View Full Version : The sky is falling..
Voodoochild
07-08-15, 07:52
At least in China it is. Their stock market is taking a giant dump and it was completely predictable. They have been playing shenanigans for a long time.
I just hope none of the results from this washes up over here.. China in many ways is a giant lie, Looks like we may find out just how big the lie actually is.
http://i1328.photobucket.com/albums/w522/mtjh45/jenga_zpsvrv1o7bg.jpg
Whiskey_Bravo
07-08-15, 08:57
Over half of their stocks are not even trading as the crash continues to get worse.
http://money.cnn.com/2015/07/08/investing/china-stocks-suspended/index.html?iid=surge-stack-dom
http://money.cnn.com/2015/07/07/investing/china-stocks-shanghai-crash/index.html?iid=hp-stack-dom
At least 1,430 of the 2,800 companies traded in China have elected to pull their shares as markets continue their crazy roller-coaster ride, according to state media.
The number keeps ticking upward -- on Wednesday morning alone, hundreds of firms announced a halt in trading, according to a review of stock exchange filings.
The Shanghai Composite plunged 8% at the market open on Wednesday, and spent the entire day in negative territory before closing down 5.9%. The vast majority of stocks listed on the benchmark index shed 10%, the maximum limit shares are allowed to fall before being halted.
Gold and other metals taking a hit as well.
http://money.cnn.com/2015/07/07/investing/china-gold-copper-greece/index.html
Chaos has gripped Chinese stocks in recent weeks, sending the previously red-hot market nose diving 25%. The ferocious selling has forced investors who bought stocks with borrowed money to pay back loans by dumping other assets -- including gold and other commodities.
Doc Safari
07-08-15, 09:02
I have been watching this for years. Most analysts are predicting that it IS coming this way, and by fall we will have a crash that makes 2008 look like a warmup.
The parallels to China now with 1929 US is astounding.
See Whiskey Bravo's post.
The 1929 event most certainly affected the rest of the world. The world was much less interconnected then. I fail to see where there is a circumstance where we are not affected, at least minimally.
Whiskey_Bravo
07-08-15, 09:20
Dow is down a little over 200 points right now so I am assuming we are seeing some of it.
MountainRaven
07-08-15, 09:20
I have been watching this for years. Most analysts are predicting that it IS coming this way, and by fall we will have a crash that makes 2008 look like a warmup.
How far do you think Obama and our Congresscritters will go to avert that doom?
Doc Safari
07-08-15, 09:28
How far do you think Obama and our Congresscritters will go to avert that doom?
What can they do? They're already printing money. They can't just print more money.
How far do you think Obama and our Congresscritters will go to avert that doom?
Avert?
The doom is what the want. Chaos brings them power.
What can they do? They're already printing money. They can't just print more money.
Why not? It has not produced the catastrophic inflation that was predicted--- yet.
Just throwing this out there... what can a person who has real assets on the mainland do? Specifically real estate which has been propped up by municipal governments for a few years now. Even if one were to sell the asset, it's not easy to convert large amounts into foreign currency, or to exit it from the country. There are ceilings to how much can leave per person. If you're one of the rare middle class Chinese, middle aged, is there really anywhere for you to go?
Why not? It has not produced the catastrophic inflation that was predicted--- yet.
"yet" being the important part..You can't keep printing money that is backed by nothing but blind faith forever. At some point, people will figure out that it has no real value, and all faith in it will be lost. Once that faith is lost, it can NEVER be regained. Every dollar that's printed is worth less than the one printed before it.. At some point, (I think soon) all these dollars that the U.S. flooded the world with will come back, like a giant tidal wave, when faith in the dollar is lost..
Doc Safari
07-08-15, 09:58
"yet" being the important part..You can't keep printing money that is backed by nothing but blind faith forever. At some point, people will figure out that it has no real value, and all faith in it will be lost. Once that faith is lost, it can NEVER be regained. Every dollar that's printed is worth less than the one printed before it.. At some point, (I think soon) all these dollars that the U.S. flooded the world with will come back, like a giant tidal wave, when faith in the dollar is lost..
What we have going for us right now is all the news stories of people in Greece being unable to get their money out of the banks. I guarantee this will cause people worldwide to try to keep more cash on hand. I've already altered my long-range plans: whatever money I have left at the end of the month is not staying in the bank. I may just develop a rule of thumb that every time I have accumulated $500 above and beyond my expenses, I'm taking it out in cash.
Avert?
The doom is what the want. Chaos brings them power.
Ding! Ding! Ding! Winner, Winner, chicken dinner!!!
What we have going for us right now is all the news stories of people in Greece being unable to get their money out of the banks. I guarantee this will cause people worldwide to try to keep more cash on hand. I've already altered my long-range plans: whatever money I have left at the end of the month is not staying in the bank. I may just develop a rule of thumb that every time I have accumulated $500 above and beyond my expenses, I'm taking it out in cash.
While I agree with you. I'd consider putting part (not all of it) of that extra money into say, silver, (as it's very affordable right now) or possibly gold. (not so affordable) Neither gold or silver has ever went to zero value.. History is full of examples of fiat currency's that have.. Also don't forget that there's a concerted effort being made to go cashless, so, any extra cash you have hid would be worthless in that event.
Just throwing this out there... what can a person who has real assets on the mainland do? Specifically real estate which has been propped up by municipal governments for a few years now. Even if one were to sell the asset, it's not easy to convert large amounts into foreign currency, or to exit it from the country. There are ceilings to how much can leave per person. If you're one of the rare middle class Chinese, middle aged, is there really anywhere for you to go?
The bottom line for those people is that they're going to get bent over..
Straight Shooter
07-08-15, 10:09
I just hope none of the results from this washes up over here.. China in many ways is a giant lie, Looks like we may find out just how big the lie actually is.
And...we aint?!
Straight Shooter
07-08-15, 10:10
http://i1328.photobucket.com/albums/w522/mtjh45/jenga_zpsvrv1o7bg.jpg
You've been SPOT ON here lately sir....no pic sums it up better.
And...we aint?!
Oh, we most definitely are.. It's a toss up as to who is the biggest liar...But, I suspect we're about to find out. Hang on to your hats, folks.. The ride is about to get rough..
Whiskey_Bravo
07-08-15, 10:45
Trading halted at NYSE due to "technical" issues?
http://www.cnbc.com/id/102806720
Outlander Systems
07-08-15, 11:01
Trading halted at NYSE due to "technical" issues?
http://www.cnbc.com/id/102806720
http://wsj.com/
Offline.
Whiskey_Bravo
07-08-15, 11:40
Cyber attack by the Chinese?
WSJ, Stock Exchange and United Airlines. Hmmm. A coincidence, chance occurance or Chicom :)
Check out this live cyber attack map:
http://map.norsecorp.com/
Doc Safari
07-08-15, 11:50
WSJ, Stock Exchange and United Airlines. Hmmm. A coincidence, chance occurance or Chicom :)
Check out this live cyber attack map:
http://map.norsecorp.com/
That's scary. Just what is that supposed to be, exactly?
Interesting map, China is quite busy today. I think I'll change my security cam port 8080..;)
Well I suppose mass inflation would make my fixed rate student loans easier to pay off. Joyous.
Outlander Systems
07-08-15, 12:54
That's scary. Just what is that supposed to be, exactly?
Financial WMD's.
http://wsj.com/
Offline.
If I had to guess, those who are in charge of rigging the casino, er, ahh, Wall St, shut it down before selling got out of hand... I figure they're in a room somewhere trying to figure out what to do next..
It looks like it's back up, (2:45pm) and down 279 points and was dropping as I type this.. Hang on, the fun's just getting ready to start....
Whiskey_Bravo
07-08-15, 13:52
Seems like an awful long time to be down due to a glitch?
Seems like an awful long time to be down due to a glitch?
I agree.. I guess it could be nothing more than a server going down or it could be something far worse, I don't really know. Does it have anything to do with China's stock market?? I think so.. and this could be bad..Alot of people have pointed out that if the American market were to crash, it would take the Chinese with them.. If that's possible, (I think it would be) I'd guess the reverse is also likely..
Tech glitch my ass. I can't fathom the amount of redundancy the SE has for managing that volume of data.
Sent from my iPhone using Tapatalk
WickedWillis
07-08-15, 14:12
Well, let's consider the other things that have happened so far today as well, From Gawker (Yeah, that site)
The New York City subway system suffered an atrocious commute today, with some trains being inexplicably stranded in stations for long periods of time.
The website “The Dissolve” folded today.
United Airlines was forced to ground all of its flights after its computer system mysteriously stopped working.
The New York Stock Exchange suspended trading today after its computerized trading system mysteriously stopped working.
Immediately after, the Wall Street Journal’s website mysteriously stopped working.
More than 2,500 people in Washington, DC mysteriously lost power.
skijunkie55
07-08-15, 14:21
https://youtu.be/Z0GFRcFm-aY?t=51s
Well, let's consider the other things that have happened so far today as well, From Gawker (Yeah, that site)
The New York City subway system suffered an atrocious commute today, with some trains being inexplicably stranded in stations for long periods of time.
The website “The Dissolve” folded today.
United Airlines was forced to ground all of its flights after its computer system mysteriously stopped working.
The New York Stock Exchange suspended trading today after its computerized trading system mysteriously stopped working.
Immediately after, the Wall Street Journal’s website mysteriously stopped working.
More than 2,500 people in Washington, DC mysteriously lost power.
Interesting...I wonder does all this have anything to do with each other, or is it all a coincidence??
WickedWillis
07-08-15, 14:42
Interesting...I wonder does all this have anything to do with each other, or is it all a coincidence??
I think there might have been some cyber attacks that the media isn't talking about.
Whiskey_Bravo
07-08-15, 15:36
Interesting post by Anonymous supposedly from last night.
http://www.theblaze.com/stories/2015/07/08/this-is-the-message-anonymous-posted-last-night-before-the-new-york-stock-exchange-outage/
Wonder if tomorrow is going to be bad for Wall Street.... we can only hope.
I have been watching this for years. Most analysts are predicting that it IS coming this way, and by fall we will have a crash that makes 2008 look like a warmup.
Perhaps the rumored misery coming our way in Sept.??
Outlander Systems
07-08-15, 16:46
Perhaps the rumored misery coming our way in Sept.??
Wouldn't surprise me at all.
Interesting post by Anonymous supposedly from last night.
http://www.theblaze.com/stories/2015/07/08/this-is-the-message-anonymous-posted-last-night-before-the-new-york-stock-exchange-outage/
Newsflash from WH: "nothing to see here, move along" *sarcasm*
Outlander Systems
07-08-15, 17:42
Newsflash from WH: "nothing to see here, move along" *sarcasm*
This was definitely "workplace violence."
Wouldn't surprise me at all.
Me either, there's been too many stock analyst's saying this for quite awhile, (Just go over to David Stockman's contra corner for example and start reading) and now it's beginning to look like their predictions are coming true.. I was really hoping they were wrong, and I wouldn't have to live through a depression worse than 1929. My parents, as kids, and their parents (my grandparents) went through the last one. Talking to them about it, it didn't sound like fun.. My Grandfather on my mom's side never trusted banks after that...
Outlander Systems
07-08-15, 19:05
Me either, there's been too many stock analyst's saying this for quite awhile, (Just go over to David Stockman's contra corner for example and start reading) and now it's beginning to look like their predictions are coming true.. I was really hoping they were wrong, and I wouldn't have to live through a depression worse than 1929. My parents, as kids, and their parents (my grandparents) went through the last one. Talking to them about it, it didn't sound like fun.. My Grandfather on my mom's side never trusted banks after that...
Stockman is a champion. His latest article cuts through the all the troika's mouthpieces' bullshit.
My brother and I were discussing this last night. One of the topics that came up was how we both missed Bob Chapman. Bear in mind, Chapman's "Quadrillion-Dollar Derivative Death Star" hasn't popped...yet.
I am curious to see how much of this spills over here. The rational portion of my mind wants to hold to the fact that a LOT of folks are going to be seeking refuge in the USD.
That being said, due to all the tomfoolery, chicanery, and hornswagling going on behind closed doors, we have no idea how much leveraging has been done, and whether there is a Sheissesturm of CDS heading our way, or a swirling black hole of counterparty risk culminating in the greatest series of cascading cross-defaults in the history of the universe.
Stockman is a champion. His latest article cuts through the all the troika's mouthpieces' bullshit.
My brother and I were discussing this last night. One of the topics that came up was how we both missed Bob Chapman. Bear in mind, Chapman's "Quadrillion-Dollar Derivative Death Star" hasn't popped...yet.
I am curious to see how much of this spills over here. The rational portion of my mind wants to hold to the fact that a LOT of folks are going to be seeking refuge in the USD.
That being said, due to all the tomfoolery, chicanery, and hornswagling going on behind closed doors, we have no idea how much leveraging has been done, and whether there is a Sheissesturm of CDS heading our way, or a swirling black hole of counterparty risk culminating in the greatest series of cascading cross-defaults in the history of the universe.
If you have some spare time, Maybe go over to www.usawatchdog.com Greg Hunter runs that site, There's a good article up right now by Karl Denninger, Watch the video interview at the end of the article (if you have time,it 29 minutes long but, IMO worth it) Denninger does a great job of breaking things down so that's it's easily understood.
"The really worrying financial crisis is happening in China, not Greece"
"China looks like it is heading for its version of the 1929 stock market crash."
http://www.telegraph.co.uk/finance/china-business/11725236/The-really-worrying-financial-crisis-is-happening-in-China-not-Greece.html
https://www.youtube.com/watch?v=UYnySGM9dQA
Eurodriver
07-09-15, 06:14
I hate conspiracy theorists; I try my best not to sound like one.
But in a country like China...is it really a conspiracy if the state runs the markets?
http://www.marketwatch.com/story/china-gains-gather-pace-2015-07-09?siteid=rss
Chinese shares made their biggest daily gain in six years Thursday, restoring confidence in Beijing’s suite of attempts to rescue its struggling stock market.
The Shanghai Composite SHCOMP, +5.76% 5.8% to 3709.33, after losses in eight of the last 10 trading days. The smaller Shenzhen market 399106, +3.76% rose 3.8%. Still, both indexes have lost around a third of their value in the past month. The small-cap ChiNext board 399006, +3.03% , which has shed some 38% from its June highs, rose 3%.
Some companies that had halted trading of their shares lifted suspensions, and their stock prices immediately rose by the maximum 10%. These include Hangzhou Iron & Steel Co., Zhejiang Huahai Pharmaceutical Co. and Leshi Internet Information and Technology Corp. Beijing. A total of 1,473 companies, or 51.1% of all stocks on the Shanghai and Shenzhen markets, remain suspended.
Uhhh...you shut down the stock market because everything is nose diving the maximum 10%, and when you reopen it immediately surges 10% in the other direction?
Outlander Systems
07-09-15, 06:55
No conspiracy mah brotha.
Think of what a top does, right before it falls...it teeters back and forth...
I hate conspiracy theorists; I try my best not to sound like one.
But in a country like China...is it really a conspiracy if the state runs the markets?
http://www.marketwatch.com/story/china-gains-gather-pace-2015-07-09?siteid=rss
Uhhh...you shut down the stock market because everything is nose diving the maximum 10%, and when you reopen it immediately surges 10% in the other direction?
WSJ, Stock Exchange and United Airlines. Hmmm. A coincidence, chance occurance or Chicom :)
Check out this live cyber attack map:
http://map.norsecorp.com/
What in the world is in Missouri area that all those attacks are going to?
skijunkie55
07-09-15, 08:23
What in the world is in Missouri area that all those attacks are going to?
http://www.archives.gov/st-louis/
The National Archives at St. Louis is home to the largest
Federal records collection outside of NARA’s Washington,
DC, and College Park, Maryland, locations. The St.
Louis facilities hold more than a 100 million civilian
and military personnel records dating back to the 19th
century. These records tell the story of American men
and women who served this country, some of whom
rose to national and international prominence as civilian
employees or members of the military. Visitors will find
the civilian and military records of former Presidents,
other political leaders, wartime heroes, famous athletes,
entertainers, artists, writers, scientists, journalists, and a
host of other professionals.
Crow Hunter
07-09-15, 08:51
At least in China it is. Their stock market is taking a giant dump and it was completely predictable. They have been playing shenanigans for a long time.
Guys.
You have to take this in context.
The Chinese market is up like 100+% in the last year. So even a 30% drop still means a 70% gain for people that invested last year.
Also, this is only Chinese A shares. No one outside of China can invest in theses shares due to Chinese law. H shares, which can be invested in by non Chinese are on a different exchange and they really haven't moved much at all.
You always have to look at the data.
There are definitely some parallels with the "Roaring 20's" in the US but it is fairly isolated to just the Chinese themselves right now.
Hopefully the global market will take this as a wakeup call that going "all in" in China is a bad idea. They don't have robust markets and they don't use a Anglo-Dutch economic laws. Which means it isn't efficient and it isn't transparent and it isn't what people are used to in NYSE or NASDAQ or FTSE or DAX.
brickboy240
07-09-15, 12:18
But it sounds scarier and makes better headlines if they make it out to be like the 1929 US market crash.
LOL
Guys.
You have to take this in context.
The Chinese market is up like 100+% in the last year. So even a 30% drop still means a 70% gain for people that invested last year.
Also, this is only Chinese A shares. No one outside of China can invest in theses shares due to Chinese law. H shares, which can be invested in by non Chinese are on a different exchange and they really haven't moved much at all.
You always have to look at the data.
There are definitely some parallels with the "Roaring 20's" in the US but it is fairly isolated to just the Chinese themselves right now.
Hopefully the global market will take this as a wakeup call that going "all in" in China is a bad idea. They don't have robust markets and they don't use a Anglo-Dutch economic laws. Which means it isn't efficient and it isn't transparent and it isn't what people are used to in NYSE or NASDAQ or FTSE or DAX.
Since you have a better understanding of all this than I do, I submit this question to you.
What happens if these companies that aren't internationally traded make key components for U.S. companies but end up going belly up? That could possibly cause businesses here to shut down or cut production which would result in more unemployed people which wouldn't be good for our economy, right?
Or what if China panics and decides to demand payment on our debt they bought?
Any of that a possibility?
wildcard600
07-09-15, 18:15
Since you have a better understanding of all this than I do, I submit this question to you.
What happens if these companies that aren't internationally traded make key components for U.S. companies but end up going belly up? That could possibly cause businesses here to shut down or cut production which would result in more unemployed people which wouldn't be good for our economy, right?
Or what if China panics and decides to demand payment on our debt they bought?
Any of that a possibility?
I saw it explained somewhere once that China only owned US bonds, which cannot be called on a whim. Could be wrong however.
sandsunsurf
07-09-15, 18:41
Guys.
You have to take this in context.
The Chinese market is up like 100+% in the last year. So even a 30% drop still means a 70% gain for people that invested last year.
I won't pretend to know or understand the Chinese markets, but the math is a little more gloomy. Using those rough percentages, the gains are reduced to only 40%
Example: $100 invested, 100% gain = $200 value. 30% loss of $200 is $60, so investor now has $140 value.
Sent from my iPhone using Tapatalk
skijunkie55
07-09-15, 21:11
I saw a figure somewhere that Chinese markets lost somewhere in the $3.25 trillion range since June...
That's a lot of yuan*.
Crow Hunter
07-09-15, 21:52
Since you have a better understanding of all this than I do, I submit this question to you.
What happens if these companies that aren't internationally traded make key components for U.S. companies but end up going belly up? That could possibly cause businesses here to shut down or cut production which would result in more unemployed people which wouldn't be good for our economy, right?
Or what if China panics and decides to demand payment on our debt they bought?
Any of that a possibility?
Thanks for the vote of confidence. I don't really know that much.:cool:
But I will answer to the best of my knowledge that I have gleaned from my favorite investing boards.
Once a share of a company is sold (in an IPO), it doesn't matter to them, directly, what happens to share price. Just because a company's share price goes down, it doesn't mean that it will directly affect the company's day to day operations. Eventually, the share owners, may take action and fire everyone if their share price doesn't go up but a $100 share IPO that goes up to $200 and then drops to $140 isn't very likely to affect the company directly unless they were planning on doing another stock sell to generate more capital at a higher share price. However, it will cream people that got caught up in the excitement and bought it at $189/share and it will absolutely destroy people who took out margin loans and bought it at a high share price but most of the time the worst thing that happens to a company when their stocks take a hit is that it makes it harder for them to get a good price on their next attempt to get more capital by releasing stocks. Some companies, that are flush in cash, might even see this as a good thing. They could then buy back some of their own shares and actually drive up the price. Particularly if their CEOs happen to have a lot of RSU's or other deferred compensation plans that could benefit from having higher stock prices. Capital markets are really, really complex and I really don't understand them that well myself but having a big stock market sell off generally won't cause a company to go belly up.
You can't really call in US Government Treasury Bonds (or any sovereign bonds to the best of my knowledge). They have a fixed maturity. You buy a 10 year T-bill, in 10 years you will get your principal back plus whatever interest rate you bought it at. They aren't callable by you or I.
However, they could decide to start selling all their T-bills which would flood the market with what is considered "safe haven" investments. This could hurt the US by causing us to need to raise interest rates to compensate. For instance if the current US 10yr T-bill is 2% and the Chinese have a whole bunch of T-bills of various maturities that have a Yield to Maturity (YTM) of 5% that the dump on the market, no one will want to buy current T-bills at 2%. So the US will have to raise our interest rates so we can actually borrow money from outside sources.
The problem with that scenario is the way the Chinese keep their currency artificially low is by buying our T-bills. So they wouldn't be helping themselves by doing that at all. Especially since they are getting their interest in USD.
It is really WAY more complicated than that, but that is the way I understand it.
The biggest problem with this problem in China is that panics are contagious like a zombie outbreak. One person sells their stock which causes the price to drop which causes someone else to panic and sell theirs until companies and even entire industries become "infected" and stocks which previously were valued at $200/share are now worth $140 and no one wants to be the guy left holding the $100/share IPO that is now worth $50/share. Then no one wants to put any money into the stock market so everyone puts their cash in the bank. Then the government/banks start lowering interest rates until some adventurous souls start buying stocks again. Then more people start investing, then still more people see that other people are getting rich because they bought when no one else would and the money starts pouring in again and the cycle starts back over. :)
In the meantime though, companies can't get any capital because no one wants to take the risk of the stock market (liquidity problem) so you get stagnation. Which can get into a death spiral that takes something big to restart everything.
Eventually, it always seems to return to the mean. (Or at least it has in the last 170 years or so) That can take 2 or 3 years or it can take 20 years (like Japan). That is the stock market gamble.
That is also why you MUST diversify and not put all your investments into one thing. The best description I heard was that you needed to be investing in at least one thing that you didn't like the performance of. That way you were always buying what is down.
Being diversified in Domestic stock, International stock, Bonds, Cash, precious metals, real estate means that for instance right now, when everyone is panicking and jumping out of International and buying US Bonds, you can sell Bonds and buy more International. When the tide eventually runs back the other way, you will have earned a premium and you can sell International and buy more US bonds because the pendulum will undoubtedly swing back the other way.
Holy crap I am long winded. I am worse in person.:rolleyes:
Crow Hunter
07-09-15, 21:56
I won't pretend to know or understand the Chinese markets, but the math is a little more gloomy. Using those rough percentages, the gains are reduced to only 40%
Example: $100 invested, 100% gain = $200 value. 30% loss of $200 is $60, so investor now has $140 value.
Sent from my iPhone using Tapatalk
I agree, but if someone was wise, and had an appropriate asset allocation (don't bet the whole farm on Alibaba), then they probably rebalanced and "locked in" a very big portion of those gains in non-correlated assets. Like US stocks, commodities, Real estate, US Bonds, etc.
If they didn't, I bet they will next time.;)
Moose-Knuckle
07-10-15, 02:17
Whoa, you guys had me nervous there for a minute. But thankfully Bruce Jenner and all of his oops I mean HER daughter's, and step-daughter's Twitter feeds are still up and running . . .
Eurodriver
07-10-15, 06:42
Holy crap I am long winded. I am worse in person.:rolleyes:
This is a very good post. Well written, informative, but not information overload. Thanks for that.
Crow Hunter
07-10-15, 08:48
This is a very good post. Well written, informative, but not information overload. Thanks for that.
Thank you! :D
An accountant telling an engineer they said something good about financials....
Wow.
I think I just heard a flying pig land on top of the building.:jester:
Eurodriver
07-12-15, 06:34
An accountant telling an engineer they said something good about financials....
That's how I know it's well written and informative. :cool:
Holy crap I am long winded. I am worse in person.:rolleyes:
Very good layman's explanation.
The short version I happen to believe is that China will never dump our bonds, call other US debts, as it would hurt them far more than us.
It would be like declaring war, and unless they are ready to do so, they won't.
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