Chinese stock market – The Burning Platform

HAPPY “CHINESE” NEW YEAR

Isn’t it funny how those in power feel the need to shut down the free market when stocks plunge by 7%? Would they shut down the market if prices had soared by 7%? Welcome to 2016 folks. The markets have been rigged for years. The debt levels are unsustainable. The jig is up. Shit is hitting the fan. Just buy and hold. That’ll work out real well for ya.

China Halts Stock Trading For Day After Entire Market Crashes

Submitted by Tyler Durden on 01/04/2016 01:11 -0500

Following the initial halt in CSI-300 Futures at the 5% limit down level, the afternoon session opened to more carnage and amid the worst ‘first day of the year’ in at least 15 years, Chinese stocks collapsed further to a 7% crash. At 1334 local time, stock trading was halted for the rest of the day across all exchanges (at least two hours early).

As Bloomberg reports,

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Chinese stock trading was halted for the rest of the day after the CSI 300 Index plunged more than 7 percent.

Trading of shares and index futures was halted from about 1:34 p.m. local time, according to data compiled by Bloomberg.

Stocks fell as manufacturing contracted for a fifth straight month and investors anticipated the end of a ban on share sales by major stakeholders.

Under the mechanism which only became effective Monday, a move of 5 percent in the CSI 300 triggers a 15-minute halt for stocks, options and index futures, while a move of 7 percent close the market for the rest of the day. The CSI 300 of companies listed in Shanghai and Shenzhen fell as much as 7.02 percent before trading was suspended.

Not a happy new year…

Dow futures are now down over 150 points from NYE close, Gold and Treasuries are bid, and offshore Yuan has plunged most since the August devaluation.

MEN GO MAD IN HERDS

The Chinese real estate bubble has been imploding for the last year. The Chinese economy is barely growing at 1.6% after decades of 10% growth. There are millions of unoccupied condos. There are dozens of ghost cities and empty office towers. It’s the most corrupt nation on earth. We are in the midst of a global recession.It’s pure madness that the Chinese stock market would soar when its leading economic indicators crash to 2008 lows.

Its stock market has gone up 115% in the last 9 months. It has gone up 80% in the last 5 months. It has gone up 35% in the last month. Housewives and other uneducated gamblers have opened a record 10.8 million new stock accounts this year, more than the total number for all of 2012 and 2013 combined.

The Hong Kong stock market has gone up 14% in three weeks.

Since real estate investing is failing miserably, the Chinese middle class have piled into stocks on margin. Where have I seen that before? Margin debt on the Shanghai Stock Exchange climbed to a record 1.16 trillion yuan on Thursday. When has buying overvalued stocks on margin when the economy is tanking ever gone wrong before? Have we already forgotten 2000 and 2008? Humans truly act like irrational herds of cattle stampeding in whatever direction they are pushed by their keepers.

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