A Chinese bubble

Posted: April 21, 2015 in Uncategorized

The Chinese market is going up like a rocketship and another megabubble will form.

China cut the lending requirement freeing up over USD 200 billion to help the economy.

With crackdown on corruption and shadow banking, failing steel enterprises and crashing real estate developers (Kaisa Group Holding is one of the first big developers to go bust)…the only way to go is gearing in the stock market.

And so it creates another bubble…probably one of the biggest ever as Chinese like gambling.

The regulator knows, but seems not to be able to set the pace (they do not want to burst the bubble, but they do not want to rise too fast) and its confusion can be seen in its action.

Last week CSRC (the regulator) warned against betting in the stock market and at the same time introduced the short selling capability and tightening rules on margin lending.

In the week ending 10 April mainland investors opened accounts at the fastest ever (3.2 million new accounts on top of the 4 million in March).

And now China has cut the lending requirement freeing up 200 billion.

The are creating not a strong bull….but a raging mad cow!

Again a just created bubble will not explode for a while (unless some  other events trigger it), but this is again another “Black Swan Event” randomly released…..there are so many now that we would need a Ticonderoga class destroyer (the most sophisticated anti missile US Navy ship) to get them all

And directly from China a “say it all picture….I hope they are joking – I can’t read Chinese….it is scarily funny!Capture china

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