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China's Shanghai crash of 2015
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China's Shanghai crash of 2015

  #21 (permalink)
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treydog999 View Post
No China does not have any sort of company sponsored 401k, IRA or any real retirement investment vehicles. Their social security pay outs are very low as well only around 1-200 USD per month. Also they do not have as good of health insurance. This is why they are very good savers and depending on their children to support them when they are old. The level of retirement tools available are extremely low.

They must self direct invest. Of course they want to get rich quick. But that is in comparison to the USA. If you consider how fast they have been getting richer in the past 15 or 20 years in perspective, it really is more normal. So yes there are going to people out there who lose everything, their house ,their car, their retirement etc.

There are a lot of components to this knock on effect from the retail trader side. The government's news media was basically saying invest in the bull market is a sure thing. Allowing for huge 10 to 1 leverage on equities. And basically taking anything as collateral not just deposited cash but also real estate and basically anything. this made everyone feel safe because it good news was coming from the top. As well as a keeping up with the Jones type thing. Imagine the nightly news every night told you how good it is to trade stocks and you see your coworkers and neighbors making money. It is something that is just not possible in the usa.

Hence why the PBOC is losing cred, they tell everyone and their mum to invest and then goes down the tubes in just 3 weeks. Plus a lot of Chinese people love a good punt, we see that all the time, when they spin the wheel they spin it big.

Disclaimer: I'm Chinese and deal with Chinese investors, in case anyone thought I was being racist

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  #22 (permalink)
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I can't understand why the Chinese government thought that was a good idea.

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  #23 (permalink)
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Big Mike View Post
I can't understand why the Chinese government thought that was a good idea.

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Could probably debate this to the moon and back but from what I understand it's so that they can use the stock markets to raise capital for companies. There is too much debt (that is also going sour now) floating around so they are trying to tap in to the very large amounts of equity floating around inside savings to try balance that out.

Of course the irony is not lost in me in that raising equity with debt is really just debt anyway...

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  #24 (permalink)
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PeakGrowth View Post
Hence why the PBOC is losing cred, they tell everyone and their mum to invest and then goes down the tubes in just 3 weeks. Plus a lot of Chinese people love a good punt, we see that all the time, when they spin the wheel they spin it big.

Disclaimer: I'm Chinese and deal with Chinese investors, in case anyone thought I was being racist


PeakGrowth View Post
Could probably debate this to the moon and back but from what I understand it's so that they can use the stock markets to raise capital for companies. There is too much debt (that is also going sour now) floating around so they are trying to tap in to the very large amounts of equity floating around inside savings to try balance that out.

Of course the irony is not lost in me in that raising equity with debt is really just debt anyway...

I completely agree with your two posts. I do not understand the overall strategy of basically just moving the debt around and financing it with more debt in another sector. Yes the Chinese need a way to get financing for companies, by this i mean entrepreneurs who are actually building value. This was supposed to go through the IPO mechanism and 3rd tier exchange because the banks were just not giving out credit on good terms and making it too difficult and expensive. But it ends up being a giant ponzi scheme as everyone just has laid off debt with someone else, all of which is making interest in some cases in excess of 15%. Around 8% is what rich people consider the risk free rate.

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  #25 (permalink)
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treydog999 View Post
I completely agree with your two posts. I do not understand the overall strategy of basically just moving the debt around and financing it with more debt in another sector. Yes the Chinese need a way to get financing for companies, by this i mean entrepreneurs who are actually building value. This was supposed to go through the IPO mechanism and 3rd tier exchange because the banks were just not giving out credit on good terms and making it too difficult and expensive. But it ends up being a giant ponzi scheme as everyone just has laid off debt with someone else, all of which is making interest in some cases in excess of 15%. Around 8% is what rich people consider the risk free rate.

Moving public (or is it corporate? Not sure with China with their SOE) debt to private debt, private can absorb a very large amount of debt (i.e. Japan)

But yes you are right, it's just shifting it around.

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  #26 (permalink)
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SGX China A50 index futures

Traders can get access to the China market action through SGX China A50 index futures...it is a wild market but sure make your heart stronger...Just note these for your preparation...

SGX China A50 index futures
XINHUA A50 FUTURES UPPER LIMIT

1st Upper Limit: 13050 (10%)
2nd Upper Limit: 13642.5 (15%)

There will be a Cooling period of 10 minutes when the limit is trigerred.
Please Note upon triggered the Final 15% limit, it will be a free fall.

This thread cover the index discussion of late..
SGX A50 Index future | Elite Trader

Cheers...eric
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  #27 (permalink)
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yongthanyee ,
where can USA residents trade the Chinese Indexes ?

Is IB currently the only broker that offers it to US residents ?

Thanks again

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  #28 (permalink)
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My take on this market situation is that it's basically just China's version of Nasdaq 99 - complete with a similar ending (albeit their govt steps in and tries to prop it up).

I trade this nightly on SGX (IB symbol XINA50, Barchart: HN) and it's more active than US futures. Huge volume, big moves, great stuff. Liquidity, and IMO action, is better than HSI or MHI (Hang Seng and Hang Seng mini). There are correlations with HHI.HK and MCH (Hang Seng China Enterprise and the mini variant).

I've traded through both days of recent limit moves (1st day was 2 limit downs, 2nd day was limit up within an hour) and at no point was it untradeable. Something to be aware of though is that if near the limit the exchange will reject your profit target for being outside the current limit. I don't expect it to be making any 2nd limit moves this week and there may even be trading interruptions with the approaching typhoon.

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  #29 (permalink)
Eric Yong
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Hi...you can get the answer from this thread...
https://futures.io/index-futures-trading/36161-chinese-index-futures-csi300.html


mdsvtr View Post
yongthanyee ,
where can USA residents trade the Chinese Indexes ?

Is IB currently the only broker that offers it to US residents ?

Thanks again


Cheers...eric
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  #30 (permalink)
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Big Mike View Post
I can't understand why the Chinese government thought that was a good idea.

Sent from my phone

All governments want to prop up the markets.

It's populism

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