don't know why there were correlations between the global markets, but it seem the human panic does spread really quick and wide. 

Because of that, I just can't ignore the possibility that if the Chinese stock market go under, the Australia market MAY be affected as well. It's all part of the big picture thinking that Dr Van Tharp encourages other to be aware of.


----------



## >Apocalypto< (22 May 2007)

Temjin said:


> Excellent article too bean, thanks for it.
> 
> 
> 
> ...




Nizar is so right no one said boo the other day when Shanghia dropped read my first post, *CHINA WAS A EXCUSE FOR THE US TO CORRECT* after a 8 month trend!

one thing for you to do, with all your other bear buddy's, if your you're so scared stop trading and investing buy some property and stay the hell off the forums, i am sick to death of all you wanna be top calling doomsdayers!


----------



## CanOz (22 May 2007)

Trade_It said:


> one thing for you to do, with all your other bear buddy's, if your you're so scared stop trading and investing buy some property and stay the hell off the forums, i am sick to death of all you wanna be top calling doomsdayers!




Good grief TI, you having a bad day? 

Cheers,


----------



## >Apocalypto< (22 May 2007)

CanOz said:


> Good grief TI, you having a bad day?
> 
> Cheers,





Not at all Can,

300 hundred from a 5 min day trade just had yum cha for lunch. things are great.

just getting way over all the negative sheep in this forum, who all claim we will have a crash with nothing but the opinion of some expert.

who knows what motive they have for being bearish at this point, cause a sell off buy back in when its cheaper.

i dont see any charts no proof.

all wild guesses, china has never been in this position before in there history so who is any one to say it will crash until the day it does correct.

maybe i am being totally unreasonable but I am so over all the crash callers.


----------



## CanOz (22 May 2007)

Trade_It said:


> Not at all Can,
> 
> 300 hundred from a 5 min day trade just had yum cha for lunch. things are great.
> 
> .




LOL! Things just don't get any better!

Cheers,


----------



## >Apocalypto< (22 May 2007)

CanOz said:


> LOL! Things just don't get any better!
> 
> Cheers,




tell me about it!


----------



## nizar (22 May 2007)

Temjin said:


> Well, the Feb correction was one. I really don't know why there were correlations between the global markets, but it seem the human panic does spread really quick and wide.
> 
> Because of that, I just can't ignore the possibility that if the Chinese stock market go under, the Australia market MAY be affected as well. It's all part of the big picture thinking that Dr Van Tharp encourages other to be aware of.




The Feb correction caused by China???
Umm well thats the spin the media put on it.
Its clearly the US market correction that sparked the rest of Asia and us also to correct.

Its important to remember that prior to this we had been going UP since September from 4900 to 6000 for XAO thats 22% in less than 6 months.

Also DOW going spastic since about July 06.

So we and the Yanks were looking for any reason to take profits off the table (its easy to sell when your in profit).

Now what caused the US correction whether it was China tanking OR Greenspans comments of 50/50 recession on that very night, OR subprime worries, is anybodys guess.

And whether one event without the other(s) wouldve caused the same reaction we'll never know.

But what i do know is that i think it was Wednesday last week the Shanghai bourse fell by 3.6% and nobody else cared. Initially the rest of Asia was down, thinking it may have an effect on the US markets the way that February 27th did. It didnt. The US closed up that day.


----------



## >Apocalypto< (22 May 2007)

nizar said:


> The Feb correction caused by China???
> Umm well thats the spin the media put on it.
> Its clearly the US market correction that sparked the rest of Asia and us also to correct.
> 
> ...




Nizar thank you for bringing some sense into this thread thank you very much. hats off to you buddy.

Temjin and other doomsdayers, have a really good read of that post, maybe read it twice!


----------



## disarray (22 May 2007)

just got this from air daily, entitled "Relax, China isn't going to crash"

http://www.aireview.com.au/index.php?act=view&catid=8&id=5962&setSub=1

can't copy / paste unfortunately. upshot of the article is -

inflation is low at 1%
current account is in surplus
not reliant on foreign capital inflow
currency is not overvalued
world largest foreign reserves


----------



## CanOz (22 May 2007)

nizar said:


> The Feb correction caused by China???
> Umm well thats the spin the media put on it.
> Its clearly the US market correction that sparked the rest of Asia and us also to correct.
> 
> ...




The afternoon that the SSE started its big slide on Feb 26th, the ASX slide as did all other Asian markets. The US Markets slide down that night. This is a fact.

That world markets pay no attention to what the SSE does now should be no surprise as it only turned out to be a buying opportunity last time. 

Cheers,


----------



## nizar (22 May 2007)

CanOz said:


> The afternoon that the SSE started its big slide on Feb 26th, the ASX slide as did all other Asian markets. The US Markets slide down that night. This is a fact.
> 
> That world markets pay no attention to what the SSE does now should be no surprise as it only turned out to be a buying opportunity last time.
> 
> Cheers,




Brother read my post again.
I know asia followed China (just like last wednesday).

The US did slide down i not arguing that. Its a fact.
But the cause?
Media says China.
Also on that night Greenspan said comments about 50/50 chance of recession. It could well be this that moved the US markets.

ButIf it was solely China that moved the Yanks then how come not the same effect on last wednesday??


----------



## CanOz (22 May 2007)

nizar said:


> Brother read my post again.
> I know asia followed China (just like last wednesday).
> 
> The US did slide down i not arguing that. Its a fact.
> ...




Ahhh, ok. Point taken Nizar.

I agree that it wouldn't have taken much to cause a little panic back then...my point was exactly that, and now its going to take more than China to cause a panic to stop this bull. 

Cheers,


----------



## Mousie (22 May 2007)

Trade_It said:


> *This is the most stupid thread I have ever seen.*






Trade_It said:


> Nizar is so right no one said boo the other day when Shanghia dropped read my first post, *CHINA WAS A EXCUSE FOR THE US TO CORRECT* after a 8 month trend!
> 
> one thing for you to do, with all your other bear buddy's, if your you're so scared stop trading and investing buy some property and stay the hell off the forums, i am sick to death of all you wanna be top calling doomsdayers!




Trade It,

It's one thing to disagree with others' views, but it's entirely another to resort to personal attacks.

MHO is it's time for *YOU* to "stay the hell off the forums" if you're gonna use such tactics. Nizar disagrees but he doesn't offend me in the least.


----------



## >Apocalypto< (22 May 2007)

Mousie said:


> Trade It,
> 
> It's one thing to disagree with others' views, but it's entirely another to resort to personal attacks.
> 
> MHO is it's time for *YOU* to "stay the hell off the forums" if you're gonna use such tactics. Nizar disagrees but he doesn't offend me in the least.





Mousie

point taken i did go a little over the top but when u read sour puss posts non stop with no evidence apart from some article. then it makes you wonder.

and believe me if it continues to be full of dribble about crashes with no proof then i will get the hell out of the forums.


----------



## Kimosabi (22 May 2007)

Well, while you guys are having your e-lovers tiff, there are some important things going on between the USA and China at the moment that could potentially have a negative effect on Australia's economy in the future...



> *US looks set for trade war with Chinese*
> Rowan Callick, China correspondent
> [FONT=Arial,Helvetica,Sans-Serif]22may07[/FONT]
> [FONT=Arial,Helvetica,Sans-Serif]TALKS between half the US and Chinese cabinets starting today in Washington look unlikely to head off US legislation that would trigger a trade war with China.[/FONT]
> ...


----------



## Uncle Festivus (22 May 2007)

Kimosabi said:


> Well, while you guys are having your e-lovers tiff, there are some important things going on between the USA and China at the moment that could potentially have a negative effect on Australia's economy in the future...




A trade war. Utter lunacy but a totally plausible reaction by numb scull politicians clasping at straws. Don't they realize that if China is 'forced' to revalue it's currency then the only people it's going to disadvantage is US consumers by driving up import prices.

Good one!


----------



## nizar (22 May 2007)

Visit http://www.aireview.com.au/index.php?act=v...catid=8&id=5962

Relax, China Isn’t Going To Crash
May 22 2007 - Australasian Investment Review – (AIR)

So far this year the Chinese economy and share market have continued to roar ahead.

The Chinese authorities are keen to cool both and this was evident in the latest moves to increase both interest rates and the banks’ required reserve ratios and to widen the daily trading band for the Renminbi.

Some commentators fret that the economy is a bubble, that the share market is a bubble and when it unravels it will be disastrous for the rest of world, including Australia.

The AMP Society's Dr Shane Oliver says there will be few problems with China. Here’s his argument:

He says that as long as he has been analysing China various commentators have been wringing their hands about the sustainability of its strong growth rate.

Many seem prone to see the bright lights of Shanghai and the rapid development all over the country as proof that China is the next Asian crisis. And yet, despite these regular predictions of doom, China’s economy continues to zoom along.

Our view is that China is being propelled by very strong structural forces.

These include strong productivity growth, huge competitive advantages, rapid urbanisation, surging consumer demand and very strong investment.

These in turn are underpinning solid gains from Chinese shares.

With per capita income levels in China still way below rich country levels China’s rapid growth phase has a long way to go, probably several decades.

While recent economic growth remains remarkably strong, eg real GDP up 11.1% over the year to the March quarter, the economy is no closer to being in an unsustainable bubble than ever.

The normal signs of impending trouble in emerging markets are simply not present in China’s case:

Inflation is low, at just 1% year on year excluding food. Since the mid 1990s there has been a dramatic improvement in the growth/inflation trade-off in China, partly reflecting greater reliance on capacity enhancing investment to drive growth.

• The current account is in surplus – as opposed to the huge deficits that preceded trouble in the Asian crisis.

• China is not reliant on foreign capital inflow. In fact, the rest of the world is reliant on Chinese capital outflow!

• Foreign exchange reserves are the world’s largest.

• Unlike the Asian crisis countries the Chinese Renminbi is undervalued, not overvalued.

Furthermore, after efforts over the last few years to re-balance the economy investment is running below previous peaks, it has shifted from the eastern areas to the central and western areas & consumer spending has strengthened all of which is consistent with government policy.

Sure China faces environmental problems and political risks and its managed exchange rate makes it hard to control liquidity but these problems aren’t enough to derail its strong growth prospects.

While the latest tightening measures will act to slow growth they won’t crunch it:

• The base lending rate at 6.57% (up from 6.39%) is well below nominal GDP growth of around 13%, so monetary conditions are still not tight;

• The banks’ required reserve ratio (i.e., the amount of deposits they must retain in reserves) at 11.5% is well below actual reserves of around 13%; and

• The widening of the permissible Renminbi daily trading band against the $US from 0.3% to 0.5% may signal a faster appreciation against the $US, but it’s unlikely to be a dramatic change as the previous band already allowed for a monthly appreciation of 6.8% and yet the Renminbi rarely moved by the maximum permitted and is up only 7.9% since the July 2005 move from a fixed exchange rate.

The timing looks partly designed to lead to smoother talks between China and the US this week.


Just as the gradual appreciation of the currency since 2005 has not had much impact on Chinese export growth (which has been averaging 25 to 30%) it’s unlikely a slightly faster pace of appreciation will have much impact either as China’s cost advantage is huge.

More fundamentally, the trade imbalance between China and the US reflects excess savings in China and excess spending in the US and exchange rate changes won’t fix that.

So, while it’s clear the Chinese authorities want to slow the economy down a bit, they have no need to crunch it and recent policy measures won’t have a major impact.

We are of the view that the Chinese economy is on track for growth of around 9 to 10% over the year ahead.

The structural forces propelling the Chinese economy make it a bit like a car going down a hill. But it is not out of control and the authorities are simply tapping the brakes to make sure this remains the case.

With growth likely to remain strong it’s quite likely we will see further tightening, but it’s hard to see the brakes being slammed on because there is no need.

The Chinese share market is a concern to many, so what is really happening?

So far this year Shanghai A shares are up 50% (after a 130% gain last year) and the Citic/S&P index of the 300 largest companies listed in Shanghai and Shenzen is up 85%.

Individual interest in share investing in China has become huge with 250,000 new share accounts being opened each day compared to a daily average of just 3000 earlier last year.

This rate of increase is clearly unsustainable and many are fretting about a bubble but several points are worth noting.

• Firstly, much of the rebound in Chinese shares since 2005 reflects a recovery from a four-year bear market, during which individual Chinese investors lost confidence in shares and allocated most of their assets to bank deposits.

• Secondly, profit growth for listed Chinese companies over the last year has been a very strong 78%.

• Thirdly, while the price earnings ratio for Chinese A shares of around 40 times is high by our standards it is only just above its 10 year average of 36 times and is well below its previous high of 60 times.

The PE on Chinese shares is also way below the peak levels reached during previous share market bubbles, eg, the Japanese Nikkei index peaked on a PE of 70 times in 1989 and the tech heavy Nasdaq reached a PE of 160 in 2000.

• Finally, Chinese investors still have a very low proportion of their financial wealth invested in shares, around 25% compared to over 50% in Australia and 40% in the rest of Asia. Bank deposits on 3% or so interest account for 65% of financial wealth.

So the long term potential for a higher allocation to shares is high.

Quite clearly the recent rate of appreciation in Chinese shares is unsustainable, and the authorities are keen to cool it down.

This may involve jawboning & administrative measures, like we saw in late February. As such, volatility is likely to be high with corrections inevitable, but the longer term outlook remains strong.

While some worry that a sharp fall in Chinese shares would have a major impact on the Chinese economy this seems unlikely.

While strong long term growth in China helps underpin the Chinese share market over the long term, over the last decade the Chinese economy and share market have moved in different directions.

While shares moved up in the second half of the 1990s the economy slowed, and the reverse occurred from 2001 to 2005.

The relationship between the share market and the economy is far looser than in developed countries because the equity market still only accounts for 10% of financing in China and the share of equities in household financial wealth is very low at 25%.

And given the highly speculative nature of short term moves in Chinese shares a short term swing in either direction is unlikely to tell us anything about the Chinese economy, which for reasons we have already indicated is likely to remain strong.

For these reasons if there were to be another sharp correction in Chinese shares like that in late February; there may be a knee jerk reaction in major global share markets, including Australia’s.

However, since it is unlikely to signal problems in the Chinese economy any impact is unlikely to be sustained.

Copyright Australasian Investment Review.
AIR publishes a weekly magazine. Subscriptions are free at www.aireview.com.au


----------



## Temjin (23 May 2007)

Interesting article there as well, does give me another perspective on the whole issue. 



			
				Trade_it said:
			
		

> point taken i did go a little over the top but when u read sour puss posts non stop with no evidence apart from some article. then it makes you wonder.




Trade_It, I don't think you even bothered consider the concerns/points raised by all the articles posted here or those out there that claim the possibility of a Chinese market crash. 

No evidence apart from some article? Perhaps I can say the same for that particular article too. Where did they get all those numbers from? From what sources? How do you claim the creditability of that article? How can you prove that those numbers will GUARANTEE the Chinese share market is NOT FORMING a bubble and WILL NOT CRASH? Obviously, you can.

And obviously again, I can't as well for those articles claiming the crash. 

Your problem is you have one of the many psychology biases that Dr Van Tharp claim it hinders one's ability to trade successfully. (yes, it's not related to this argument, but still) It means one tend to filter information that DOES NOT conform to his/her own perception of reality, and only take in and accept information that he/she believes to be correct in their own mind. 

I'm taking from both sides argument but will continue to remain skeptical about the long term outlook on the chinese share market. No one can GUARANTEE that it wouldn't crash simply because it's fundamental is strong, it's PE ratio is still way less than previous historic crashs, or that only 25% of finanical wealth is in the market right now compared to 40-50% elsewhere, etc, etc. Obviously, these are strong evidences that the market may continue to steam ahead more longer, but there are also strong evidences/signs that hint the market is in the bubble stage. 

I simply wouldn't ignore both side of the evidences and you shouldn't either. 

My only PERSONALLY major concern would still be in the inevitable corrections that will occur and how it will affect the Australia stock market in the short term.

If one has allocate 100% of his portfolio in Aussie stocks and on margin lending, and TOTALLY IGNORE the impact of ANY Chinese market corrections or "possible" crash, then he/she is taking unnecessary risk right now by ignoring the big picture.  

I call it risk management, and I'm not trying to be a doomsayer.


----------



## >Apocalypto< (23 May 2007)

Temjin,

This is over and done with and I have much better things to do with my time then waste it on you.

Good trading to you buddy.


----------



## Temjin (23 May 2007)

Trade_It said:


> Temjin,
> 
> This is over and done with and I have much better things to do with my time then waste it on you.
> 
> Good trading to you buddy.




Message taken, same to you then. Good luck.


----------



## krisbarry (23 May 2007)

Stop fighting girls, now which one of you stole the lip stick, or the boyfriend 

Sensetive Sally's


----------



## >Apocalypto< (23 May 2007)

Stop_the_clock said:


> Stop fighting girls, now which one of you stole the lip stick, or the boyfriend
> 
> Sensetive Sally's




LOL

I must admit I took the lip stick!


----------



## wayneL (24 May 2007)

Lots of cognitive biases in here. (It's my term du jour )

Anyway FWIW another stoopid article (Sorry TI, it's a *discussion* forum, a mix of different ideas and views  )

http://www.marketwatch.com/news/sto...x?guid={A504D285-9482-431B-BFDE-672C484030AF}



> TODD HARRISON
> Chinese food for thought
> Commentary: Pay attention: The smart money in Asia is raising red flags
> By Todd Harrison
> ...


----------



## wayneL (24 May 2007)

Greedscam gets in on the "China bubble to implode and spray all and sundry with poverty and misery" story.

http://www.marketwatch.com/news/sto...x?guid={22D96BFB-60A8-4D10-89E5-ED2E60D5175F}



> *Greenspan warns of big fall in Chinese stocks*
> By Polya Lesova
> Last Update: 2:52 PM ET May 23, 2007
> 
> NEW YORK (MarketWatch) -- Former U.S. Federal Reserve Chairman Alan Greenspan warned Wednesday that there's going to be a "dramatic contraction" in Chinese equities and that the current surge on the Chinese stock market is unsustainable, according to media reports. In recent weeks, a number of financial firms, including Goldman Sachs, as well as Governor Zhou Xiaochuan of the People's Bank of China have expressed concern about the possibility of a bubble forming in the Chinese stock market. The Shanghai Composite Index, which tracks shares listed on the larger of China's two stock exchanges, has gained 56% year-to-date. End of Story




The bastid cost me a few bucks though! Ah WTF! It was worth it to see the Wall street crap itself for a millisecond.  Bahahahahahaha!


----------



## Temjin (24 May 2007)

wayneL said:


> Lots of cognitive biases in here. (It's my term du jour )




Ah yeah, that's the word for it. 

You know, I have been talking to my cousins in Hong Kong and plus read a few online posts from Chinese investors either directly or indirectly involved in the Chinese share market. My observation is that they tend to "DENY" the possibility of the bubble and/or the crash and they will tend to provide evidences which support their view and ignore others which counter them. 

Hell, even one gave a reason that all these doomsday talk is the imperialist Amercians being jealous of the Chinese accomplisment thus far and making "bad omens" to their investments. 

As a Chinese myself, I tend to believe that because we traditionally or culturally tend to ignore the negatives (i.e. If you claim someone else COULD die because of this or that, they will immediately attack you are being too negative and it's bad omen to say SUCH a thing, and you shouldn't be thinking or talking like this, etc, etc) Happens so much when I talk to my older chinese cousins and parents.  

I think that's why the chinese people are more "irrational" than others might think, and also being more superstitious and optimistic about the future.


----------



## CanOz (24 May 2007)

Temjin said:


> Ah yeah, that's the word for it.
> 
> You know, I have been talking to my cousins in Hong Kong and plus read a few online posts from Chinese investors either directly or indirectly involved in the Chinese share market. My observation is that they tend to "DENY" the possibility of the bubble and/or the crash and they will tend to provide evidences which support their view and ignore others which counter them.
> 
> ...




The SSE opened up, still trying to get the latest....looks like its off a little over 1% so far.

Can someone check this for me...the Inet here is so crappy i can't even the load the bloody page! 

Cheers,

http://www.sse.com.cn/sseportal/en_us/ps/home.shtml


----------



## Kauri (24 May 2007)

CanOz said:


> The SSE opened up, still trying to get the latest....looks like its off a little over 1% so far.
> 
> Can someone check this for me...the Inet here is so crappy i can't even the load the bloody page!
> 
> ...




Latest..


----------



## KIWIKARLOS (24 May 2007)

Shanghai Composite 4,139.873 10:45PM ET  33.836 (0.81%) Chart, More 
^HSI Hang Seng 20,798.97 5:59AM ET  44.95 (0.22%) Components, Chart, More 
^BSESN BSE 30 14,363.26 6:28AM ET 0.00 (0.00%) Chart, More 
^JKSE Jakarta Composite 2,084.4641 11:15PM ET  19.782 (0.94%) Components, Chart, More 
^KLSE KLSE Composite 1,354.98 5:02AM ET  12.53 (0.92%) Components, Chart, More 
^N225 Nikkei 225 17,686.35 10:30PM ET  18.77 (0.11%) Chart, More 

ALL DOWN

I hate it when greenspan talks

Not to horendous yet, hopefully everyone will forget about it tommorow.
ASX a sea of red today im lucky the only three im holding are even or up


----------



## KIWIKARLOS (24 May 2007)

Europe is the opposite everything up the Dax over 1%


----------



## Kauri (24 May 2007)

KIWIKARLOS said:


> Europe is the opposite everything up the Dax over 1%




 The DAX will probably come down tonight...  
  They might have already closed when Green Peas 'n Ham set off his sneaky dirty bomb last night??


----------



## hangseng (24 May 2007)

Kauri said:


> The DAX will probably come down tonight...
> They might have already closed when Green Peas 'n Ham set off his sneaky dirty bomb last night??




US will go up tonight. Greenspan is very clever indeed, watch the money flow from China and back into the US markets. His plan all along, he speaks the markets listen. Arguably far too much power for one person to yield.

This is not a meltdown, so make wise decisions.


----------



## KIWIKARLOS (24 May 2007)

yeah i dont think china will end the day down more than 1% i reakon about 0.5-0.7 %

If greenies predictions come true what exactly will happen.

1. Chinas massive correction: Millions of chinese lose their savings and that has little flow on effect because the major consumers are America and europe anyway? Perhapes china pumps cash in from reserves to lessen the load. How could this effect chinas development, from what i understand its growth isn't fuelled by consumption but rather industrial growth which may take a hit but surely other countries would see a big decrease in the market as a opportunity to buy?

2. World asset prices decrease:  Does this mean everyones house price decreases along with company values etc so a house you bought yesterday for 200 K is now worth 150K, basically everything drops?


----------



## purple (24 May 2007)

Temjin said:


> I think that's why the chinese people are more "irrational" than others might think, and also being more superstitious and optimistic about the future.




hmm...maybe. they had a 5 year bear market just before the magnificent 06 run. so they were being highly irrational and avoiding the market for all they're worth.

over here in the Arab markets, it's been a 1 1/2 year bear market. but the Gulf economies have been powering upwards strongly. it's the herd mentality, which is a very strong societal hegemony.


----------



## Kauri (24 May 2007)

Paulson and Wu Yi meet over trade issues between China and U.S. Despite the smiles and never-ending handshake after the meetings nothing to help the struggling $US and hence trade deficit has been achieved. Hardly has the last press photo been taken that the US, realising that it no longer has the financial or military clout to influence China, trundle out "_at arms length_" Green Peas 'n Ham to show the Chinese that with a few mild words they can still potentially influence China's economy.... implying that with stronger wording, if needed, etc......
 No not really, it was just one of those politically advantageous co-incidences that seem to happen all too frequently.....
 Business as usual after the US long weekend??


----------



## Kimosabi (28 May 2007)

Uncle Festivus said:


> Another exponential chart - too scary for words  .
> 
> *NEW YORK (MarketWatch) -- China's booming A-share market could turn into a bubble if speculation among exuberant domestic retail investors is not curbed, Goldman Sachs warned Thursday, as the Shanghai Composite Index hit yet another intraday record high. *
> "Market trading statistics, liquidity indicators, and anecdotal evidence all point to optimistic, if not exuberant, sentiment in the domestic market," said Thomas Deng, analyst at Goldman Sachs, in a Thursday research report.
> ...




Remember this chart from earlier in this thread.

Well the Shanghai SE Composite Index blasted through 4231 to finish at 4272 today.  This is going to be very interesting to watch from here on in...


----------



## Kauri (29 May 2007)

Todays West Australian...........
*Chinese zoom in on hot stocks *


_29th May 2007, 8:30 WST_

_Chinese investors yesterday shrugged off growing warnings of a stockmarket bubble by pushing shares to a fresh all-time high yesterday. _

_The benchmark CSI 300, which measures China’s two exchanges, climbed 2.2 per cent to breach 4000 points. The Shanghai composite index cracked 4200 for the first time on record turnover of 261.1 billion yuan ($41.9 billion). _

_The CSI 300 index has now risen 206 per cent over the past year as new investors pile into stocks in pursuit of higher returns. _

_*Latest records show 362,719 brokerage accounts were opened in China on May 24, the fifth straight day the tally has exceeded 300,000. So far this year, 20.9 million accounts have been opened, four times the amount in 2006. *_

_Last week, former Federal Reserve chairman Alan Greenspan warned of a “dramatic contraction” by the Chinese stockmarket. _
_SHANGHAI_


----------



## Kimosabi (29 May 2007)

Kauri said:


> Todays West Australian...........
> *Chinese zoom in on hot stocks *
> 
> 
> ...




My greatest concern if the Chinese Stock Market goes POP, is what will the social implications be for the Chinese Government.

People can go a little crazy when they loose all their life savings and the money they have borrowed as well.

I think the US is going to try and crash the Chinese Stock Market and Economy.


----------



## KIWIKARLOS (29 May 2007)

i agree, the question is if their market collapses will all the investment then flow into other world markets namely US and europe.

since Chinas economy is production based and not demand based surely it can't effect other markets to much


----------



## Sean K (30 May 2007)

We might feel a ripple this afternoon. Will be interesting to see how we fare.



> 1004 [Dow Jones] Trader at international investment bank says reaction of Chinese shares to overnight news that China will triple stamp duty on share trades to 0.3% will be closely watched when they open at 0130 GMT for expected negative reaction, which could also weigh on regional bourses and could also be precursor to further contractionary measures. "They're really worried about the market over there overheating, so they might take other steps, that's the risk, says trader. Says with few other major drivers on relatively flat outlook for market, fears of Chines slow down could weigh on S&P/ASX 200, particularly mining stocks. (WEL)




Shorting up anyone?


----------



## Kimosabi (30 May 2007)

I think it's going to take more this to stop them...


----------



## nizar (30 May 2007)

Yeh Kennas.
China raise their stamp duty.

LAst time they did this in 1992 and 1997 it triggered major correction.
But in those days, i wonder how much brokerage accounts were opening each day?

Yesterday alone 455,000 in China (according to Craig JAmes on Sky news this morning).
20million this year.

Maybe its another 3.4% down day in China where nobody else cares?


----------



## CanOz (30 May 2007)

nizar said:


> Yeh Kennas.
> China raise their stamp duty.
> 
> LAst time they did this in 1992 and 1997 it triggered major correction.
> ...




They need these little dips if they're going to continue on for any length of time.

They really don't give a toss about how parabolic it is, they keep saying to me, "but this market is different this time". 

As long as there is money to go into it, i think it will keep rising.

Cheers,



(SSE is recovering now, opened down 3%, now only 2% down. This things like a rubber band!)


----------



## CanOz (30 May 2007)

Whoaaaa!

The SSE is down 5.71%

Looks like they're getting thier correction...i wonder if it will hit the stops today?


----------



## Gundini (30 May 2007)

She is in a free fall at the moment, hope we don't catch much of a cold.

I think the ASX built in the fall already... I hope 

Index Value: 4,071.27 
Trade Time: 11:30PM ET 
Change:  263.66 (6.08%) 
Prev Close: 4,334.924 
Open: 4,087.405 
Day's Range: 4070.51 - 4275.24 
52wk Range: 1,512.52 - 4,283.93


----------



## Gundini (30 May 2007)

Here is the link if anybody wants to monitor this...

http://finance.yahoo.com/q?s=^SSEC


----------



## Kimosabi (30 May 2007)

This has got to suck for the people who opened the  *455,111*  Trading Accounts - Yesterday


----------



## >Apocalypto< (30 May 2007)

China

Rasied stamp duty on shares from .1% to .3% today i think, so that could have somthing to do with it.

Indexes  	Prev. Closing   	Last  	High  	Low  	Change%
SSE 180 	9120.36 	8535.63 	8973.64 	8534.40 	-6.41
SSE 50 	3050.44 	2868.76 	3000.94 	2868.19 	-5.96
SSE Composite 	4334.92 	4071.27 	4275.24 	4070.51 	-6.08
SSE New Composite 	3660.74 	3437.28 	3611.79 	3436.63 	-6.10
SSE Dividend 	3796.16 	3542.51 	3770.10 	3542.51 	-6.68
SSE A Share 	4544.48 	4269.14 	4483.07 	4268.34 	-6.06
SSE B Share 	332.93 	303.69 	320.93 	302.61 	-8.78
SSE Fund 	3342.30 	3128.05 	3296.97 	3126.41 	-6.41
SSE Government Bond 	110.71 	110.67 	110.75 	110.63 	-0.04
SSE Corporate Bond 	120.23 	120.16 	120.22 	120.08 	-0.06

any one done a fibb break down of there market to work out 38% 50% support levels? so we know what is fine and what's not?

best place to start don't you think?

** We started falling before china opened so I don't think it had to much to do with us.**


----------



## Gundini (30 May 2007)

Does China come back from lunch at 3PM our time?

You would think that 6% off today would be enough, so if they rally back to say 3% this arvo, we might get a piggyback rally ourselves!


----------



## CanOz (30 May 2007)

Gundini said:


> Does China come back from lunch at 3PM our time?
> 
> You would think that 6% off today would be enough, so if they rally back to say 3% this arvo, we might get a piggyback rally ourselves!




13:30 i think.


----------



## professor_frink (30 May 2007)

CanOz said:


> 2:30 i think.




If the Chinese markets operate the same as the Hong Kong ones, then it will be 4:30.


----------



## Gundini (30 May 2007)

Yes re-opened 1330 AEST, and continues to fall... -7.3% 

Index Value: 4,018.64 
Trade Time: 1:06AM ET 
Change:  316.29 (7.30%) 
Prev Close: 4,334.924 
Open: 4,087.405 
Day's Range: 4017.97 - 4275.24 
52wk Range: 1,512.52 - 4,283.93


----------



## KIWIKARLOS (30 May 2007)

common guys next hting you'll be saying severe market correction, its rallying back now.

Simply an overreaction to the increase in tax from .1 to .3 %

Bargin time, it'll be choppy for a bit then back to gains.


----------



## dhukka (30 May 2007)

More up to date numbers available here:

Shanghai Stock Exchange


----------



## CanOz (30 May 2007)

KIWIKARLOS said:


> common guys next hting you'll be saying severe market correction, its rallying back now.
> 
> Simply an overreaction to the increase in tax from .1 to .3 %
> 
> Bargin time, it'll be choppy for a bit then back to gains.




Its got less than 3% until they start hitting the stops.

They've got until 4:00 to trade too, could keep going....


----------



## KIWIKARLOS (30 May 2007)

so your saying at 10% peoples stop losses will kick in and it'll be a freefall?

i fail to see how this tax increase is such huge news fundamentals haven't changed all it should do is slow growth not reverse it.

I dare say their gov will act if it doesn't go well.


----------



## CanOz (30 May 2007)

KIWIKARLOS said:


> so your saying at 10% peoples stop losses will kick in and it'll be a freefall?
> 
> i fail to see how this tax increase is such huge news fundamentals haven't changed all it should do is slow growth not reverse it.
> 
> I dare say their gov will act if it doesn't go well.




No mate, i meant that once they lose 10% they stop trading, just like this one that one of my supervisors bought 2000 shares worth of last week...see where it flatlined....its suspenped from trading anymore today.

Same goes for when they rise.

Cheers,


----------



## nizar (30 May 2007)

CanOz said:


> No mate, i meant that once they lose 10% they stop trading, just like this one that one of my supervisors bought 2000 shares worth of last week...see where it flatlined....its suspenped from trading anymore today.
> 
> Same goes for when they rise.
> 
> Cheers,




Yeh true.
The problem is every1s gonna want to sell 2mrw. 
But if the stocks gap down 10% on the open, then


----------



## Gundini (30 May 2007)

KIWIKARLOS said:


> common guys next hting you'll be saying severe market correction, its rallying back now.
> 
> Simply an overreaction to the increase in tax from .1 to .3 %
> 
> Bargin time, it'll be choppy for a bit then back to gains.




Don't think anyone here is calling this the correction China has to have, but simply watching a 5-6% freefall and trying to predict other market reactions.

I agree it's an overreaction to the 3% tax, but I do look forward to seeing if the DOW pulls back out of simpathy tonight as well. Will make for an interesting day tomorrow if it does... 

I'm on the sideline for the moment waiting for the potential bargains tomorrow. Just day traded today...


----------



## surfingman (30 May 2007)

wow thanks for that info everyone, a very strange setup but I guess what can be done with market as volatile as chinas, could be a scary run in the AU markets for a while if this isnt stabilized...


----------



## CanOz (30 May 2007)

This is one that my GF has, its about to hit the skids too! Recovered a little, but then down she goes...Its a steel company, not that it matters.


----------



## Temjin (30 May 2007)

Damn, not enough of a correction here, need more drop so we can buy more bargin Aussie stocks.  AORD barely drop just a little over 1% today, another evidence to the positive correlations between global markets. 

At crazy times like this, why would you want to speculate in the Chinese market? Human's greed is indeed a powerful thing.


----------



## >Apocalypto< (30 May 2007)

Temjin said:


> Damn, not enough of a correction here, need more drop so we can buy more bargin Aussie stocks.  AORD barely drop just a little over 1% today, another evidence to the positive correlations between global markets.
> 
> At crazy times like this, why would you want to speculate in the Chinese market? Human's greed is indeed a powerful thing.




1% is a fair move in a day for us Temjin.

with that latest high rejected I would not rule out futher downside! Patience is another powerful thing.


China 

when there is 1 billion people vs 20 million in oz is 5% & 10% so out of the ordanary when you compare the invester/trader power between us.


----------



## professor_frink (30 May 2007)

Temjin said:


> AORD barely drop just a little over 1% today, another evidence to the positive correlations between global markets.




What time was the news about the increase in stamp duty?


----------



## >Apocalypto< (30 May 2007)

professor_frink said:


> What time was the news about the increase in stamp duty?





I read it this morning before we opened Frink.


----------



## Gundini (30 May 2007)

professor_frink said:


> What time was the news about the increase in stamp duty?




I think it was actually Midnight China local time. The market opened up 6% down, and currently 5.42% after touching the 7's briefly.


----------



## Kauri (30 May 2007)

I think the reaction to the 0.2% increase in stamp duty will be a short-lived temporary psychological set-back... the gambling spirit will quickly re-assert itself, after all what monetary effect will a 0.2%.(0.4% round trip??) tax really have, when the participants have seen the market  making 2..3..4.. or even 5% daily. Fundementally, economically, and confidence-wise the outlook for China hasn't changed at all. All it will take is a few punters to jump back in and the rest will be frightened that they will be left behind. Then again, maybe not..  
   The next move a bit further down the track to cool the market... talk of a capital gains tax on shares maybe???
   I love this game...


----------



## professor_frink (30 May 2007)

Gundini said:


> I think it was actually Midnight China local time. The market opened up 6% down, and currently 5.42% after touching the 7's briefly.




Cheers Gundini.


Interesting. Confirms what I'm seeing on the charts presently- The DOW is following the nikkei South. Making today pretty well business as usual.


----------



## PeterPan (30 May 2007)

I think the US is going to try and crash the Chinese Stock Market and Economy.[/QUOTE said:
			
		

> That’s actually what scares me the most. Someone says that US tried with the bird flu a couple of years ago … they might try with making the share market crash this time around!
> 
> Anyway, I believe the problem is not the Chinese market but rather the other markets/investors. What I mean by this is that, if you take what’s happened today as an example, where the market in China has gone down nearly 7% for the measure imposed by the government and all the Asian markets more or less has followed suit (and most probably European and US markets will as well) without reason (because the stamp duty tax has not been increased in these other markets), you will agree with me that it’s only us (aussie, americans, Europeans, Japanese and Asians investors in our own markets) that can spark a global crisis.
> 
> ...


----------



## barnz2k (30 May 2007)

interesting thread! just read through a bunch of it. I can understand both views and the concerns of a china crash bringing down AUS amongst others..

Im curious if anyone on ASF is actually investing in the China market right now? Is it even possible for non-chinese?


----------



## CanOz (30 May 2007)

barnz2k said:


> interesting thread! just read through a bunch of it. I can understand both views and the concerns of a china crash bringing down AUS amongst others..
> 
> Im curious if anyone on ASF is actually investing in the China market right now? Is it even possible for non-chinese?




Funds like the China Growth Fund are able to invest through the B Shares i believe.


----------



## KIWIKARLOS (30 May 2007)

China doesn't drive markets though.

Countries like USA and europe which are huge consumers drive the demand, china simply makes the stuff. Its not like the factories will close if the market goes down?

With consumer sentiment still high around the world what is the worst that could happen?

Alot of ordinary chinese stand to loose money but if you've been to star city and time lately you'll know that they'll just move onto the next table and try again.

:


----------



## greggy (30 May 2007)

Gundini said:


> I think it was actually Midnight China local time. The market opened up 6% down, and currently 5.42% after touching the 7's briefly.




The Chinese market has had a stellar year thus far and is using any excuse to have a much needed correction.  I'm not surprised, but I'm not worried either.  
DYOR


----------



## Kimosabi (30 May 2007)

PeterPan said:


> That’s actually what scares me the most. Someone says that US tried with the bird flu a couple of years ago … they might try with making the share market crash this time around!
> 
> Anyway, I believe the problem is not the Chinese market but rather the other markets/investors. What I mean by this is that, if you take what’s happened today as an example, where the market in China has gone down nearly 7% for the measure imposed by the government and all the Asian markets more or less has followed suit (and most probably European and US markets will as well) without reason (because the stamp duty tax has not been increased in these other markets), you will agree with me that it’s only us (aussie, americans, Europeans, Japanese and Asians investors in our own markets) that can spark a global crisis.
> 
> ...




Oh, it get even better, guess who bought $110 billion of America's soon to be worthless Mortgage Backed Security's that funded the US's housing boom?



> “In 2002, Chinese investors owned about $100 million in U.S agency MBS. Now they own well over $110 billion, a nearly 1,000-fold increase in less than five years.”




http://thehousingbubbleblog.com/?p=2869

The US housing bust is going to have worldwide implications, because the rest of the world funded it. 

This is like a Massive Westpoint/Fincorp Property Investment Scheme etc, backed by over-valued property. The only problem is the United States Property Investment Rip-off scheme has grown to approx $4.5 Trillion dollars of Mortgage Debt in just 6 years, and much of the funding came from asia, and I guarantee the Overseas Investor's won't ever get their money back.


----------



## Gundini (30 May 2007)

I agree with PeterPan's post, I was going write something similar but couldn't work out how to say it, but you have mirrored my thoughts...

And the question again is why do we all catch a cold when China sneezes, especially when it's not related to their economy? You could hardly call a change in tax from 1% to 3% a massive deal... And their market off 6.5% so far.

Yet our market reacts like it directly affects them... and comes off 70 pts.

And should the DOW follow suit? Why should it? But it may come off in sympathy... Then again, the S&P500 is around 6 points from a massive double top... Interesting to see how it pans out.


----------



## KIWIKARLOS (30 May 2007)

So America is exporting its dodgy morgage debt and infaltion mostly to China.

If 5h!t does hit the fan in the US the only people losing out is China, lets say their economy collapses and maufactoring slows down, wouldn't it simply shift back to US and others where it has been migrating from for years.

If you ask me China has been compounding this problem by undervaluing is currency.

I don't think the fallout from any US or China problems will hit Australia as hard, sure we might have a recession but i can't see a collapse?


----------



## Kimosabi (30 May 2007)

KIWIKARLOS said:


> So America is exporting its dodgy morgage debt and infaltion mostly to China.
> 
> If 5h!t does hit the fan in the US the only people losing out is China, lets say their economy collapses and maufactoring slows down, wouldn't it simply shift back to US and others where it has been migrating from for years.
> 
> ...




It just so happens, Asia paid for much of America's War in Iraq as well.

I hope the this is the link to the US economist who made this statement ==> 
http://www.michael-hudson.com/audio/061208HudsonRealEstates.mp3

The more pieces of this Jigsaw Puzzle I put together, the worse it gets.


----------



## Kimosabi (30 May 2007)

Kimosabi said:


> It just so happens, Asia paid for much of America's War in Iraq as well.
> 
> I hope the this is the link to the US economist who made this statement ==>
> http://www.michael-hudson.com/audio/061208HudsonRealEstates.mp3
> ...




The "Asia paid for much of America's War in Iraq" quote is a bit after 47:30


----------



## CanOz (30 May 2007)

Gundini said:


> I You could hardly call a change in tax from 1% to 3% a massive deal...




It was actually even less than that! It was an increase in stamp duty from .1 to .3%....how crazy is that....so if you sold a parcel of shares worth 100,000 Yuan Renmimbi, you would have to pay an extra 200 Y.

I really think they're just trying to create a small panic to scare out the couple of hundred million speculators!

Everything just boggles my mind about China...

Cheers,


----------



## disarray (30 May 2007)

Kimosabi said:


> Oh, it get even better, guess who bought $110 billion of America's soon to be worthless Mortgage Backed Security's that funded the US's housing boom?




heh the americans are undisputed capitalist masters of the world. from making a killing during the wars to screwing the saudis out of their oil, and now the chinese have fallen for it. /golfclap.


----------



## purple (30 May 2007)

CanOz said:


> Everything just boggles my mind about China...
> ,




Hey CanOz, you're the ASF China correspondent for all of us here, since you're in the land itself!! just remember to post something if you see people jumping out of their windows      LOL.

apart from holding a few China H-shares which are supposedly 'heavyweights' but have been in the red ever since, I have only been watching the China market, not wanting to get back in quickly.


----------



## CanOz (30 May 2007)

purple said:


> Hey CanOz, you're the ASF China correspondent for all of us here, since you're in the land itself!! just remember to post something if you see people jumping out of their windows      LOL.
> 
> apart from holding a few China H-shares which are supposedly 'heavyweights' but have been in the red ever since, I have only been watching the China market, not wanting to get back in quickly.




 no worries, i'll keep a look out!...errr up.


----------



## TjamesX (30 May 2007)

I've been watching the Chinese market closely for the last couple of months.... been interesting to say the least. I very much think it could be a catalyst. 2 years ago it would've been insignificant, but now the number of people and amount of money involved is enough to cause problems (US $53 billion traded just today);

My Observations:

- The government increased the stamp duty to scare people away from the market
- Comments form greenspan about a 'bubble' did not effect the market, it took the govt to take action before the market listened
- After the 9% correction earlier this year the market has risen another 43% and would have to fall 30% to go back to the levels when the original correction occured
- At a forward PE of 48 (before today), based on PE analysis alone - the market could fall 50-60% before value investors would even consider entering
- Chinese workers are only given 3% on bank account deposits so there is no incentive to save
- Inflation is running above the deposit rate, so creating a flight to assets at any price

http://www.bloomberg.com/apps/news?pid=20601087&sid=aov7tk7g9L9A&refer=home

Interesting quotes;



> About 10 percent of maids in Shanghai resigned because they made more money trading shares






> Some 22 million accounts have been opened at brokerages so far this year, four times the amount in all of 2006





Should be interesting tomorrow - but I reckon its gonna go up for a bit longer 

TJ


----------



## Smurf1976 (30 May 2007)

CanOz said:


> They need these little dips if they're going to continue on for any length of time.
> 
> They really don't give a toss about how parabolic it is, they keep saying to me, "but this market is *different this time*".
> 
> ...



"Different this time"?

Yep, it's a bubble all right. Those 3 words are all you need to know - when the public says that it's time to look at selling.


----------



## chicken (31 May 2007)

Small corection yes,....but the crunch will come AFTER the olympic games...the Chinese will manage their economy as much or as good as possible...as THE CHINESE do not wish to lose face...I see good rises till after the OLYMPIC GAMES...maybe I am wrong....  I have Chinese friends...and saving face is one of their customs...and money is to the CHINESE very important part of their life....so I for one will stay invested.....but we all have to decide what is best for us....IMHO


----------



## chops_a_must (31 May 2007)

chicken said:


> Small corection yes,....but the crunch will come AFTER the olympic games...the Chinese will manage their economy as much or as good as possible...as THE CHINESE do not wish to lose face...I see good rises till after the OLYMPIC GAMES...maybe I am wrong....  I have Chinese friends...and saving face is one of their customs...and money is to the CHINESE very important part of their life....so I for one will stay invested.....but we all have to decide what is best for us....IMHO



I agree Chicken.

There are a number of factors that people need to take into consideration as well. Firstly, less than 10% of all chinese savings are in the share market (according to Lateline tonight), so even if their share market tanks, it's really not going to have a huge impact, as it would in other places. Secondly, the chinese share market has absolutely no correlation to the chinese economy. This is because chinese residents have incredibly limited choices when it comes to investment. Thirdly, they will end up owning the world, so in the long run it isn't going to matter anyway.

No, seriously. A 7 seven year commodities bull run will make it the shortest in history. I cannot see how this could be when we have the two most populous nations industrialising at the same time. Japanese industrialisation changed world markets forever, and I don't see why this time around it would be any different.

Any weakness in commodities, and there will be, in my mind will just encourage state sponsored development projects. Maybe it is in the interests of the chinese to tank world markets so they can get things done on the cheap... who knows?


----------



## nizar (31 May 2007)

Yanks didnt care about Chinese markets.
I think that proves my point well.

And China thought they were soooo important....


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## CanOz (31 May 2007)

nizar said:


> Yanks didnt care about Chinese markets.
> I think that proves my point well.
> 
> And China thought they were soooo important....




Can you remember a time when they really cared about anybody?

Cheers,


----------



## nizar (31 May 2007)

CanOz said:


> Can you remember a time when they really cared about anybody?
> 
> Cheers,




You're 100% correct and i agree.
But then why was everybody expecting them to follow China if it corrected?


----------



## disarray (31 May 2007)

CanOz said:


> Can you remember a time when they really cared about anybody?
> 
> Cheers,




the US poured a massive amount of money and effort into germany and japan after the wars, laying the basis for the stability we see in those areas today. unfortunately they seem to now be run by corporate whores of the worst kind which isn't doing anybody any favours, least of all themselves (as in their wider society, not their elite. elites always do well)


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## ideaforlife (31 May 2007)

People have taken Chinese share market too seriously. Indeed, the share market has little relevance to the overall economic development and trend in China. 

Share market has been in China only less than two decades. Due to the untransparency and immature accounting and auditing systems, the listed companies rarely provide authentic information to public. The market has been used by comany onwers to get funds for expansion while take little accountability and responsibility for the operation of the companies. It's currently still a largely speculative market where fund managers and big players manipulate the market to profit. 

Of course in the long run, the market will be more efficient and will be play a more substantial role in the national economy, but currently it provides little function as indication for the total economy performance.


----------



## barnz2k (31 May 2007)

Yeh US down in the morning then up to 6year highs - guess it was shrugged off.

As someone suggested above, seems like more than any global reaction to their market is more a people-getting-scared thing than an actual - how to say this - real reasons? (like actual economic reasons).

I just keep thinking - if someone had put $50K in there 2yrs ago, they could possibly have $200K now.. 

If someone offered me a 400% return in under 2yrs Id laugh haha

PS: Can - where you at in china?


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## Kauri (31 May 2007)

Well she's down another 2% odd and no doom and gloom on our side of the puddle...yet!!!


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## Gundini (31 May 2007)

Over 10% in 2 days... Not a bad pullback all the same... 

Index Value: 3,862.67 
Trade Time: 10:04PM ET 
Change:  -190.42 (-4.70%) 
Prev Close: 4,053.088 
Open: 4,006.28 
Day's Range: 3858.04 - 4077.74 
52wk Range: 1,541.41 - 4,283.93


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## Kimosabi (31 May 2007)

Uncle Festivus said:


> Another exponential chart - too scary for words  .
> 
> *NEW YORK (MarketWatch) -- China's booming A-share market could turn into a bubble if speculation among exuberant domestic retail investors is not curbed, Goldman Sachs warned Thursday, as the Shanghai Composite Index hit yet another intraday record high. *
> "Market trading statistics, liquidity indicators, and anecdotal evidence all point to optimistic, if not exuberant, sentiment in the domestic market," said Thomas Deng, analyst at Goldman Sachs, in a Thursday research report.
> ...











Well done Uncle Festivas, you were only out by 100 points.

The question now, is will it keep going up after a temporary pull back, stabilise or go down as quick as it went up, only time will tell I guess.

On a side note, don't be surprised if we see an announcement out of the US in the next week or so regarding a ratcheting up of more Trade Sanctions, I suspect the US will see this as an opportunity to sink the boot in.


----------



## Temjin (31 May 2007)

chicken said:


> Small corection yes,....but the crunch will come AFTER the olympic games...the Chinese will manage their economy as much or as good as possible...as THE CHINESE do not wish to lose face...I see good rises till after the OLYMPIC GAMES...maybe I am wrong.... I have Chinese friends...and saving face is one of their customs...and money is to the CHINESE very important part of their life....so I for one will stay invested.....but we all have to decide what is best for us....IMHO




Ohhhh, this is so true here from a Chinese's point of view here as well. (though living in Aus for too long) 

Creating wealth is like....OUR PURPOSE FOR LIVING, and SAVING FACE is definitely one of our custom. We "naturally" do WHATEVER it takes to create wealth, even if it means indirectly harming someone else in the process. A little off topic.

However, I would say the same human psychology of fearing to lose by rapidly selling if the situation becomes untenable will still occur. How much more drop before we see massive selling? I have no idea...


----------



## juiceman (31 May 2007)

As at 1450 est  a little bit of pressure released.
sse a share off 1.11%
sse b share off 3.52%
Nice if they would keep doing that for a while


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## Ferret (1 June 2007)

Read in the Shanghai Daily last week that many Shanghainese were becoming unhappy with their ayis.  

Ayis are chinese domestic helpers, mostly with little education.  Apparently many are spending too much time on their mobile phones talking to their stockbrokers and are not doing their jobs properly.

Scarey stuff!


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## ebing (2 June 2007)

how about the opinion on:China government increase in stamp duty from .1 to .3% in Midnight
i am chinese,  now people are curse their goverment and a big chaos will be happen! I have got -30% in my credit card . **** son of beach

perhaps we will be good friends


----------



## wayneL (2 June 2007)

ebing said:


> how about the opinion on:China government increase in stamp duty from .1 to .3% in Midnight
> i am chinese,  now people are curse their goverment and a big chaos will be happen! I have got -30% in my credit card . **** son of beach
> 
> 
> perhaps we will be good friends



ebing,

It's not a good idea to put your email address in a public forum, you will get spammed mercilessly. I will delete it if you want. Let me know.

Cheers


----------



## nizar (2 June 2007)

Its interesting to see Shanghai Composite Index was in a bearmarket from 2001-2005.

Its only been running for 2 years.

Look at the Russian market if you wanna to see a real bull.


----------



## greggy (2 June 2007)

nizar said:


> Its interesting to see Shanghai Composite Index was in a bearmarket from 2001-2005.
> 
> Its only been running for 2 years.
> 
> Look at the Russian market if you wanna to see a real bull.




Nizar, what surprises me about the bears carrying on about the fact that the Chinese market is going to bring down world financial markets is the fact that the Chinese market has gone ballistic during the past couple of years whereas the Aussie market  and most other markets haven't gone up anywhere near as much.  Hence, as we're seeing, each time the Chinese market falls significantly we only catch a very small dose of a cold, definitely not the flu.  
DYOR


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## ebing (2 June 2007)

5555555555555


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## Jikx (3 June 2007)

greggy said:


> Hence, as we're seeing, each time the Chinese market falls significantly we only catch a very small dose of a cold, definitely not the flu.




Sounds to me that we've reached the "insanity" stage of the bubble. That bubble in China will burst. It has to, there's nothing "backing" the value, even sound minders are getting in the act, and that's definitely a sign to get out. 

Where we go from there.. I'm not sure. How much foreign money is invest in those markets? How bad will the rush out become? Will the crash of the Chinese market cause the Chinese economy to blow? A drop off in the massive amounts of cash flowing out of China will spell doom for the US and Australia.

Let's hope the Chinese government lets the air out slowly.


----------



## nizar (3 June 2007)

Jikx said:


> and that's definitely a sign to get out.




Then get out bro. Many buyers there for your stock.

Recent research shows that only 16% of the Australian public have 16% of their savings in Stocks. Back in the peak of tech boom, it was 35%.

Punters are still cautious. We have yet to see the irrational exuberance phase yet where all the punters 4get about tech boom and think "its different this time". Valuations are still rational in the markets, especially with the bigger miners.

This is the most profitable time to be in the market. (and the most risky??).
But you know what they say, if you cant stand the heat then get out of the oven.

THis report by Dr.Oliver, Chief economist at AMP is a good read and fairly accurate representation of whats happening at the moment (in my opinion).

http://www.ampcapital.com.au/K2DOCS...4E81-429D-8D3D-2E0C2C0444B7/OINo16.pdf?DIRECT

And like iv always maintained, we have NO PROOF/EVIDENCE that we or any global equity markets will follow China. We certainly didnt follow them on the way up.


----------



## Kimosabi (3 June 2007)

nizar said:


> Recent research shows that only 16% of the Australian public have 16% of their savings in Stocks. Back in the peak of tech boom, it was 35%.




I suspect this figure probably doesn't include super.

I was listening to an interview on the ABC last week, with a guy that has written a book about China, and an interesting point that he made is that much of the expansion/industrialisation of China has been funded by Savings of the Chinese Peasants, of whioch there is about 800,000,000.


----------



## nizar (3 June 2007)

Yeh well in as of last week i read that the number of broking accounts in China reached 100million.

Thats roughly the number of their middle class.

Now when the peasants start buying in....... thats when its gonna get interesting.....


----------



## ta2693 (3 June 2007)

Temjin said:


> Ohhhh, this is so true here from a Chinese's point of view here as well. (though living in Aus for too long)
> 
> Creating wealth is like....OUR PURPOSE FOR LIVING, and SAVING FACE is definitely one of our custom. We "naturally" do WHATEVER it takes to create wealth, even if it means indirectly harming someone else in the process. A little off topic.
> 
> However, I would say the same human psychology of fearing to lose by rapidly selling if the situation becomes untenable will still occur. How much more drop before we see massive selling? I have no idea...




Do not be ironic. creating wealth is human being. not only Chinese. We human being do whatever it takes to create wealth, even if it would harm someone else in process, as long as we would not be hurt in the future.


----------



## nizar (3 June 2007)

Just a question.

If China has a 20-30% correction (i would call this a crash as its >10%), will the index be bought up again or will CHinese people just lose faith in the markets and go back to savings accounts??

COz i suspect if we get a prolonged spell of weakness everybody will just run for the exits no doubt, but will they be back?


----------



## ta2693 (3 June 2007)

ideaforlife said:


> People have taken Chinese share market too seriously. Indeed, the share market has little relevance to the overall economic development and trend in China.
> 
> Share market has been in China only less than two decades. Due to the untransparency and immature accounting and auditing systems, the listed companies rarely provide authentic information to public. The market has been used by comany onwers to get funds for expansion while take little accountability and responsibility for the operation of the companies. It's currently still a largely speculative market where fund managers and big players manipulate the market to profit.
> 
> Of course in the long run, the market will be more efficient and will be play a more substantial role in the national economy, but currently it provides little function as indication for the total economy performance.




You are right, I can not agree with you more.


----------



## ta2693 (3 June 2007)

nizar said:


> Just a question.
> 
> If China has a 20-30% correction (i would call this a crash as its >10%), will the index be bought up again or will CHinese people just lose faith in the markets and go back to savings accounts??
> 
> COz i suspect if we get a prolonged spell of weakness everybody will just run for the exits no doubt, but will they be back?




Let me rephrase your question. if dad and mum lose 20-30% of their wealth in a  
week, will they come to the market and play again? 
My answer is no. If they are burnt, they will remember and will not come to market again at least in five years.


----------



## ta2693 (3 June 2007)

KIWIKARLOS said:


> China doesn't drive markets though.
> 
> Countries like USA and europe which are huge consumers drive the demand, china simply makes the stuff. Its not like the factories will close if the market goes down?
> 
> ...



They are gamblers in star city, i.e. high risk profile. They are pretty much different from dad and mum investor (low risk profile) in Chinese market right now.


----------



## Kauri (4 June 2007)

Shanghai down a fair whack again today... so far... will it pull up as a minor double bottom or keep heading south... may take a bit of the sting out of our market??....


----------



## eMark (4 June 2007)

Kauri said:


> Shanghai down a fair whack again today... so far... will it pull up as a minor double bottom or keep heading south... may take a bit of the sting out of our market??....




I for one am pleased to see it continue to fall; albiet preferably a few % at a time. You do not want to see it lose 10-12% + on a single day again....... I think the world markets are getting used to seeing China fall a little at a time. Our market today has come back some from it's highs, but hasn't given up all gains.

At time of post

3,750.51   
- 253.48 (6.34%)


----------



## Kauri (4 June 2007)

eMark said:


> I for one am pleased to see it continue to fall; albiet preferably a few % at a time. You do not want to see it lose 10-12% + on a single day again....... I think the world markets are getting used to seeing China fall a little at a time. Our market today has come back some from it's highs, but hasn't given up all gains.
> 
> At time of post
> 
> ...




   At its best today she was down the best part of 15% from her recent highs.... and all due to a 0*.*2% increase in stamp duty tax.... 
   Wonder if the media over there is like ours.. market drops due to profit-takers.. and when it recovers it's down to bargain hunters...    ???


----------



## dubiousinfo (4 June 2007)

Down 16% from its highs over the last 5 days. Anyone like to venture where support might be??


----------



## toothfairy (4 June 2007)

Why would anyone here, or anywhere including China worry about the recent 15% or so reduction in the Chinese stock market? Heaps of people there have made a lot of $ from it already, a few has to lose. Really good to see a so called communist country has such free market spirit. A few people may commit suicide, but that's the price to pay for freedom to choose.


----------



## Uncle Festivus (5 June 2007)

nizar said:


> Just a question.
> 
> If China has a 20-30% correction (i would call this a crash as its >10%), will the index be bought up again or will CHinese people just lose faith in the markets and go back to savings accounts??
> 
> COz i suspect if we get a prolonged spell of weakness everybody will just run for the exits no doubt, but will they be back?




Good question. The Chinese government has also said they plan to eliminate the 20% tax on interest income too, so there may be momentum building for profit taking and back into savings.

This could also build into a self perpetuating correction if it gets hold over a number of day's, as it appears to be doing. Where it stops nobody knows. Isn't that what they say at the roulette wheel, or is it the merry go round?

Breathless update 1 - Shanghai down nearly 6% as well, after yesterdays 8% plus pullback.


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## barnz2k (6 July 2007)

down another 5% or so today?

Indexes  	Prev. Closing   	Last  	High  	Low  	Change%
SSE 180 	8290.53 	7857.96 	8215.61 	7852.63 	-5.22
SSE 50 	2877.80 	2745.97 	2860.10 	2743.42 	-4.58
SSE Composite 	3816.17 	3615.87 	3778.40 	3614.53 	-5.25
SSE New Composite 	3238.11 	3067.14 	3207.10 	3065.99 	-5.28
SSE Dividend 	3199.80 	2989.25 	3158.49 	2982.17 	-6.58
SSE A Share 	4005.20 	3794.38 	3965.60 	3792.98 	-5.26
SSE B Share 	254.78 	246.55 	253.43 	246.02 	-3.23
SSE Fund 	3445.84 	3281.75 	3401.57 	3277.08 	-4.76
SSE Government Bond 	109.85 	109.88 	109.88 	109.83 	0.03
SSE Corporate Bond 	117.73 	117.92 	118.20 	117.28 	0.16


----------



## >Apocalypto< (6 July 2007)

barnz2k said:


> down another 5% or so today?
> 
> Indexes  	Prev. Closing   	Last  	High  	Low  	Change%
> SSE 180 	8290.53 	7857.96 	8215.61 	7852.63 	-5.22
> ...




Thank you for posting that, hey people wake up!

China is in a short term down trend for 2 weeks! where is all your concern?

I look at the chart every afternoon.

So where are you china crash experts? This could be the start of it! LOL you are only here when it makes the news cuz it falls 8% -10%

Now china as you see in the chart (SSE 180 INDEX) below china is in a short term down trend and are we??? Case closed. Alot of hot air and smoke and mirrors in here!


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## bean (6 July 2007)

I have been following the composite closed yesterday 3615
What I have noticed is that it only has two days down in a row before a bouce of a couple of days.
Yesterday was it second day down so today up?
Its 100 day moving average is 3525
So a testand a bounce from that today?


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## Santob (6 July 2007)

This posting relates more to Hong Kong (Where I am currently) but does mention the reason for the drop yesterday.



> 2007-7-5   04:36:00 p.m. HKT, XFNA
> Hong Kong shares close firmer as QDII news fuels hopes for more fund inflows
> 
> 
> ...


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## >Apocalypto< (6 July 2007)

bean said:


> I have been following the composite closed yesterday 3615
> What I have noticed is that it only has two days down in a row before a bouce of a couple of days.
> Yesterday was it second day down so today up?
> Its 100 day moving average is 3525
> So a testand a bounce from that today?





Bean those patterns are random i would not try to trade off them unless they appear 3 times out of 4 weeks what you are seeing is minor rallies in a selling move common as sliced bread.

i really suggest you start using charts I know what your trying to do with prices codes to see pattern and pivots points in price. I give u credit for trying but Bean u anit no Jesse Livermore there is a big tip for u if thats the type of trading system u are trying to develop! Get reading on how to trade in stocks! another tip.


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## bean (6 July 2007)

Trade_It said:


> Bean those patterns are random i would not try to trade off them unless they appear 3 times out of 4 weeks what you are seeing is minor rallies in a selling move common as sliced bread.
> 
> i really suggest you start using charts I know what your trying to do with prices codes to see pattern and pivots points in price. I give u credit for trying but Bean u anit no Jesse Livermore there is a big tip for u if thats the type of trading system u are trying to develop! Get reading on how to trade in stocks! another tip.




Yes a chart would have helped today


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## bean (9 July 2007)

Interesting to see how much further this rally goes


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## resourcesman (19 July 2007)

> Just a question.
> 
> If China has a 20-30% correction (i would call this a crash as its >10%), will the index be bought up again or will CHinese people just lose faith in the markets and go back to savings accounts??
> 
> COz i suspect if we get a prolonged spell of weakness everybody will just run for the exits no doubt, but will they be back?




Didn't the japanese run for the exits after their crash 15 years ago and have only started to return recently, and this led to a vicious cycle? I'm not sure how similar the mentality of the chinese and japanese are


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## toothfairy (19 July 2007)

resourcesman said:


> Didn't the japanese run for the exits after their crash 15 years ago and have only started to return recently, and this led to a vicious cycle? I'm not sure how similar the mentality of the chinese and japanese are



As different as the Jews and Germans.


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## Pommiegranite (19 July 2007)

toothfairy said:


> As different as the Jews and Germans.




Can't German's be Jews?

Or are you still mistaking Germans' for Nazi's 62 years after the end of WW2?


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## wayneL (19 July 2007)

Pommiegranite said:


> Can't German's be Jews?
> 
> Or are you still mistaking Germans' for Nazi's 62 years after the end of WW2?



Don't mention the war!  :hide:


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