{"id":9921,"date":"2015-07-10T18:12:53","date_gmt":"2015-07-10T23:12:53","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9921"},"modified":"2015-07-10T18:12:53","modified_gmt":"2015-07-10T23:12:53","slug":"why-chinas-market-isnt-fixed-and-the-global-bubble-will-keep-imploding","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9921","title":{"rendered":"Why China\u2019s Market Isn\u2019t Fixed And The Global Bubble Will Keep Imploding"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/davidstockmanscontracorner.com\/why-chinas-market-isnt-fixed-and-the-global-bubble-will-keep-imploding\/\" target=\"_blank\">Why China\u2019s Market Isn\u2019t Fixed And The Global Bubble Will Keep Imploding<\/a><\/h3>\n<p>China\u2019s stock market is purportedly\u00a0all fixed and the\u00a0last two day\u2019s 10% bounce is just the beginning. Indeed, Goldman Sachs has already\u00a0reiterated that the whole thing is on the level, and that\u00a0the red chips\u00a0will again be taking flight:<\/p>\n<blockquote><p>China\u2019s biggest stock-market rout since 1992 has done nothing to erode the bullish outlook of Goldman Sachs Group Inc\u2026\u2026\u2026Kinger Lau, the bank\u2019s China strategist in Hong Kong, predicts the large-cap CSI 300 Index will rally 27 percent from Tuesday\u2019s close over the next 12 months as\u00a0<em><strong>government support measures<\/strong>\u00a0<\/em>boost investor confidence and monetary easing spurs economic growth. Leveraged positions aren\u2019t big enough to trigger a market collapse, Lau says, and\u00a0<em><strong>valuations have room to climb.<\/strong><\/em><\/p><\/blockquote>\n<p>Right. The Chinese economy is in an obvious\u00a0deepening swoon and the\u00a0median company on the Shanghai exchange had a PE ratio of 60X before the recent break. But no matter. Not only does everything\u00a0financial race the\u00a0skyscrapers to the sky\u00a0in the land of red capitalism, but valuation upside is apparently whatever the comrades in Beijing want it to be.<\/p>\n<p>Says Goldman\u2019s chief stock tout for\u00a0China,<strong><em>\u201cIt\u2019s not in a bubble yet.\u201d<\/em><\/strong>.<\/p>\n<p>Why? Because \u201c<em><strong>China\u2019s government<\/strong>\u00a0<\/em>has a lot of tools to support the market.\u201d<\/p>\n<p>To be sure, the confident Mr. Kinger\u00a0Lau was still in diapers when Mr. Deng proclaimed that it was glorious to be rich. Or stated differently, when\u00a0Deng set aside Mao\u2019s mistaken maxim that power comes from the barrel of a gun in favor of the thoroughly modern notion that\u00a0prosperity comes from the end of a red hot printing press.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/si.wsj.net\/public\/resources\/images\/ON-BK446_kinger_DV_20150514043508.jpg\" alt=\"\" width=\"262\" height=\"394\" \/><\/p>\n<p>Actually, that\u2019s the heart of the matter. Mr. Lau and perhaps\u00a050 million other Chinese punters believe that growth and wealth are gifts of the state. That is, they believe\u00a0red capitalism works because the comrades in Beijing are always ready to inject \u201cwhatever it takes\u201d by way of stimulus, guidance, controls, ever more debt\u00a0and now, apparently, prison sentences, too,\u00a0to keep the bubble expanding.<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Why China\u2019s Market Isn\u2019t Fixed And The Global Bubble Will Keep Imploding China\u2019s stock market is purportedly\u00a0all fixed and the\u00a0last two day\u2019s 10% bounce is just the beginning. Indeed, Goldman Sachs has already\u00a0reiterated that the whole thing is on the level, and that\u00a0the red chips\u00a0will again be taking flight: China\u2019s biggest stock-market rout since 1992 [&hellip;]<\/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":[130,7188,7186,5979,2120,376,534,7187],"class_list":["post-9921","post","type-post","status-publish","format-standard","hentry","category-economics","tag-china","tag-chinese-government","tag-chinese-market","tag-contracorner","tag-david-stockman","tag-goldman-sachs","tag-monetary-policy","tag-stock-market-bubble-china"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9921","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=9921"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9921\/revisions"}],"predecessor-version":[{"id":9922,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9921\/revisions\/9922"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}