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Thread: Market turmoil and economic downturn in China

  1. #31
    Senior Contributor DOR's Avatar
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    Oh, I see.

    “moves to cut his reliance” means “leaving china;”
    “trimming his property portfolio” means “burn bridges to leave;” and
    “selling assets in China and Hong Kong to fund a European spending spree” means “they have fallen out of favor with Beijing.”

    Sorry, I don’t speak that language.

  2. #32
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    Quote Originally Posted by DOR View Post
    Oh, I see.

    “moves to cut his reliance” means “leaving china;”
    “trimming his property portfolio” means “burn bridges to leave;” and
    “selling assets in China and Hong Kong to fund a European spending spree” means “they have fallen out of favor with Beijing.”

    Sorry, I don’t speak that language.
    What burned bridges was switching of the domicile of his holding company. Of course that wouldn't destroy the relationships completely but certainly damages them. You don't expect unsophisticated panic from the Li's do you?

    Leaving means leave-ING. Ordered, smart, steady off loading of assets. Again, did you think it was panic selling?

    As for falling out of favor with Beijing, you seem to have missed the last quarter of the article.

    Nitpick about semantics if you will, but notice the article reached the same conclusions I did on the implications of their moves.
    Last edited by citanon; 07 Sep 15, at 06:18.

  3. #33
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    Another interesting day on the Chinese market:

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    But the market summary actually shows that 644 stocks on the Shanghai exchange rose in price, 167 stayed neutral, and 250 stocks fell.

    So, I think what happened was this: over the long weekend the Chinese regulators announced major changes to option market rules that made it much harder to short stocks. When the market opened today, the options traders were caught in a regulatory short squeeze. In an effort to cover their bets, they bid up the majority of stocks on the market. However, they had to raise funds to make the purchases and build up a cash reserve. Thus, around mid-day they started to dump their blue chips, especially banking stocks, whose prices have been driven up by the market rescue efforts of the government. This resulted in a negative run in the stock index even though most stocks actually rose.

    I could be 100% wrong but right now it looks to me like this is what happened.

    Chinese stock investors are certainly living in interesting times! Every day they are navigating unfamiliar seas, spurred on by incessant and capricious government action.

  4. #34
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    As i was saying, he probably is picking the right time to get out.

    http://shanghaiist.com/2015/09/30/li...tate_media.php

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