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China's Stock Market is in Free Fall

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  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    While much of the world is talking about Greece's pending economic disaster, a potential financial disaster in the worlds second-largest economy is hardly making a blip on the radar.

    China's stock market has been in free fall for the past few days, losing over a third of its total value in the past couple of weeks. If their economy continues its nose dive then we could see a domino effect hitting Asia, Europe, and eventually the United States. The global economy is so interconnected that a major financial crisis in a country the size of China will surely bring about financial troubles in the rest of the world.

    I don't think we have much to worry about in the very short term, but I do worry what might happen if China doesn't get a handle of this soon.

  • Democrat
    Philadelphia, PA
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    Does this have anything to do with the current problem with Wall Street and it's computer glitch, the Statement that was made is that they don't know what caused it , but they know what didn't cause it?? This was in reference to a type of cyber attack coupled with China being hacked and also United Airlines being grounded nationwide because of a computer foul up?
  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    johnnycee Wrote: Does this have anything to do with the current problem with Wall Street and it's computer glitch, the Statement that was made is that they don't know what caused it , but they know what didn't cause it?? This was in reference to a type of cyber attack coupled with China being hacked and also United Airlines being grounded nationwide because of a computer foul up?

    I have a feeling these things have nothing to do with each other.

    China wasn't hacked--their stock exchange is in free fall and has been in free fall for almost a month now.

    The Wall Street thing may very well have been a hack, but I don't think they are directly linked.

    And the United Airlines grounding looks like it's just a computer bug. It very well may be a cyber attack, but I'm not convinced of it. Computer glitches happen and I am always hesitant to blame it on a hacker or a foreign country just because its the easiest thing to do.

    The media does a great job of trying to make us think these are all interconnected, but I just don't buy it.

  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    I wouldn't be too concerned for the effects on the US market.

    L.A. Times, Why China's stock market is tanking

    Looking at the chart in the LA Times article, the Chinese market index was at 2,038.6 exactly one year ago, Today it stands at 3,502.7, a hefty increase of 72 percent from July 2014. Although it has declined 32 percent from it's peak of 5,166.4 in June, that peak was obviously speculative.

    "Stocks kept rising despite a number of red flags, including a slowdown in China's economy and the fact that share prices had become exceptionally rich compared with many of their companies' underlying earnings. One reason: A growing number of working-class Chinese families bought stocks to cash in on the rally and often did so by buying on margin, a term for borrowing money and using the stocks as collateral."

    It looks like the Chinese working class with new savings and wealth is learning the hard way about markets. Greed is not good.

  • Democrat
    Philadelphia, PA
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    I get skeptical when a person in authority says that " We don't know what caused this glitch but we know what didn't", this seems to me an oblique way of saying don't tell them the truth. Perhaps it's just me but I don't trust Wall Street,It's maybe a coincidence but just when the stock of a Major Airline Corp. was dropping like autumn leaves in wind storm, with major implications, The stock exchange shuts down,
  • Center Left
    Independent
    Central, FL
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    Chinese stocks have fallen a lot. One news story I heard mentioned that 1 trillion dollars was lost. Too often it's someones entire fortune or their retirement. I heard that their govt. was going to pay much money for brokerage houses to buy stocks. I don't think that is how it works but who knows what the future holds for them. Time will tell.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    The "$1 trillion lost" is in reference to the peak in June. The way I look at it the $1 trillion in artificial speculative wealth was created out of thin air and disappeared out of thin air. No real wealth was lost in the past year. Of course if you bought at the peak you personally suffered losses. But if you bought a year ago, well a 72 percent return on your investment ain't bad.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    New York Times, July 6, 2015: How to Make Sense of China’s Plummeting Stock Market

    This New York Times article puts it all in perspective. Nothing to worry about. As per the article:

    "But the numbers suggest that the stock market collapse — it’s down 32 percent in four weeks — may be less a shocking turn of events and more an inevitable correction in a market that featured many of the classic signs of a financial bubble."

    "Put all these pieces together, and here’s what we have: a rise in Chinese share prices in the last year that seemed to be driven more by investor psychology than by anything fundamental. It is hard to see how the prices as of a month ago were justified, and easy to see why the sell-off of the last month would occur."

    When it comes to China, the media seems infatuated with anything negative. Fear mongering.

  • Independent
    Ft.myers, FL
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    Schmidt Wrote:

    New York Times, July 6, 2015: How to Make Sense of China’s Plummeting Stock Market

    This New York Times article puts it all in perspective. Nothing to worry about. As per the article:

    "But the numbers suggest that the stock market collapse — it’s down 32 percent in four weeks — may be less a shocking turn of events and more an inevitable correction in a market that featured many of the classic signs of a financial bubble."

    "Put all these pieces together, and here’s what we have: a rise in Chinese share prices in the last year that seemed to be driven more by investor psychology than by anything fundamental. It is hard to see how the prices as of a month ago were justified, and easy to see why the sell-off of the last month would occur."

    When it comes to China, the media seems infatuated with anything negative. Fear mongering.

    Yes Schmidt, your last line says it all, sorry to say our "leaders" thrive on it, as well related to "religion" and "terrorists" etc.