Or Is China the word?
“Chinese institutions are too outdated, too inflexible, too lacking in coordination to be of any use when the one thing the government can do—aggregate and direct flows of money—is undermined as a tool,” she says. “The sell-off is similar to a bank run, in which each player’s only real motive is to capture as much of the value of his assets as possible before the whole edifice collapses.”
–Anne Stevenson-Yang, Founder – JCap Investments
The above paragraph is from the conclusion of “To save its stock markets, China is putting its whole financial system at risk” at Quartz, in an article that focuses on the policy background, and quotes several China-focused investment analysts.Also of interest: Walter Russell Mead with speculative notes on the situation in a global context – “China Stocks Swoon Despite Orders From Beijing.” At Business Insider, however, Elena Holodny splashes some cold water on the freakout party: “Everyone freaking out about China’s stock-market crash is missing one thing.” (Spoiler: the Chinese aren’t panicking, because the Chinese stock exchange isn’t really that big…).
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China just instituted a six-month ban on stock sales by major shareholders.
I’m pretty sure we’ve seen this movie…Report
Hudsucker proxy?Report
Live Free or Die Hard.Report
I know this is a big deal in China but I’m puzzling over how big a deal it’ll be outside China. My impulses flip back and forth between hair raising horror and “meh, we probably won’t even hear more about it.”Report
People are WATCHING this, in a way they aren’t watching the Euro anymore. The problem with markets is uncertainty, and China’s enough of a black box that we’re uncertain.Report
That’s part of why it’s newsworthy cynical zic says.Report
Indeed but cynical North points out “outside of China everyone knows China is a place you send your investment money to vanish and not in that helpful illegal caymen islands vanish but vanish vanish.” so then who outside of China will care. Then earnest North says “if this is the pebble that starts the landslide inside China everyone will care.”Report
Given the NYSE’s current… difficulties… my first intuitions are that someone is showing initiative and trying to turn a localized thing into a global thing in an effort to show how this isn’t merely a local thing but a global one.
But I’m paranoid.Report
Panicking the stock market is a great way to make money!
… so long as you don’t get caught.
Of course, Goldmann Sachs has never worried about breaking the law.Report
These difficulties?
http://www.washingtonpost.com/business/economy/nyse-trading-has-been-halted/2015/07/08/46b51974-2588-11e5-b72c-2b7d516e1e0e_story.htmlReport
Sounds to me like the folks in China have been reading Krugman and watching the US’s limited recovery vs. Europe’s struggles with austerity.Report
China threw a metric a** ton of money into the system through the 2008 financial crisis (on top of Olympic stimulus) (but minus shutting everything down for air quality). It has seemed to make things copacetic for a few years
But my thinking is a ‘developing’ economy like China’s withe vastly different tax incidence and government economic involvement than the EU or US should not and cannot use the textbook economic counter cyclical stabilizers that a country with a robust tax collection system and more or less transparent government spending can.Report