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Old 01-06-2016, 10:43 PM   #41
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Trading halt again. This time , " circuit breaker " tripped and all done for the day in the first 20 minutes. Me thinks It's going to be a long cold winter for the Shanghai exchange this year .
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Old 01-06-2016, 11:12 PM   #42
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Yes, Bloomberg says after their index dropped 7% right off bat, tripped circuit breaker, and traders went home after 29 minutes.
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Old 01-07-2016, 05:21 AM   #43
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Looks like another interesting day for the US markets ahead. With large cash positions held over from 2015, I'm continuing to buy on the way down
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Old 01-07-2016, 05:49 AM   #44
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Looks like another interesting day for the US markets ahead. With large cash positions held over from 2015, I'm continuing to buy on the way down
I've been close to 60/40 and am fairly comfortable with that. I have an unusually high cash position for my age (I'm really more like 60/25/15 with about 15% cash) because I haven't seen enough value in stocks or bonds at current prices to entice me into buying more (Both seem at least fully valued to me if not higher). But yeah, if this carnage continues, I'll be using the cash to nibble on more securities on the way down. I might even be willing to go to 65/35 or even 70/30 for a while if prices fall enough to entice me.... but for now, staying the course and keeping an eye on the markets with my available portfolio cash. That all said, somewhere between 55-60% equities is still my long-term allocation.

I don't think it will be 2008 again, but this looks like it *could* be a significant speed bump that seems to be coming every 8 years. Fasten your seat belts; we're hitting turbulence.
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Old 01-07-2016, 06:38 AM   #45
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I don't think it will be 2008 again, but this looks like it *could* be a significant speed bump that seems to be coming every 8 years. Fasten your seat belts; we're hitting turbulence.
Although my cash position is bigger than yours, I hope the landing gear does not fall off. Any how, I am going to wait a bit to see how this China syndrome plays out before buying.
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Old 01-07-2016, 06:42 AM   #46
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I don't think it will be 2008 again, but this looks like it *could* be a significant speed bump that seems to be coming every 8 years. Fasten your seat belts; we're hitting turbulence.
I don't do the short term trading like I did many years ago, but one habit still retained from that experience is to look at the stock futures in the early morning to get a feel for what the market might do on any given day. Looks like today may be a day for the doom & gloomers to feel like they are owed respect for being correct. Oh well, just another day...
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Old 01-07-2016, 07:29 AM   #47
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I don't think it will be 2008 again, but this looks like it *could* be a significant speed bump that seems to be coming every 8 years. Fasten your seat belts; we're hitting turbulence.
George Soros thinks it will be 2008 again...
Soros: It's the 2008 crisis all over again

But have no fear, the Fed is going to raise rates right into the face of this thing. If you look at the 1930s, the Fed did exactly the same thing.
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Old 01-07-2016, 07:44 AM   #48
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I always thought the U.S. markets should have some sort of circuit breaker, as well. Considering the "hysteria" that often ensues in sharp market downturns, maybe a circuit breaker cooling off period would stabilize the markets a bit.
I'm generally against government interference in the free market. But so much of the stock market is run by automated trading maybe some tweaking is needed?
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Old 01-07-2016, 08:00 AM   #49
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George Soros thinks it will be 2008 again...
Soros: It's the 2008 crisis all over again

But have no fear, the Fed is going to raise rates right into the face of this thing. If you look at the 1930s, the Fed did exactly the same thing.
The Soros remarks were given at a financial conference in Sri Lanka. While there is no transcript, the detail in the Bloomberg article reads
Quote:
The current environment reminded him of the "crisis we had in 2008,"The Sunday Times in Sri Lanka reported on Thursday morning. "China has a major adjustment problem," he added, according to Bloomberg. "I would say it amounts to a crisis."
He did not say this is 2008 again. Actually, what is happening in China has little resemblance to the financial crisis of 2008, although it does make for scandalous headlines.
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Old 01-07-2016, 08:00 AM   #50
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I always thought the U.S. markets should have some sort of circuit breaker, as well. Considering the "hysteria" that often ensues in sharp market downturns, maybe a circuit breaker cooling off period would stabilize the markets a bit.
I'm generally against government interference in the free market. But so much of the stock market is run by automated trading maybe some tweaking is needed?
Interestingly some US markets do have circuit breakers, one example is the futures market where there are limits to the movement for the day, yeilding days that are limit up or limit down. Actually the stock market does have circuit breakers but they are very broad and have never been tripped. They come at 10% 20% and close for the day at 30%. The aim is to avoid things like oct 1987.
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Old 01-07-2016, 08:47 AM   #51
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Trading halt again. This time , " circuit breaker " tripped and all done for the day in the first 20 minutes. Me thinks It's going to be a long cold winter for the Shanghai exchange this year .
What's weird is the last two days it was higher or slightly down. Why wait two days for another circuit breaking plunge? Just too weird.

Also - why would it have this big impact in the US markets? Seems like they ignore China news for months, then all of a sudden wham! Smells more like an excuse.

I look at the Shanghai Composite 2 year graph, and the current drop is still way higher than levels in Q4 2014.
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Old 01-07-2016, 08:47 AM   #52
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Interestingly some US markets do have circuit breakers, one example is the futures market where there are limits to the movement for the day, yeilding days that are limit up or limit down. Actually the stock market does have circuit breakers but they are very broad and have never been tripped. They come at 10% 20% and close for the day at 30%. The aim is to avoid things like oct 1987.
I remember circuit breakers being tripped several times.
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Old 01-07-2016, 08:58 AM   #53
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Interestingly some US markets do have circuit breakers, one example is the futures market where there are limits to the movement for the day, yeilding days that are limit up or limit down. Actually the stock market does have circuit breakers but they are very broad and have never been tripped. They come at 10% 20% and close for the day at 30%. The aim is to avoid things like oct 1987.
As noted by audreyh1, the general US breakers have tripped in the past--but not very often (by design). The research I've read on them is that they are far from as effective as, for example, real circuit breakers.

More interestingly, the circuit breakers for individual stocks are much more sensitive. CNN reported that they tripped over 1200 times in one day on Monday, August 24 of this past year: Trading was halted 1,200 times Monday - Aug. 24, 2015
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Old 01-07-2016, 10:18 AM   #54
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Wow, this is interesting:

Quote:
China’s securities regulator announced a suspension of a new “circuit breaker” mechanism designed to help stabilize the stock market, saying the system didn’t work out as expected and instead exacerbated stock losses.

In a statement issued late Thursday night, the China Securities Regulatory Commission said the circuit breaker system will be halted starting Friday. It didn’t say how long the suspension will remain in place.
(From WSJ, free link: China Securities Regulator to Suspend New ‘Circuit Breaker’ Mechanism - WSJ )
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Old 01-07-2016, 10:25 AM   #55
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What's weird is the last two days it was higher or slightly down. Why wait two days for another circuit breaking plunge? Just too weird.

Also - why would it have this big impact in the US markets? Seems like they ignore China news for months, then all of a sudden wham! Smells more like an excuse.

I look at the Shanghai Composite 2 year graph, and the current drop is still way higher than levels in Q4 2014.
The Chinese government is in there buying to try and prop it up. It could be that they ran out of the money they had allocated to that.
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What the heck Happened to the Shanghai Market today.
Old 01-07-2016, 10:54 AM   #56
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What the heck Happened to the Shanghai Market today.

Ready. Fire. Aim.

China equities market behaves is like a teenager... Building it as they go. Bound to get some stuff wrong.
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Old 01-07-2016, 11:31 AM   #57
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Ready. Fire. Aim.

China equities market behaves is like a teenager... Building it as they go. Bound to get some stuff wrong.
A great reason to wait before adding them to indexes, or at least the ETFs/Funds that use them. The fact that they are a big "teenager" doesn't change the fact that they are not behaving well. Prices are not being set by true market forces yet--which is a prerequisite before any form of indexing can work. I have no problem with the volatility, it's the government intervention in the businesses themselves, the attempts to manage the market for domestic political purposes, etc. Sure, other countries do it on a much smaller level, but the distortions in the PRC are huge. I'd happily give them my "capital" -- if they behaved more like "capitalists."
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Old 01-07-2016, 06:27 PM   #58
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So now the Chinese market is not only not transparent, it is illiquid. Does The Investment Biker have a flat tire?

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Old 01-09-2016, 01:26 AM   #59
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Ready. Fire. Aim.


I think maybe it is the chinese gambling culture that plays tricks with the stock market even more than elsewhere.
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What the heck Happened to the Shanghai Market today.
Old 01-18-2016, 08:39 AM   #60
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What the heck Happened to the Shanghai Market today.

China's embattled top securities regulator, Xiao Gang, has offered to resign, after perceived mismanagement wiped more than $5T off the capitalization of the Shanghai and Shenzhen stock markets since last June, Reuters reports.
The chairman of the CSRC tendered his resignation last week after his brainchild, a "circuit breaker" to limit stock market losses, was blamed for exacerbating a sharp selloff.
The mechanism was deactivated on Jan. 7, just three days after its introduction.

Like I said. Ready...fire....aim.


Now the reality is that China still possesses 1.3 billion consumers. They may be tightening their purse strings a tiny bit as the economy cools but they're not going away and eventually they will all want cars and houses and iPhones and buckets of the colonel's fried chicken and cosmetics and baby formula and gas for their new cars and medicine and clothing and ... You get the idea. PS. There are still 600M peasants who will migrate to the cities over the next 20 years. That's 2x the population of the United States... And that's the ones who are on the move.

The world is not coming to an end.

The USA financial community misreads China markets and China potential absolutely miserably.

The markets behave like teen agers. Doing before thinking is fairly common. If something goes wrong there is always a head to chop off...someone loses face and the government can point a finger... Everyone is happy to have found the culprit. And life goes on ...
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