China to Take Down World Financial Markets

[professor_frink]

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

 

[CanOz]

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,

 

[nizar]

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.

 

[wayneL]

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.

 

[professor_frink]

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

 

[CanOz]

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?

 

[professor_frink]

Is that what your doing now Prof?

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

 

[bean]

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

 

[nizar]

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.

 

[CanOz]

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,

 

[nioka]

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.

 

[seafarer]

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.

 

[constable]

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?

 

[Kimosabi]

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/

 

[constable]

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/

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

 

[reece55]

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

 

[Kimosabi]

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...

 

[jaolsa]

"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

 

[bean]

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!!!

 

[constable]

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!