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China’s Stock Market Plunges
Topic Started: 27 Jun 2015, 11:54 AM (19,954 Views)
peter fraser
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The Light
5 Jul 2015, 06:02 PM
If you would like some really quality commentary on China, watch this video:

https://www.youtube.com/watch?v=C2SStFt-k_A

From 15:00 ~ 20:00 minutes will give you an idea of how much overcapacity there is in China in terms of property.

If the stock market falls precipitate property prices falls in China, that will be a one in a generation event that will send shockwaves through the entire world just like the GFC.
What do you see as the flow on from a crash in the Shanghai market? Will money flow out of stocks in China and into real estate within China, or will if low overseas?
Will that trigger a crash in markets globally?

I understand your concerns but I think that there are several possibilities that a crash in the bourse might trigger, and it's certainly not clear what the subsequent effect will be.

Of course Greece is a further market complication.
Any expressed market opinion is my own and is not to be taken as financial advice
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Loki
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The Light
5 Jul 2015, 06:02 PM
If you would like some really quality commentary on China, watch this video:

https://www.youtube.com/watch?v=C2SStFt-k_A

From 15:00 ~ 20:00 minutes will give you an idea of how much overcapacity there is in China in terms of property.

If the stock market falls precipitate property prices falls in China, that will be a one in a generation event that will send shockwaves through the entire world just like the GFC.
That was a really good presentation, with a panel that have boots on the ground and a lot of experience.

Cue the Doomster Police in 5 .. 4 ... 3 ...


“Talk sense to a fool and he calls you foolish.” - Euripides
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Dr Watson
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Posted Image
Attached to this post:
Attachments: China_Iron_Ore_Port_Inventory.jpg (40.48 KB)
Edited by Dr Watson, 6 Jul 2015, 09:33 AM.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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The Light
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peter fraser
5 Jul 2015, 07:27 PM
What do you see as the flow on from a crash in the Shanghai market? Will money flow out of stocks in China and into real estate within China, or will if low overseas?
Will that trigger a crash in markets globally?

I understand your concerns but I think that there are several possibilities that a crash in the bourse might trigger, and it's certainly not clear what the subsequent effect will be.

Of course Greece is a further market complication.
I think that the presentation actually addressed your questions better than I could:

- there was large amounts of capital flight from China in 2014 which is most likely continuing through this year
- that capital flight will not last forever (domestic investors are getting clobbered in China), I think central planners also will not allow it to continue. Interesting that some of the property purchases in Australia were from high up members of the CCP
- I think that economic trouble in China will definitely cause two things in Australia, the first is the mining industry will continue to go bust as demand collapses, the second is that the overseas investors will eventually dry up, and some may get exposed to poor conditions back home in China and be forced to sell their Australian property.

It isn't a co-incidence that people have noticed an increasing number of foreign buyers from China - it is capital flight from a downward spiral. It is a temporary phenomenon and will not prop up the Australian housing market for the next decade.
peter fraser
5 Jul 2015, 07:27 PM
What do you see as the flow on from a crash in the Shanghai market? Will money flow out of stocks in China and into real estate within China, or will if low overseas?
Will that trigger a crash in markets globally?

I understand your concerns but I think that there are several possibilities that a crash in the bourse might trigger, and it's certainly not clear what the subsequent effect will be.

Of course Greece is a further market complication.
I agree that the subsequent global effects will be very difficult to predict. Some countries will suffer as China is a major trading partner. It will also be interesting on a microeconomic scale for firms with foreign direct investment and manufacturing relationships with China.

If western firms have been buying up Chinese debt or CDO's to get 'in' on the Chinese property market, it will definitely flow into international financial institutions, but that may be on a case by case basis depending on the exposure of specific banks or investment banks.
Edited by The Light, 6 Jul 2015, 02:51 PM.
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newjez
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Dr Watson
6 Jul 2015, 09:33 AM
Posted Image
Can you do one of these against price in Australian dollars and us dollars?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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peter fraser
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The Light
6 Jul 2015, 02:41 PM
I think that the presentation actually addressed your questions better than I could:

- there was large amounts of capital flight from China in 2014 which is most likely continuing through this year
- that capital flight will not last forever (domestic investors are getting clobbered in China), I think central planners also will not allow it to continue. Interesting that some of the property purchases in Australia were from high up members of the CCP
- I think that economic trouble in China will definitely cause two things in Australia, the first is the mining industry will continue to go bust as demand collapses, the second is that the overseas investors will eventually dry up, and some may get exposed to poor conditions back home in China and be forced to sell their Australian property.

It isn't a co-incidence that people have noticed an increasing number of foreign buyers from China - it is capital flight from a downward spiral. It is a temporary phenomenon and will not prop up the Australian housing market for the next decade.

I agree that the subsequent global effects will be very difficult to predict. Some countries will suffer as China is a major trading partner. It will also be interesting on a microeconomic scale for firms with foreign direct investment and manufacturing relationships with China.

If western firms have been buying up Chinese debt or CDO's to get 'in' on the Chinese property market, it will definitely flow into international financial institutions, but that may be on a case by case basis depending on the exposure of specific banks or investment banks.
Thank you for the reply.
Any expressed market opinion is my own and is not to be taken as financial advice
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Drgonzo
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The Hang Seng is currently down 1,089.5 points and the Nikkei is down 503.7.

Somethings a going on.
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Terry
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Drgonzo
6 Jul 2015, 04:28 PM
The Hang Seng is currently down 1,089.5 points and the Nikkei is down 503.7.

Somethings a going on.
And the yen is getting stronger, despite the massive money print. Logic flying all over the place. And the Aussie and Kiwi as risk proxies fall regardless.
Edited by Terry, 6 Jul 2015, 06:09 PM.
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GloomBoomDoom
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Chexit

http://www.news.com.au/finance/economy/chinese-chaos-worse-than-greece/story-fnu2pycd-1227430761673
Edited by GloomBoomDoom, 6 Jul 2015, 06:58 PM.
MSE
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Foxy
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Zero is coming...

It is all supply and demand, bubble then 40 % drop.
Brace, brace, brace.
Peter
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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