Posts Tagged ‘Shanghai Composite Index’

Xie: Chinese stocks are a Ponzi scheme

Xie: Chinese stocks are a Ponzi scheme

Courtesy of Tim Iacono at The Mess That Greenspan Made

Former Morgan Stanley Chief Asia Economist Andy Xie says the Chinese stock market is still in "deep bubble territory", noting that the Shanghai Composite Index would have to fall another 25 percent to get to fair value.

 



He also noted that real estate sales account for 10 percent of GDP and half of all local government revenue. Earlier today, China’s stock market fell seven percent, the sharpest decline since June 2008, and is now down about 23 percent from the early-August peak.

 


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ANOTHER CHINA STOCK BUBBLE?

ANOTHER CHINA STOCK BUBBLE?

Courtesy of The Pragmatic Capitalist

Interesting reading here from BNP on the potential of another Chinese stock market crash.  Their approach is interesting as they come to their conclusions using components of the same theories that make up my own work.  I, however, do not believe the Chinese market is in for a crash, but rather believe the “long decay” scenario is far more likely.  It would be highly unusual for two bubbles to form in the same market in such a short period of time – especially when the fundamentals and psychology of the market’s participants don’t justify it.  In fact, it could be called an anomaly since it has never happened before.   Not to mention the fact that we are nowhere near the stampeding euphoric sentiment that always accompanies a bubble:

Amid the current financial crisis, there has been one equity index beating all others: the Shanghai Composite. Our analysis of this main Chinese equity index shows clear signatures of a bubble build up and we go on to predict its most likely crash date: July 17-27, 2009 (20%/80% quantile confidence interval).
 


China_20Bubble

It must be noted that the model gives no indication on what happens after the critical point. It tells us the rise will end, but that might be with a crash or a slow decay.

By the very nature of the model, this result gives us two conclusions. Firstly, there exists a bubble in the Shanghai Composite Index. Secondly, it will reach a critical level around July 17-27, 2009. This will lead to a change in regime which may be a crash or a more gently bubble deflation. An extended version of this note, with a careful assessment of the confidence intervals and comparisons with the previous Chinese bubble ending in Oct. 2007, will be released soon.

 


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Zero Hedge

Europe Unveils New Gun Laws: "Like Putting A Band-Aid On A Bullet Wound"

Courtesy of ZeroHedge. View original post here.

Authored by Simon Black via SovereignMan.com,

The EU has almost regulated firearms enough to keep people completely safe from terrorism. Just one more law, and they should be able to usher Europe into a new age of utopian peace.

What happened:

The European Parliament...



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ValueWalk

Six Graphs that Reveal Big Problems for Student and Auto Loans

By Mises. Originally published at ValueWalk.

Student and auto loan debt via Mises

The New York Fed’s most recent household debt report showed ballooning debt and delinquency in student and auto loans. Total household debt has just about reached its previous late-2008 high of over $12.5 trillion.

You’ll notice that housing debt (blue) has not increased much since its 2013 low, meaning that the increases in total debt have mostly come from non-housing debt (red). A closer look at the composition of non-housing debt reveals that the biggest increases in debt have come from student and auto loans (red and green, below).

In fact, the numbers make it look like the housing bubble was almost exactly replaced by new bubbles in education and cars....



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Chart School

Weekly Market Recap Mar 26, 2017

Courtesy of Blain.

Tuesday’s long overdue >1% selloff in the S&P 500 broke a very long and rare streak in the S&P 500.   The S&P 500?s streak without a 1% down day was the longest since May 18, 1995!  A marginal close lower Monday was followed by a 1.2% drop Tuesday (the NASDAQ fell 1.8% that day).

“I think that investors are kind of starting to discount the likelihood of the immediacy of [President Donald Trump’s] policies and the enthusiasm has come off the boil as a lot of his policies got mired in the legislative process,” said Jack Ablin, chief investment officer at BMO Private Bank. “Investors are not throwing in the towel but they are resetting their expectations.”

According to Bespoke, there have been only 11 instances since 1928 where the S&P 500...



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Phil's Favorites

EU Ponders Opening Its Brexit Strategy Book, Asks UK to Do the Same

Courtesy of Mish.

Here’s a negotiating strategy I am quite certain Donald Trump would never consider: EU looks at revealing negotiating positions for Brexit.

Brussels is considering publishing its main negotiating positions in Brexit talks, adopting a policy of full transparency that may wrongfoot the more secretive British side.

“The unity of the 27 will be stronger when based on full transparency and public debate,” Mr. Barnier said in a comment piece for the Financial Times. “We have nothing to hide.”

Theresa May, Britain’s prime minister, has, by contrast, said it is vital to “maintain discipline” and avoid disclosures tha...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Treasury Bears on Reflation Train Face Peaking Price Pressures (Bloomberg)

Investors need to contend with the waning impact of energy base effects on inflation and a terminal rate that lacks momentum before they can aspire to push interest rates higher.

One of Wall Street's most steadfast bulls is worried about stocks (Business Insider)

In a note sent to clients on Friday, Lee said several factors that had supported his views on the market, including attractive valuations and central-bank support, had turned neutral or possibly ne...



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Members' Corner

More Natterings

Courtesy of The Nattering Naybob

[Click on the titles for the full articles.]

A Quick $20 Trick?

Summary

Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:

  • Last time out, Sinbad The Sailor, QuickLogic.
  • GlobalFoundries, Jha, Smartron and cricket.
  • Quick money, fungible, demographics, QUIK focus.

Last Time Out

Monetary policy is just one form of policy that effects capital,...



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Kimble Charting Solutions

Fund flows of this size could mark a top, says Joe Friday

Courtesy of Chris Kimble.

A year ago flows into ETFs were extremely low, actually the lowest in years, as many stock market indices were testing rising support off the 2009 lows. The crowd wasn’t adding money to ETFs as lows were taking place. In hindsight, this was a mistake by the majority. Below I look at ETF flows over the past few years with an inset chart of the S&P 500.

CLICK ON CHART TO ENLARGE

Nearly three months into this year, fund flows have surpassed mone...



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OpTrader

Swing trading portfolio - week of March 20th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Digital Currencies

Bitcoin Tumbles Below Gold As China Tightens Regulations

Courtesy of Zero Hedge

Having rebounded rapidly from the ETF-decision disappointment, Bitcoin suffered another major setback overnight as Chinese regulators are circulating new guidelines that, if enacted, would require exchanges to verify the identity of clients and adhere to banking regulations.

A New York startup called Chainalysis estimated that roughly $2 billion of bitcoin moved out of China in 2016.

As The Wall Street Journal reports, the move to regulate bitcoin exchanges brings assurance that Chinese authorities will tolerate some level of trading, after months of uncertainty. A draft of the guidelines also indicates th...



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Mapping The Market

Congress begins rolling back Obama's broadband privacy rules

Courtesy of Jean Luc

I am trying to remember who on this board said that people wanted to Trump because they want their freedom back. Well….

Congress begins rolling back Obama's broadband privacy rules

By Daniel Cooper, Endgadget

ISPs will soon be able to sell your most private data without your consent.

As expected, Republicans in Congress have begun the process of rolling back the FCC's broadband privacy rules which prevent excessive surveillance. Arizona Republican Jeff Flake introduced a resolution to scrub the rules, using Congress' powers to invalidate recently-approved federal regulations. Reuters reports that the move has broad support, with 34 other names throwing their weight behind the res...



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Promotions

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Biotech

The Medicines Company: Insider Buying

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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