Posts filed under “Sentiment”

How to Destroy A Market, China-Style

Click for ginormous chart
Shanghai YTD

A market, by definition, is a place where buyers and sellers can come together to exchange goods and services. That involves buying and selling those goods. Once you eliminate that free trading, you no longer have a market.

Then there is China, where the authorities have suspended the sale of half of the A share stocks. “Investors with stakes exceeding 5 percent must maintain their positions,” the China Securities Regulatory Commission said.

Throughout history, rules and regulations have slowly evolved to markets. Indeed, a certain level of regulation is desirable to ensure fair dealings, transparency and efficiency. By removing the ability to freely sell shares, the Shanghai Stock Exchange no longer qualifies as a market. I don’t know what it is, but if forced to come up with a name, the pursuit of accuracy would suggest calling it a government bureaucracy.

Lest you forgot, China remains a centrally planned autocratic regime ruled by the Communist Party. Niceties such as liquidity and free trading are deviant concepts. Pity Xiao Gang, the chairman of head of China Securities Regulatory Commission. The Wall Street Journalsaid he had “the toughest job in China.”

Let me suggest to Xiao that he might learn from the mistakes the West made in its recent crises.

During the dotcom bubble, Federal Reserve Chairman Alan Greenspan failed to do anything to reduce the speculative excesses. Day trading, excessive leverage, mediocre listing requirements all worked to allow a huge bubble.

Continues here: China Shows How to Destroy a Market

 

 

Category: Markets, Sentiment

Colbert Shows How to React to a Market Collapse

 

A message from the Supply Lord of The Afterscape.

 

Apocalypse Dow

Hat tip WSJ

 

Category: Humor, Markets, Sentiment, Video

The World’s Most Respected Companies

Source: WSJ

Category: Corporate Management, Sentiment

NFIB: Why So Negative?

Small business sentiment readings are now over their 20 year average, and have moved steadily higher since the crisis ended in 2009. If that uptrend was a stock price, all your momentum trader friends would be buyers. But you certainly would not get that from reading the NFIB news releases. They have been consistently, persistently,…Read More

Category: Economy, Sentiment

Post Traumatic Crash Disorder & the 1962 Flash Crash

click for ginormous chart Source: Bloomberg On this day 53 years ago, Wall Street had one of its worst sessions ever. As the Wall Street Journal reported, “The Dow Jones Industrial Average fell 5.7%, down 34.95, the second-largest point decline then on record.” It was part of a longer decline that some called the “Kennedy Slide…Read More

Category: Markets, Psychology, Sentiment

Does Record Picasso Sale Signal a Bubble?

The headlines screamed across the Web yesterday: Picasso’s Women of Algiers smashes auction record. Two Artworks Top $100 Million Each at Christie’s Sale. Picasso Painting Sells for $179.4 Million; Sets Auction Record. The record for paintings was joined by a record for a sculpture, when Alberto Giacometti’s “Pointing Man” was purchased by an anonymous bidder for $141.3 million….Read More

Category: Bubbles, Sentiment, Valuation

Nasdaq Bubble Stole From Future Returns

Yesterday, we discussed why the Standard & Poor’s 500 Index has gone sideways for the past few months. The prime suspects were rich valuations, earnings crimped by falling energy prices and higher returns to be had overseas. Today, I want to look at the Nasdaq Composite Index. It closed at 5,056.06 yesterday, surpassing its March 2000 dot-com…Read More

Category: Markets, Psychology, Sentiment, Valuation, Web/Tech

Do Lower Gasoline Prices Boost Confidence?

Do Lower Gasoline Prices Boost Confidence? Aditya Aladangady and Claudia R. Sahm FEDS Notes, March 6, 2015     A gallon of gasoline currently costs one third less than it did last summer, as shown by the solid line in Figure 1. Gasoline makes up 5 percent of average family spending, so lower prices at the pump…Read More

Category: Energy, Federal Reserve, Sentiment, Think Tank

Top Issue for Americans? Bad Government

The Gallup polling organization is in the business of taking the pulse of the American public. A new survey detects a surprising shift in perceptions. It points not just to the nation’s sour mood and disappointment with the drawn-out recovery, but also to a sense that something different is now wrong with the U.S. In…Read More

Category: Politics, Sentiment

Rich Countries on Whether Any Day Is a Good One

This is such a strange data point . . .     Source: Pew Research

Category: Data Analysis, Digital Media, Sentiment