Chinese Order Torture

Good luck getting trade orders done on the A Shares market in China these days. Last night, they froze half the stocks in an attempt to halt what’s become a rolling 1987-style crash across the country’s stock markets.

WSJ:

The Shanghai Composite fell 5.9% at 3507.19, after losses of as much as 8.2% earlier Wednesday. The index has lost 32.1% since its peak in mid-June. The smaller Shenzhen Composite fell 2.5% at 1884.45, down 40% from its high last month…

Hundreds of Chinese stocks were frozen from trading Wednesday, with 1,287 companies halted. That represents 45.6% of the constituent stocks of the Shanghai Composite and Shenzhen Composite and $2.5 trillion of market capitalization, according to data from FactSet…

China has put an arsenal of measures to work in recent days to stem the selloff that has wiped out roughly $4.1 trillion in value from China’s equities.

What do you mean “arsenal of measures”?

Financial officials from Beijing to Shanghai are running every play in the Greenspan/Bernanke/Yellen book right now. They’ve corralled all the big brokerage firms and organized a fund to buy the dip, like the Wall Street-led bailout of LTCM organized by the Federal Reserve. They’ve enacted a QE of sorts or are strongly hinting at it, a la the Bernanke Fed in 2012. They’re halting stocks like our circuit-breakers do on the NYSE. They’re jawboning in the state-owned media and encouraging investors to remain calm – something Yellen’s been doing at her press conferences since her first FOMC meeting.

There are quota limits of how much stock foreign investors are allowed to buy in markets like Shanghai and Shenzhen, so don’t look to the international asset managers to be able to ride to the rescue. They can buy Hong Kong in size, but that’s about it. Bottom line – the panic has to work itself out on the Chinese mainland amongst the emotional, inexperienced Chinese investment community itself.

Buckle up.

Source:

China Markets Fall Sharply Despite Fresh Help From Beijing (WSJ)

 

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. immediate edge reviews 2020 commented on Sep 23

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2015/07/08/chinese-order-torture/ […]

  2. What is the Bitcoin loophole? commented on Sep 25

    … [Trackback]

    […] Here you can find 76557 additional Information to that Topic: thereformedbroker.com/2015/07/08/chinese-order-torture/ […]

  3. Dank Vapes commented on Oct 13

    … [Trackback]

    […] Read More Information here to that Topic: thereformedbroker.com/2015/07/08/chinese-order-torture/ […]

  4. scotiabank online personal commented on Dec 05

    … [Trackback]

    […] Find More on on that Topic: thereformedbroker.com/2015/07/08/chinese-order-torture/ […]

  5. 메이저놀이터 commented on Dec 16

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2015/07/08/chinese-order-torture/ […]

  6. Quality Engineering commented on Jan 18

    … [Trackback]

    […] Find More Information here to that Topic: thereformedbroker.com/2015/07/08/chinese-order-torture/ […]

  7. tangerine chequing account login commented on Jan 20

    … [Trackback]

    […] There you can find 39434 more Info to that Topic: thereformedbroker.com/2015/07/08/chinese-order-torture/ […]