Chinese Market Implosion

Yeah, when you can buy a share of X in one market for 100 and the very same share of X in a captive market one province over for 200 it is just human psycology, a 100% premium over a free markets free market price discover is no bubble, right?

By the way, the new China futures is based on the price of A shares in the free market not in the captive Shanghai market so don't expect it to trade like Shanghai or fall with the same magnitude that Shanghai will if there is ever and easy way to arb between the two markets.
 
Chinese goverment has reiterated for the second time within one week in all national media that all investors should bear the potential risks that buying stock can cause.

Apparantly around 4000 points is the bottomline of the bubble the government would tolerate. I expect severe policy to be published this weekend, chinese government always make multiple warnings before they push out severe policies.
 
Quote from joesan:

Chinese goverment has reiterated for the second time within one week in all national media that all investors should bear the potential risks that buying stock can cause.

Apparantly around 4000 points is the bottomline of the bubble the government would tolerate. I expect severe policy to be published this weekend, chinese government always make multiple warnings before they push out severe policies.
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You're right, they do warn a few times and then over the weekend they seem to usually do their business.

Is there anything similar to the VIX regarding Chinese stocks? Anyone? :D
 
No, not at this point. There is no option in China now, and the concept of trading volatility is literally unknown to the majority of the investors.



Quote from SiSePuede!:


Is there anything similar to the VIX regarding Chinese stocks? Anyone? :D
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Did anybody happen to read the story on the front of today's journal regarding a "chinese investor" who invested 30k into a stock based on the price having a bunch of "8's" in it because the number 8 happens to be extremely lucky?? He's up 50k on the investment and he attributes it to the "8's"... i think he might be on to something.
 
Quote from stock_trad3r:

The may be NO china bubble

has that ever occurred to anyone?

Look at the Dow..it has risen from 1000 to 10000 in the span of a decade and it didnt implode
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There IS a big bubble.

P/E ratios of Chinese stocks are as high as 50 or even 75.
 
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