tag:blogger.com,1999:blog-7713394782406533224.post3279590657254894842..comments2023-10-30T12:04:51.276-04:00Comments on IICS: Armageddon on July 17: Government Goliath vs Short-Selling DavidsLZhttp://www.blogger.com/profile/05082516166181943903noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7713394782406533224.post-6290896564709553562015-07-12T00:57:30.641-04:002015-07-12T00:57:30.641-04:00The govt fumbled its response for the first few we...The govt fumbled its response for the first few weeks of the crash, but as soon as Xi and Zhou were on the plane to Russia the intervention became extreme with 2 days of nearly every stock up 10% (ridiculous). It makes me think that there are strong divides in the party as to what should be done - its possible that the overwhelming intervention was done without approval from Xi and that it could be a maneuver by a rival faction to gain power.<br /><br />Either way this is a big loss of face and power for Xi and from here on out the hard communists will forever remind him and the liberals of the failure of their stock market. Also this will greatly damage any foreign capital's interest in going to China - what portfolio manager is willing to risk his capital being seized in a Potemkin market or worse, get arrested for trying to exit a position?<br /><br />They've turned their bogus stock market bubble into something far, far worse than it should have been. They can delay the eventual financial "collapse", but the cannot avoid it.<br /><br />- LukeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7713394782406533224.post-79368109111774295742015-07-11T23:04:50.994-04:002015-07-11T23:04:50.994-04:00It's a total disaster. Xi, Li and the PBOC spe...It's a total disaster. Xi, Li and the PBOC spent two whole years crafting a tightly controlled economic transition and they blew it up. To this point, the slowdown was contained and policy was proceeding at a steady pace. The past two weeks policy makers went completely off the rails.LZhttps://www.blogger.com/profile/05082516166181943903noreply@blogger.comtag:blogger.com,1999:blog-7713394782406533224.post-44735635776995928222015-07-11T21:28:30.327-04:002015-07-11T21:28:30.327-04:00It's hard to see how the government can get it...It's hard to see how the government can get itself out of this one without just nationalizing the entire stock market (by getting it into the hands of mega entities that are essentially arms of the govt). If it stops purchasing shares they will plummet back down - if it continues to gradually purchase shares then gamblers will front run everything up 10% and demand to be bailed out if the govt does not show up one day (and since its so levered, it'll be a risk to the financial system if they do not bail it out). It seems like they either need to let the market naturally collapse, or just nationalize the whole thing and be done with it.<br /><br />If they do not stop what they are doing then they have turned the stock market into a guaranteed entitlement program for all current speculators to exit at highly inflated valuations.<br /><br />I'm sure that if they nationalize it there will still be a fake market with fake prices so that they can continue their potemkin village claiming that they have the world's largest companies.<br /><br />I've seen some float figures around on ZH and FT recently but I do not believe that data to be accurate. The ~10 mega companies which have ~40% of the total market cap only have about ~2% floating and the rest primarily owned by the govt or ~10% foreigners. The float on the SH/SZ market I believe is actually quite small, and the margin / float figures we've seen recently I also deeply suspect are inaccurate (the margin is an even greater percentage of the float). They can easily manipulate this up as much as they want, but soon they will have nationalized the market - BJ can enjoy their investment in bogus internet and p2p lending companies.<br /><br />What a disaster.<br /><br />- LukeAnonymousnoreply@blogger.com