“Large parts of the market are closed, and those stocks that are still trading are selling off regardless of support measures. Clearly something very serious is happening,” said one economist.
The long-standing assumption that the Chinese authorities know what they are doing has been shattered.
The government’s heavy-handed measures include a ban on short sales and on new share issues, as well as pressure on the 300 largest companies to buy back their own stock, and forced purchases of stocks by brokerage houses.
Many investors are effectively trapped with margin debt used to buy the stocks. These liabilities cannot be covered without selling the stocks. The longer the market remains partially frozen, the more likely it will lead to extreme stress.
The chinese market is not a market. A real market is pushed up and down on its own. Its just a list of communist- companies people buy and the communists dictate the next day's gain or loss. Stupid, a fake market.
The russians jumped into capitalism to quick and it shocked them real bad. They basically had a 20 year recession. I thought the chinese were being smarter by easing into capitalism. But now I see their mistake. They are taking baby steps but its all pretend. The booming capitalism they have is fake. So they are getting shocked after each expansion period.
Im dissapointed in both.