{"id":23709,"date":"2017-04-22T10:06:24","date_gmt":"2017-04-22T15:06:24","guid":{"rendered":"http:\/\/olduvai.ca\/?p=23709"},"modified":"2017-04-22T10:06:24","modified_gmt":"2017-04-22T15:06:24","slug":"is-china-trying-to-slowly-burst-another-stock-market-bubble","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=23709","title":{"rendered":"Is China Trying To (Slowly) Burst Another Stock Market Bubble?"},"content":{"rendered":"

Is China Trying To (Slowly) Burst Another Stock Market Bubble?<\/a><\/h3>\n
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The pressure point in Asian stock markets this week has been the decline in Chinese equities (the biggest weekly drop in 4 months).<\/em><\/strong><\/div>\n
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Despite a stellar performance of the economy the outlook for the Shanghai Composite Index isn\u2019t promising as the government is taking advantage of better growth to spur deleveraging<\/strong>.<\/p>\n

For a market relying more on liquidity than fundamentals, China\u2019s worsening monetary conditions index suggests tough times ahead…<\/em><\/strong><\/p>\n

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As a reminder,<\/em><\/a> the Shanghai Composite Index, notorious for its wild swings over the past two years, has gone 86 trading days without a loss of more than 1% on a closing basis<\/strong>, the longest stretch since the market\u2019s infancy in 1992.<\/div>\n<\/div>\n

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The last 4 days have highlighted the unusual effect in Chinese stocks.. each time the Shanghai Composite dropped over 1% (red dotted line) it was miraculously lifted to ensure it closed with a loss less than 1%…<\/p>\n

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As Bloomberg reports, <\/a>authorities favor a steady stock market because it helps companies fund investment and repay debt by issuing new shares, which could help boost economic growth, according to Yin Ming, a vice president at Baptized Capital in Shanghai.<\/p>\n

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\u201cThe national team is behind it,\u201d Yin said. \u201cState funds will likely continue to be a market stabilizer.\u201d<\/strong><\/p>\n<\/blockquote>\n

So one wonders, is China desperate to delever the speculative fervor in their markets… but do it just 1% at a time? Can the ‘market’ really be that well centrally planned? We will see…<\/strong><\/em><\/p>\n

If the 6-month lag in Chines commodities is anything to go by, the breakdown in Chinese stocks is nowhere near over…<\/p>\n

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Is China Trying To (Slowly) Burst Another Stock Market Bubble? The pressure point in Asian stock markets this week has been the decline in Chinese equities (the biggest weekly drop in 4 months). Despite a stellar performance of the economy the outlook for the Shanghai Composite Index isn\u2019t promising as the government is taking advantage […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[130,4315,4562,4318],"class_list":["post-23709","post","type-post","status-publish","format-standard","hentry","category-economics","tag-china","tag-shanghai-composite-index","tag-stock-market-bubble","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23709"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23709\/revisions"}],"predecessor-version":[{"id":23710,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23709\/revisions\/23710"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}