gattaca Posted August 24, 2015 Posted August 24, 2015 Dow Jones drops a record 1000 points down to 18 month lows Though China correction was expected , I don't recall many people predicting the US markets to drop like this 1-2 months ago . :hmmm: 20-30 % drop in US is expected. The world economy is heavily dependent on developing countries economy. Developing countries revived the world economy.
mishra Posted August 24, 2015 Posted August 24, 2015 Please China! Intervene. Spend a trillion. Atleast say you will spend if needed. American investors seems to have better sense then European ones
G_B_ Posted August 24, 2015 Posted August 24, 2015 the entire situation in china is so ****ed up people mortaged their houses to invest in the stock market which would always increase... saw such sentiment in India from 2005-2007 every people were talking 50,000 by 2010
Kalia_Test Posted August 24, 2015 Posted August 24, 2015 ^^^^ You should also check out the extremely complex share structures of China based companies. Class A shares, Class H shares and some other classes. For the same company, a certain class of shares trade in mainland China in Yuan, another class shares of same company trade in HK in some other currency and then we have a class of shares ( like Alibaba ) that trade in Nasdaq. Strict controls on currency used to buy shares in each exchange. In short, a BIG mess. Only silver lining is that ( relative to its size ), foreigners hold little in China. Most of the losses will be to its domestic investors - no wonder China is pumping in money into its stock markets ( though China Economy collapse - as opposed to its stock market crash - will have Global impact )
randomGuy Posted August 24, 2015 Posted August 24, 2015 ^^^^ You should also check out the extremely complex share structures of China based companies. Class A shares, Class H shares and some other classes. For the same company, a certain class of shares trade in mainland China in Yuan, another class shares of same company trade in HK in some other currency and then we have a class of shares ( like Alibaba ) that trade in Nasdaq. Strict controls on currency used to buy shares in each exchange. In short, a BIG mess. Only silver lining is that ( relative to its size ), foreigners hold little in China. Most of the losses will be to its domestic investors - no wonder China is pumping in money into its stock markets ( though China Economy collapse - as opposed to its stock market crash - will have Global impact ) Right. shanghai composite's market cap after crash is abt $2 trillion i guess...very small compared to the US . even with china economy collapse, commodity(including oil) producing countries are struggling. consumers like the US, europe and India are well placed.
Malcolm Merlyn Posted August 24, 2015 Posted August 24, 2015 ^^^^ You should also check out the extremely complex share structures of China based companies. Class A shares, Class H shares and some other classes. For the same company, a certain class of shares trade in mainland China in Yuan, another class shares of same company trade in HK in some other currency and then we have a class of shares ( like Alibaba ) that trade in Nasdaq. Strict controls on currency used to buy shares in each exchange. In short, a BIG mess. Only silver lining is that ( relative to its size ), foreigners hold little in China. Most of the losses will be to its domestic investors - no wonder China is pumping in money into its stock markets ( though China Economy collapse - as opposed to its stock market crash - will have Global impact ) Chinese economy may/will slow down.It wont crash.And some other country hopefully India will then drive the world economy.Also US economy is looking up so all is not lost. Rupee devaluation is a tricky thing.In face of Yuan devaluation it may not be such a bad thing.
Kalia_Test Posted August 24, 2015 Posted August 24, 2015 Chinese economy may/will slow down.It wont crash.And some other country hopefully India will then drive the world economy.Also US economy is looking up so all is not lost. Rupee devaluation is a tricky thing.In face of Yuan devaluation it may not be such a bad thing. Yep. China Economy 'crash' will be disastrous for everyone. And I am not sure India is at the scale to even meaningfully drive world economy at the moment. Maybe - it has to be a basket including India and few other countries with developed economies like US,EU and Japan playing a stabilizing role. On rupee devaluation - extremely tricky. Our 'darling' sectors are export oriented like IT/Pharma that benefit from a weak rupee but as a country we are net importers ( thanks to crude ). I don't envy RBI Governor at all. Tough job for him. However, when 'import substitutes' are possible like Defense,etc - we should aggressively pursue it through 'Make in India',etc. Crude,etc we can be accidental beneficiaries or victims and not much we can do to control but things that have import substitutes - we need real focus.
G_B_ Posted August 24, 2015 Posted August 24, 2015 ^^^^ You should also check out the extremely complex share structures of China based companies. Class A shares, Class H shares and some other classes. For the same company, a certain class of shares trade in mainland China in Yuan, another class shares of same company trade in HK in some other currency and then we have a class of shares ( like Alibaba ) that trade in Nasdaq. Strict controls on currency used to buy shares in each exchange. In short, a BIG mess. Only silver lining is that ( relative to its size ), foreigners hold little in China. Most of the losses will be to its domestic investors - no wonder China is pumping in money into its stock markets ( though China Economy collapse - as opposed to its stock market crash - will have Global impact ) yeah i read that a while back...
G_B_ Posted August 24, 2015 Posted August 24, 2015 Chinese economy may/will slow down.It wont crash.And some other country hopefully India will then drive the world economy.Also US economy is looking up so all is not lost. Rupee devaluation is a tricky thing.In face of Yuan devaluation it may not be such a bad thing. Rajan may as well cut rates now... even though rupee is falling most commodities India imports are falling even faster.... Take brent crude, is china is slowing down and iran is pumping more clearly the supply and demand makes it much cheaper.
maniac Posted August 24, 2015 Posted August 24, 2015 Chinese economy may/will slow down.It wont crash.And some other country hopefully India will then drive the world economy.Also US economy is looking up so all is not lost. Rupee devaluation is a tricky thing.In face of Yuan devaluation it may not be such a bad thing. Love your patriotism :two_thumbs_up: but the truth is not going to happen at least for the next 10-15 years.
maniac Posted August 24, 2015 Posted August 24, 2015 Looked like this morning that we were heading for another 2008 never say never tricky next 2 days
Kalia_Test Posted August 24, 2015 Posted August 24, 2015 Looked this morning that we were heading for another 2008 never say never tricky next 2 days You can always come back to Kakinada and pick up a job with Reliance in KG basin :P
amiret Posted August 24, 2015 Author Posted August 24, 2015 Last year around October we witnessed a similar sell-off. The Dow crashed to 15,800 last October along-with the European markets but the bounce back was swift. , Nifty fell to 7748 but bounced back up during Diwali . This time the mood is more bearish. WSJ : The conflagration now engulfing emerging markets was a long time in the making. Bad news from China provided the spark. As anxieties about the world’s No. 2 economy mount, investors are pulling money from the developing countries that feed China’s vast industrial machine with natural resources. Indonesia, Malaysia, South Africa and other commodity exporters have seen their currencies tumble to multiyear lows against the U.S. dollar, limiting their central banks’ scope to cut interest rates and revive lagging economies. Governments also failed to reorient, during the years of plenty, away from raw materials and toward economic activities, such as manufacturing, that would benefit from a weaker currency. Clouds had been gathering for months.Anticipating a Federal Reserve interest-rate increase, investors have been steadily repatriating funds to safer shores, causing the U.S. dollar to begin strengthening against some emerging-market currencies in 2013. Global money managers pulled $26 billion out of emerging-market stocks and bonds between Jan. 1 and July 31, according to data from EPFR Global, a company that tracks fund flows around the world.
Precambrian Posted August 25, 2015 Posted August 25, 2015 One thread, I must admit, amiret had it bang on!
CG Posted August 25, 2015 Posted August 25, 2015 I think we will see 7500 level soon .There is short buildup .
mishra Posted August 25, 2015 Posted August 25, 2015 Right. shanghai composite's market cap after crash is abt $2 trillion i guess...very small compared to the US . even with china economy collapse, commodity(including oil) producing countries are struggling. consumers like the US, europe and India are well placed. Its allready near 1999 level. Some analysts were predicting oil to go into early 30s/late 20s once Iran comes into picture. Gives India and rest of growing economy a lot of leg room to devalue their currency.
mishra Posted August 25, 2015 Posted August 25, 2015 One thread' date=' I must admit, amiret had it bang on![/quote'] China is sitting on about 4 trillion reserve. It can change the dynamics any day.
biglebowski Posted August 25, 2015 Posted August 25, 2015 China is sitting on about 4 trillion reserve. It can change the dynamics any day. almost 1 trillion is in illiquid assets , and china can't use its remaining foreign reserves just like that it has got 1.25 trillion usd worth of us treasury bonds, to use it it needs to liquidate it which will be a catastrophic for itself ( if china shows its desperation to sell its bonds , shorter will drive the prices down )
randomGuy Posted August 25, 2015 Posted August 25, 2015 Its allready near 1999 level. Some analysts were predicting oil to go into early 30s/late 20s once Iran comes into picture. Gives India and rest of growing economy a lot of leg room to devalue their currency. In today's world I would say china is relatively insignificant to markets...not in control of its economy, has a bogus stock market , only exporting (a bit of) deflation to the world.... Edit: regarding oil, India's demand is ever increasing..so nothing can be better than low prices...it will most probably be back at 60 dollars in a year since most producers are said to be breaking even only at 40-60 dollars.
Kalia_Test Posted August 25, 2015 Posted August 25, 2015 Just in - China cuts Interest Rates. Is it good? :hmmm:
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