Is it just me...

[DemonD]

Or am I the only person in the world who has noticed and is getting his spidey sense that something is going terribly wrong in China with their stock market now in a full-blown bubble frenzy and parabolic increases in share price and P/E ratios on the shanghai index?

In case anyone cares to see some numbers, here is the 52 week range for SSEC (Shanghai composite index): 52wk Range: 1,512.52 - 4,081.43

67 year old grandfathers mortgaging their house to put into the chinese stock market.

I keep flashing back to the stock chart of the Nikkei in 1990 where it shot up from 22,000 - 37,000 over a period of 2 years then fell off a cliff, not to mention the nasdaq bubble and the 1987 stock market loss in the US. Except the chinese market seems to be hitting an even steeper curve.

Anyone else out there getting the creeps from this?

[grapejelly]

Re: Is it just me...

well sure. But we have to remind ourselves: it can go a lot further up and a lot more crazy than we can even dream of.

One issue in this mania is that the Chinese don't have other good investment vehicles. Bonds pay under 3% I have read. And they do have a lot of savings.

[bill]

Re: Is it just me...

Mark Faber Said in 5-15-07 report:

"The Shenzhen and Shanghai stock markets have risen by between 50% and 100% and for gamblers they have become a major competitor to Macao where growth is now slowing down."

[flow5]

Re: Is it just me...

Didn't China intentionally decide to allow funds that were previously restricted from stock investments, to now be invested in stocks, bonds, etc.?

Or maybe its the other way around: Measure adopted to cool stock market
http://www.newsgd.com/business/laws/200703210051.htm

Peoples Bank of China
http://www.pbc.gov.cn/english/detail.asp?col=6800&ID=52

CBRC China Banking Regulatory Commission
http://www.cbrc.gov.cn/english/home/jsp/index.jsp

The Shanghai Stock Exchange (SSE) SSE Indices, quotes, summaries, data
http://www.sse.com.cn/sseportal/en_us/ps/about/bi.shtml

China Securities Regulatory Commission (english)
http://211.154.210.238/en/homepage/index_en.jsp

January 2007:

Article 180 of the new law gives the CSRC power to freeze funds, securities and other assets involved in illegal securities transactions if there is danger that those under investigation will transfer or conceal the assets. The law also gives the commission similar seizure powers if they believe those under investigation might tamper or destroy evidence.

The new law reinforces the liability of officers and directors by holding them responsible for the content of public filings
Similarly, the new law makes investment-consulting firms liable for false or misleading information disseminated through the media.
----------------------------------------------------------------------------------------------------------------------

Regulators: China Accounting Standards Committee (CASC)

The advisory body for Chinese accounting standards. The aim of the Committee is to provide advices and recommendations on setting and improving Chinese accounting standards.

China Aggregate Bond Index

Developed by Xinhua Finance and Lehman Brothers, the China Aggregate Bond Index covers both local stock exchange bonds and interbank exchange bonds.

China Association of Banks (CAB)

The CAB main functions are to facilitate self-regulation among banks, eliminate malicious competition, ensure that members are abiding by the industry laws and regulations, and provide value-added services such as training and seminars for members. The association helps resolve disputes among its members, enhance cooperation among Chinese and foreign banks, and foster closer relationships between its members and the People’s Bank of China (PBC).

China Banking Regulatory Commission (CBRC)

The government agency that supervises financial institutions, ensuring the stability of operations and helping avoid excessive financial risk.

China Foreign Exchange Trade System (CFETS)

An electronic bidding system for matching spot trading of the RMB against USD, HKD, and JPY.

China Government Securities Depository Trust & Clearing Co. Ltd. (CDC)

A state-owned nonbank financial institution providing custody, clearing, and settlement of bonds and other fixed-income securities. Authorized by Ministry of Finance and the People's Bank of China, CDC is responsible for government bond custody, bond registration, trust, and settlement in the interbank bond market.

China Securities Regulation Commission (CSRC)

Supervises and regulates securities and futures markets. CSRC licenses securities companies/dealers of listed stocks and bonds, investment advisers, fund management companies, and Qualified Foreign Institutional Investors. It also helps draft laws and regulations for PRC's securities markets.

The US-China Business Council
http://www.uschina.org/info/

Trade, Economy, Foreign Investment, Finance, Manufacturing, Business Forum Reports, etc.

[Spartacus]

Re: Is it just me...

yes, it's only you.

Drink a few beers, take a nap and it will look better in the morning.

Seriously, though ...

You can't blame the Chinese as much as you could blame US Real Estate investors. This latter group saw a bubble collapse just 5 years ago.

China has not seen a bubble collapse in 3 generations.

Or am I the only person in the world who has noticed and is getting his spidey sense that something is going terribly wrong in China with their stock market now in a full-blown bubble frenzy and parabolic increases in share price and P/E ratios on the shanghai index?

In case anyone cares to see some numbers, here is the 52 week range for SSEC (Shanghai composite index): 52wk Range: 1,512.52 - 4,081.43

67 year old grandfathers mortgaging their house to put into the chinese stock market.

I keep flashing back to the stock chart of the Nikkei in 1990 where it shot up from 22,000 - 37,000 over a period of 2 years then fell off a cliff, not to mention the nasdaq bubble and the 1987 stock market loss in the US. Except the chinese market seems to be hitting an even steeper curve.

Anyone else out there getting the creeps from this?

[Mega]

Re: Is it just me...

Thats it, spot on.......we seen recessions etc, we remember 87.....But China will not know of such things....this is going to hit HARD!
Mike

[Finster]

Re: Is it just me...

Or am I the only person in the world who has noticed and is getting his spidey sense that something is going terribly wrong in China with their stock market now in a full-blown bubble frenzy and parabolic increases in share price and P/E ratios on the shanghai index?

In case anyone cares to see some numbers, here is the 52 week range for SSEC (Shanghai composite index): 52wk Range: 1,512.52 - 4,081.43

67 year old grandfathers mortgaging their house to put into the chinese stock market.

I keep flashing back to the stock chart of the Nikkei in 1990 where it shot up from 22,000 - 37,000 over a period of 2 years then fell off a cliff, not to mention the nasdaq bubble and the 1987 stock market loss in the US. Except the chinese market seems to be hitting an even steeper curve.

Anyone else out there getting the creeps from this?

Yep. I'm basically with GJ, though, because as Keynes once quipped, markets can stay irrational longer than you can stay solvent.

That said, when you see something going superexponential like that, you want to tread verrrry carefully; you know there's something unsustainable going on - you just don't know if it stops sustaining tomorrow or next year. But when it does, it's not pretty ...

[lakedaemonian]

Re: Is it just me...

On a related note, does anyone know if(and if so, how easily) Chinese citizens can purchase physical gold/silver?

IF they can, would a shock to the Chinese equity/property markets see funds migrate to precious metals in enough volume to significantly effect the global marketplace?

The Chinese have historically been gold/silver hoarders...the Japanese plundered them to an almost biblical scale in WWII...is it possible the Chinese people could revert back precious metal hoarding in a crisis?

I have a couple SMALL investments in China(Shanda Interactive is a long term holding of mine).....but right now the only ones that looks compelling enough to buy(for me) at these valuations is American Dairy(ADY) which I've been thinking long and hard about as a boring, Warren Buffett like play on China.

I'd love to get into China Life Insurance to sit on for a few decades, but not anywhere near the current price......

but I'd be interested to hear people's thoughts on China and Gold in relation to this thread.

[Spartacus]

Re: Is it just me...

I believe so.


http://www.sge.sh/redirect.asp?locale=1033
http://english.people.com.cn/200210/...1_105979.shtml

http://english.people.com.cn/200606/...30_278678.html

On a related note, does anyone know if(and if so, how easily) Chinese citizens can purchase physical gold/silver?

IF they can, would a shock to the Chinese equity/property markets see funds migrate to precious metals in enough volume to significantly effect the global marketplace?

The Chinese have historically been gold/silver hoarders...the Japanese plundered them to an almost biblical scale in WWII...is it possible the Chinese people could revert back precious metal hoarding in a crisis?

I have a couple SMALL investments in China(Shanda Interactive is a long term holding of mine).....but right now the only ones that looks compelling enough to buy(for me) at these valuations is American Dairy(ADY) which I've been thinking long and hard about as a boring, Warren Buffett like play on China.

I'd love to get into China Life Insurance to sit on for a few decades, but not anywhere near the current price......

but I'd be interested to hear people's thoughts on China and Gold in relation to this thread.