China's probe of market manipulation

Discussion in 'General Trading Discussion' started by baudwalk, Sep 1, 2015.

  1. baudwalk

    baudwalk Senior Investor

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    Chinese regulators aren't fooling around when it come to investigating the wild gyrations in their markets. English language newspapers in China offer interesting reads. And yes, I recognize likely government influences. Nevertheless, have a look. One could speculate what might happen if the SEC would act so forcefully. :(

    http://www.scmp.com/news/china/poli...be-market-volatility-deepens-amid-speculation


    A leading hedge fund manager, Li Yife, disappeared from public view. Her husband denies the speculative arrest rumors.


    http://www.shanghaidaily.com/business/finance/Suspects-confess-in-shares-probe/shdaily.shtml


    Several people, including 4 from China's largest brokerage firm and an official from the China Securities Regulatory Commission, have pleaded guilty to confessed to spreading false rumors, taking bribes and insider trading.
     
  2. petesede

    petesede Guest

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    The problem in China is that the investors and firms are getting all the ´benefits´ of a free market economy, meanwhile the gov´t is trying to play catchup with regulations and oversight. You can ask if the SEC would be as forceful? they don´t have to be because they don´t let things get that far our of hand. Guys like Bernie Madoff occassionaly slip through the cracks.. but in China, it is just a tidal wave of people doing the same thing.
     
  3. baudwalk

    baudwalk Senior Investor

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    The SEC doesn't let things get that far out of control? OK, I'm a cynic. Whatever floats your boat... heh.
     
  4. Onionman

    Onionman Senior Investor

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    China is definitely playing catch up on so many levels. The infrastructure and monitoring platform simply isn't there yet. But you can be rest assured that the government will throw everything at the system to make sure that the public and foreign investors can have faith in it. In the meantime, there would have been a few guys that made a tidy sum and would have slipped through the net.
     
  5. baudwalk

    baudwalk Senior Investor

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    I wouldn't put faith in the Chinese system. Sally Bundock, who is on camera with the BBC business news at 5:30 and 6:30 am BST, replied to me via Twitter with news of 200 arrests made over the market manipulation probe (http://www.telegraph.co.uk/finance/...down-on-market-rumours-with-mass-arrests.html). As of now, the information in this Daily Telegraph story has not yet surfaced in the Chinese newspapers I mentioned in message #1.
     
  6. Onionman

    Onionman Senior Investor

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    The newspapers definitely won't be reporting the full story. Unfortunately, that's not how they work there. Perversely the liberalization program won't work out well if all the information is fully out there.

    Everything has to be managed, some of it perhaps even stage managed. And the fact that a lot of stories don't see the light of day shouldn't surprise. The issue will come to a head when China (eventually) becomes fully open to international investors and everything is freely tradable. That's when there will be more calls for transparency and globally-accepted standards in many investment-related areas. That's still to come.
     
  7. WaveWage

    WaveWage Well-Known Member

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    While I believe China is attracted by money, I think China tried hard in the last years to be less dependent of external investments. They want to be more independent of others. Sure, they want to get money from other countries but I heard often about plans to do much investments and developments inside China. I don't feel like they're ready to give up their regulation with a mentality like this.

    After all, what can they do with the money investments brings? Developing themselves, to the point they don't need investments anymore. They could count on it but it seems it is not the strategy they like. I know a lot of money flows from import, but if they care so much about the currency and the internal investment, it is not for nothing.
     
  8. baudwalk

    baudwalk Senior Investor

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  9. baudwalk

    baudwalk Senior Investor

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    AS I write this I am watching uninterrupted BBC live coverage of China's World World 2 V-Day celebration taking place in Beijing. Clear bright blue skies, with factories closed down. Amazing. The BBC reporter says China has surpassed Germany to become the second largest manufacturer of military hardware. It is a national holiday, and Chinese markets are closed. I think the markets will be closed on Friday as well.
     
  10. Onionman

    Onionman Senior Investor

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    China's very good at providing a good public image for times that the world looks on, as also reflected in the recent World Athletics Championships. They know how to put on a show.

    The blue skies is also a classic example of just how big an issue pollution is. Over Chinese New Year each year there is a noticeable decline in pollution as the factories switch off. Something like 2,000 factories are closed or partially closed around Beijing for today's event.

    Things will kick back in next week - we'll see how the market resumes....
     

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