Hang on everybody....

Discussion in 'Politics, Religion, Social Issues' started by smallcoffee, Aug 24, 2015.

  1. smallcoffee macrumors 6502a

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    #1
    Article

    The Chinese market sell-off is real. Dow down 400 points in futures already. Australia opened up dropping 2.5%. Hopefully this is just a hiccup and not the rumblings of something larger.
     
  2. Happybunny macrumors 68000

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    #2
    IMO the Chinese stock market sell off can be partly explained, small time investors using borrowed money, these types of investors inevitably lead to roller coaster rides.

    They jump at every bit of bad news, they are basically day traders, using the stock market like a casino.



    Having said all that the Chinese Stock market is one of the biggest in the world economy, this will get worse before it gets better.
     
  3. Arran macrumors 68040

    Arran

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    #3
    Once it all settles down: Buying opportunity.

    Ugly while its in process, however.
     
  4. sodapop1 Suspended

    sodapop1

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    #4
    Let's hope we get more panic selling today as we did after the opening bell. People were practically giving away some stocks :D
     
  5. LizKat macrumors 68040

    LizKat

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    #5
    The usual dilemma: to buy more Apple gear or some Apple stock...

    Actually for a few minutes there the outlier plunges of Home Dep and Ford made them look pretty attractive. Maybe someone heard “Sell, sell!” when the rest of them were yelling “stop selling, it’s cheap enough now!” Believe me that combo is what's happening in all the trading rooms today.

    Well off to the supermarket. Beans on sale at 77c look pretty good too!
     
  6. VulchR macrumors 68020

    VulchR

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    #6
    I do not invest directly in the stock market, and I see this correction as just another part of the exaggerated boom/bust cycle that has been going on since 1995, presumably due to deregulation. The rich will get richer, the poor will continue to suffer, and until we change both our financial system and out values, there is no reason to expect anything different. People treat the current version of capitalism as inevitable and optimal. It isn't, and in the long run it is unsustainable.

    In any case, nobody loses money in this correction unless they sell lower than they bought.
     
  7. rdowns macrumors Penryn

    rdowns

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    #7
    And 4 of my 5 stock are now in the green for the day. Only my finance EFT is taking a hit at this point.
     
  8. sodapop1 Suspended

    sodapop1

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    #8
    So I take it you weren't one of those who panicked and sold their stocks at a 20% discount this morning in our current version of unfair capitalism. :eek: Even government can't fix stupid.
     
  9. rdowns macrumors Penryn

    rdowns

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    #9

    **** no. I'm an investor, not a trader. This is what I call my play account. Started it with $6,500 about 12 years ago. Portfolio is now worth about $111,000. I wish my other investments were doing that well. :D
     
  10. hulugu macrumors 68000

    hulugu

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    #10
    I'm buying stuff at a 20 percent discount after this morning's hilarity. Hell, Apple just kicked up .13 percent as I was posting this.
     
  11. vrDrew macrumors 65816

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    #11
    The fact that the Dow and most major US indexes recovered suggests that investors do not see a fundamental weakness in US companies.

    China's stock market was well over-due for a correction. And frankly a lot of China's economic growth over the past decade was built on fluff. Take a look at some of the absurd "ghost cities" that have been created.

    Overall this may not necessarily be bad news. Expect even cheaper Chinese imports as China devalues the yuan. And a massive (~ $1 trillion plus) Chinese stimulus to encourage domestic demand may be an opportunity for US and European firms to boost their exports. And certainly US agriculture could be in a prime position to supply Chinese tastes.

    Overall the Chinese economy needs to transition to more consumption - food, clothing, cars, etc. - and less investment in things like empty cities and (literally) bridges to nowhere. This sell off may well be the event that moves that process along.
     
  12. Eraserhead macrumors G4

    Eraserhead

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    #12
    Apart from all the roads, railways and metro systems they built.
     
  13. Bug-Creator macrumors 6502

    Bug-Creator

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    #13
    With China cooling down (that still seems a fact regardless of all the casino style speculation) there is no way of knowing how things will continue.

    Will markets just forget this hiccup and go of to new alltime highs ?

    Or was this just sign of of stagnating markets (like they allready did the past 6 months).

    How will cebtral banks react ? Let the fire burn out on itself, or insert even more fresh money eventually leading to an even bigger bubble ?
     
  14. vrDrew macrumors 65816

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    #14
    Infrastructure investments (roads, rails, airports, etc.) are generally a positive for an economy. Especially a growing one.

    But such investment needs to be carefully managed, especially if it is directed by Governments, rather than via the free market.

    China's growing economy needs quality housing. Think of all those FoxConn workers sleeping twelve to a room. And, compared to most Chinese jobs, the ones at FoxConn are relatively highly paid and stable. But because much investment spending is controlled by local Governments, you end up with thousands of brand new apartment blocks in places like Kangbashi New Area in Inner Mongolia. A mere 2500 kilometers from the FoxConn factory in Shenzhen.

    And infrastructure investment requires a very high level of maintenance, even if its not immediately used. An apartment complex sitting empty for six months or a year is an annoyance. Sitting uninhabited for years on end is simply an expensive white elephant. Ditto for underused airports, train lines, and highways.
     
  15. Eraserhead macrumors G4

    Eraserhead

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    #15
    But the train lines, for example, have been used, the new high-speed rail lines for example have more usage than the Eurostar.

    And on metro systems, Beijing and Shanghai's are the busiest in the world, and Guangzhou's follows in sixth place.
     
  16. vrDrew macrumors 65816

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    #16


    Obviously not all the infrastructure investment was wasted.

    But because a great deal of
    infrastructure investment is controlled by Chinese regional governments - you end up with white elephants like the one on Dachangshan island. Which is handy if you were planning on traveling on to visit North Korea. But not much else.

     
  17. VulchR macrumors 68020

    VulchR

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    #17
    If you look at the pattern of stocks since 1995, the boom bust cycle is very pronounced compared to what it used to be. And this isn't over....
     
  18. vrDrew macrumors 65816

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    #18
    You are right. This current sell-off is centered on China, but the reality is much more complicated than simple mis-steps in the management of China's economy.

    We've also seen historically low interest rates; a slumping price of oil; very rapid capital flights from one market to another.

    The problem with the Chinese (and other emerging markets) melt-down is that it will lower demand. This will further reduce oil prices - even further weakening markets in Russia; Latin America and the middl east.

    That said, I don't think the outlook is totally doom-and-gloom.
     
  19. LizKat macrumors 68040

    LizKat

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    #19
    Today was just another of those periodic notes to the Fed:

     
  20. sodapop1 Suspended

    sodapop1

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    #20
    Well, I certainly hope not. This market correction could not have happened at a more ideal time for me. I'm sitting on 50% and 75% cash across my individual and retirement accounts, respectively. I welcome these pullbacks as I gradually reinvest in the market.
     
  21. smallcoffee thread starter macrumors 6502a

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    #21
    Eh, those aren't contributing in the same scope that the person you were quoting means.
     
  22. Dmunjal macrumors 65816

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    #22
    Deregulation? How about looking at what the Fed has done with interest rates and QE over the last 20 years. Inflating the stock and real estate markets until they pop is the boom/bust cycle on steroids.
     
  23. jnpy!$4g3cwk macrumors 65816

    jnpy!$4g3cwk

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    #23
    The stock market indices are composed of individual stocks. The question people should have been asking all along is, "What should stock XXX be valued at?" If a particular stock is too high, then, a correction which brings it closer to its real value is good news, not bad news. Unless people subscribe to the greater fool theory, and, were hoping to sell to someone else right before the stock peaked, in which case, well, someone else made a lot of money. :cool:
     
  24. smallcoffee thread starter macrumors 6502a

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    #24
    I don't disagree with the correction part, but what we don't want is a huge sell off or something else that could cause a collapse in the global financial market.
     
  25. sim667 macrumors 65816

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    #25
    Ive been wanting to have a play with stocks for a while, but don't have a clue where to begin :(
     

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