...The CSI300 index (click here) <.CSI300>
of the largest listed companies in Shanghai and Shenzhen closed down
6.8 percent, while the Shanghai Composite Index <.SSEC> dropped
5.9 percent.
With nearly half
the market on a trading halt and another round of margin calls forcing
leveraged investors to dump whatever shares could find a buyer, blue
chips that had been supported by stabilization funds earlier in the week
bore the brunt.
"I've never seen (click here) this kind of slump before. I don't think anyone has. Liquidity is totally depleted," said Du Changchun, an analyst at Northeast Securities....
China is not a TPP member country. With the laws passed in Congress last week, the CEOs are looking to make a killing when the laws come into effect.
Wall Street should not be so anxious, the process of enacting those trade agreements isn't even close.
So, this might just be one of the untended consequences the US Congress talks about, huh?
There are layers of authority the trade agreements haven't even been exposed to yet. If Wall Street is expecting to dive into a done deal, they are more foolish than they know.
The Emerging Markets Index hasn't missed a beat recently. (click here)
Wall Street is dumping China for fast returns on the TPP. Wall Street is anticipating huge initial returns on the markets of the TPP. If one gets the stocks at a low and the law is enacted the immediate investment returns are very high. That means they are buying now and will sell as soon as the anticipated high is reached. That 'high' will be defined by the brokerage themselves depending on their penetration and ability to sustain a small losses.
Sometimes investors will leave a fluctuating market to be protected by private banks that provide a more or less record of a safe haven during any perceived crisis.
Brown Brothers Harriman is one of those banks. The banks have assets that can buffer an unstable market.
May 16, 2015
By Robert Milburn
...Such quiet, (click here) attentive conservatism shows up in the firm’s asset allocations; the bank has 18% of its clients’ assets in “strategic reserves,” short-duration, investment-grade fixed income. But adventurous clients are also investing up to 2% of their portfolio in an opportunistic, distressed-debt manager that will pick through energy-sector bankruptcies. “It is in our DNA to be patient,” Meskin says....
China needs to market it's new infrastructure bank as a good investment that can match assets of any other bank. China needs to provide reassurance and not simply watch the decline.
China should develop, if not already completed, a portfolio of anticipated growth due to it's increasing Middle Class. The Chinese Middle Class is a sure thing. There will be far more purchasing power for products within China itself. This is a aspect of China's economy now that investors are not used to thinking about. China has a vision otherwise called a mission to carry out growth in China. That vision if backed by Chinese assets will be very attractive to investors. Currently, China's stock markets are based in company performance. There probably aren't any 'futures' investment.
The Chinese Middle Class is free standing. It is not at all like the USA from the past when it disappeared as jobs left the country. The Chinese Middle Class will increase the sale of products no different than a USA Middle Class. Wall Street needs to appreciate an expanding client base for their products. This is not a territory for Day Traders. This is establishing an interest in the Chinese Middle Class and its' growing long term returns.
...With so many small-cap companies
sheltering on the sidelines, the ChiNext growth board
<.CHINEXTC>, which has seen some of the biggest swings in
valuations, fell a modest 0.8 percent.
The
plunge in China's previously booming stock markets, which had more than
doubled in the year to mid-June, is a major headache for President Xi
Jinping and China's top leaders, who are already grappling with slowing
growth.
Beijing's
interventionist response has also raised questions about its ability to
enact the market liberalization steps that are a centerpiece of its
economic reform agenda.
China
has orchestrated brokerages and fund managers to promise to buy
billions of dollars' worth of stocks, helped by a state-backed margin
finance company which the central bank pledged on Wednesday to provide
sufficient liquidity....
Wall Street is also engages profit by taking small increments of pennies. Those fractions can add up, too. the ability of Wall Street to take returns away from companies in this memethodology should be outlawed globally. Removing fractions of pennies from any stock market only creates turbulence. It is an underhanded way of making money.
China needs to run an investigation to what is causing these swings in investment.
I honestly don't see a future stock market with long term stability. This methodology is like an invisible thief that prevents long term stability.
Rather than regulation a disincentive to this type of investment should be legislated. A tax on these investment monies specifically should be instituted to end the practice.
Wall Street is also engages profit by taking small increments of pennies. Those fractions can add up, too. the ability of Wall Street to take returns away from companies in this memethodology should be outlawed globally. Removing fractions of pennies from any stock market only creates turbulence. It is an underhanded way of making money.
China needs to run an investigation to what is causing these swings in investment.
I honestly don't see a future stock market with long term stability. This methodology is like an invisible thief that prevents long term stability.
Rather than regulation a disincentive to this type of investment should be legislated. A tax on these investment monies specifically should be instituted to end the practice.
