Chinese stock market crash; has the bubble finally burst?

[MadImmortalMan]

Doesn't Shanghai have a trade-curbing mechanism?  NYSE would curb trading for 15 minutes at 7%...

Yes, and IIRC they also have a certain percentage down stocks can go in a day or something like that. I read that something like 70% of their listed entities closed yesterday down the max.

[Admiral Yi]

Still probably going to stay over $3/gallon here in AK. 

I saw 4.50 in Malibu.

[Martinus]

In recent months, the Shanghai index hovered between 3,500 and 4,000.  3,500 points was considered the floor that the central government would tolerate.  They'd buy if the index approaches it.  What triggered the latest panic is that the index fell deciseively below 3,500.  It is now trading at around 3,100.  That means either Beijing has abandoned the 3,500 floor, or it has run out of ammunition.

Which is the classic danger of government pegs.  You either succeed or fail catastrophically.

You spelled "pigs" wrong.

[DGuller]

In recent months, the Shanghai index hovered between 3,500 and 4,000.  3,500 points was considered the floor that the central government would tolerate.  They'd buy if the index approaches it.  What triggered the latest panic is that the index fell deciseively below 3,500.  It is now trading at around 3,100.  That means either Beijing has abandoned the 3,500 floor, or it has run out of ammunition.

Which is the classic danger of government pegs.  You either succeed or fail catastrophically.

You spelled "pigs" wrong.

Pigs can succeed? 

[Eddie Teach]

Yes, if their goal is to be delicious.

[DGuller]

Yes, if their goal is to be delicious.

You make a good point. 

[Crazy_Ivan80]

Still probably going to stay over $3/gallon here in AK. 

cheap

[The Brain]

In recent months, the Shanghai index hovered between 3,500 and 4,000.  3,500 points was considered the floor that the central government would tolerate.  They'd buy if the index approaches it.  What triggered the latest panic is that the index fell deciseively below 3,500.  It is now trading at around 3,100.  That means either Beijing has abandoned the 3,500 floor, or it has run out of ammunition.

Which is the classic danger of government pegs.  You either succeed or fail catastrophically.

You spelled "pigs" wrong.

Pigs can succeed? 

And how.

[DGuller]

And how.

I don't want to know the details.

[jimmy olsen]

Interesting

To understand China's predicament, Mr. Dollar compared its experience with some of the best known stories of successful economic development of the last half-century: Japan, which reached China's income level per capita in the early 1970s; Taiwan, which passed this threshold in the early 1980s; and South Korea, which hit it around 1990.

What is most striking is not how all three countries followed quite similar paths, but how China's trajectory has diverged from the others'.

Household spending was always the main source of demand in all three, declining gradually to about 50 percent of gross domestic product when they were about as rich as China is today. Investment rates, which rose sharply in the early stages of their development, peaked at that time at around 35 percent of G.D.P.

By these metrics, China's economy is upside down: Consumer spending by households is only 35 percent of the nation's G.D.P. — one of the lowest levels in the world. Its investment rate — nearly 50 percent of G.D.P. — is extraordinarily high. And the productivity of this investment is dismal.

[Monoriu]

China needs to produce better stuff.  Looking at the well-known brands and companies in the world, almost none of them are from China.  Japan has Sony, Toyota; S. Korea has Samsung, KIA; France has Louis Vuitton and a whole bunch of other names that my wife knows but I don't etc.  China has a ton of state-owned banks and oil giants that are unknown outside China.  China produces lots of things, but most of them are other people's stuff.  It merely assembles Apple's iphones, under Taiwanese management to boot; it does not design them.  This economic model can only take it so far.  China needs to create, design and develop its own products and brands. 

[Admiral Yi]

China does seem to be grabbing the low end of the (dying) PC market with the Acer brand it overpaid IBM for.  Or was that Visio?

Every time I read about the Chinese car industry the verdict is still the same: they're all shit.

[Monoriu]

China does seem to be grabbing the low end of the (dying) PC market with the Acer brand it overpaid IBM for.  Or was that Visio?

Every time I read about the Chinese car industry the verdict is still the same: they're all shit.

Lenovo (992.hsi) bought IBM's PC business.  Acer is a separate Taiwanese brand.

I won't buy a Chinese brand car.  No way I'm entrusting my life with that.  I don't think they meet international safety standards at all.  When we talk about if Toyota is better than BMW or Volkswagan, the assumption is that they all meet basic safety standards; the only question being if they go beyond them.  When it comes to Chinese cars, the problem is they don't even meet the minimum standards. 

[DGuller]

If you go by crash test videos, Chinese cars in some ways are far more advanced in safety compared to European cars.  While in European cars there is maybe three feet worth of crumple zone, in Chinese cars the crumple zone runs the entire length of the car.

[Zanza]

I work in IT and there is a couple of well-known Chinese brands. Alibaba, Baidu, TenCent as service providers, Huawei for communication hardware. Not quite Google but it is getting there.