China shares wipe out 2015 gains as stocks tumble 8.5%

[Recursion]

Source: Market Watch

China’s shares wiped out all of this year’s gains, setting Asian markets tumbling, as fears about the deepening effects of a slowdown in the world’s No. 2 economy rattle investors across the globe.

A number of currencies in the region fell to multiyear lows, with shares in China down more than 8%, and benchmarks in Japan and Australia both shedding more than 2%. The losses early Monday follow steep declines in U.S. and European stocks on Friday, and add to the pressure that has driven some commodities to multiyear lows and battered emerging markets.

At the heart of the selloff is the concern that the once-highflying Chinese economy may be slowing down dramatically. China’s surprise move to devalue its yuan two weeks ago—which would make its exports more competitive—and a string of weak economic data has tipped off worries that one of the world’s biggest drivers of growth may be slowing faster than expected.

Investors will be looking to China’s next move after The Wall Street Journal reported that the central bank is preparing to flood the banking system with liquidity to boost lending. Some economists say that China still has plenty of levers to pull to get its economy back into gear.

Read more: http://www.marketwatch.com/story/china-shares-wipe-out-2015-gains-as-stocks-tumble-85-2015-08-24?dist=tcountdown

[tomm2thumbs]

1. I'd be worried if I were Chinese with a pension plan....

....an announcement by China’s government on Sunday that the country’s pension funds had been approved for the first time to invest in stocks....

Pension funds can now invest as much as 30 percent of their holdings in the stock market, according to the statement by the State Council, China’s cabinet. The main state-run pension fund manages about 3.5 trilllion renminbi, or about $550 billion, in retirement savings of ordinary citizens.

__________


ouch

[Recursion]

2. OTOH now is probably a decent time to buy for young investors

Stuff like this is why you move to bonds as you approach retirement, I guess...

[CountAllVotes]

5. Good luck, it will be needed in The Casino

Good damn luck trying to sell today. Many phones will not be answered as has been the case in past meltdowns.

Who else didn't see this coming?

[Recursion]

6. Meh. I put away $100 / month into stocks with a 25 year+ history of dividend increases

Holding securities for capital value is a sucker's game. I love downturns personally because they make that $100 go farther.

[Kelvin Mace]

10. Very wise

Buy and hold. Our capital gains taxes should be structured to encourage this. They should be 90% for any stock held 30 days or less, then ramp down until they get to 2% for any stock held 35+ years.

[Left Coast2020]

3. Its Crunch time

It's going to happen. This didn't just start a few months ago. This has been simmering since approx. 2008/2009--maybe sooner.

[thebighobgoblin]

4. Most likely the beginning of a long and bumpy ride

for the Chinese, who will now see the results of their government's central economic planning and the strength of their financial system. There are other problems, not just the stock market. The banking system might seem strong on the surface, but being strong when your country's got double digit growth is different than the period China's about to enter. Lots of loans to build up domestic entrepreneurship and property speculation, and it'll be interesting to see what happens now that the music has stopped. Lots of construction projects that have nothing to show for - you can go to cities all over China and see empty 80-floor skyscrapers and even small cities with nobody in them.

Don't get me wrong: I'm bullish on China over the very long term. A more capitalist and free-market China will rule the world, but they're going to have to realize their flawed approaches first, and some of those lessons are going to be painful and might even spark some reforms.

[CountAllVotes]

7. China is a farce

No one knows what goes on in communist China as is the nature of communist countries.

Anyone that invests money is such a racket deserves what they have reaped which will be nothing in the long run.

The whole thing is a farce and it those empty buildings will stay empty. There is no grand recovery in China. It was going for awhile so they thought but the game is up as in checkmate.

[GliderGuider]

9. If you replace "communist" with "capitalist" and "China" with "USA", it's still true.

No one knows what goes on in capitalist USA as is the nature of capitalist countries.

Anyone that invests money is such a racket deserves what they have reaped which will be nothing in the long run.

The whole thing is a farce and it those empty buildings will stay empty. There is no grand recovery in the USA. It was going for awhile so they thought but the game is up as in checkmate.

If you catch my drift...

[thebighobgoblin]

11. Don't be so quick to write off China.

They're easily the world's largest untapped market, with India being a close second. And unlike Americans, Chinese households save their money. There will be some idiots are going to learn a painful lesson about stock markets, investing vs gambling, and transparency. But most Chinese are not playing the market. The real problem for China is that its lack of growth is going to put the Chinese leadership under a lot of scrutiny, and there will be more pressure on them to liberalize. It's significant because the unspoken agreement between people and the government was that the government will stimulate economic activity and deliver prosperity, and in return, the people agree to keep their mouths shut. The public might get a little noisier now, might talk back a little more than they've done in the past.

[brentspeak]

12. India is not in any way an "untapped market"

The vast majority of Indians have no purchasing power, and are not likely to ever have any purchasing power. Even those with money simply hold onto it with tight-fists. Three hundred years from now, India will be as it always has: one giant, overpopulated mud-pit.

[jtuck004]

13. "with India being a close second." < ROFL. What a load. n/t

[thebighobgoblin]

14. Yeah and your knowledge of Indian economics is what exactly?

[Recursion]

16. India is projected to pass China's GDP (and ours) by 2030 (nt)

[bemildred]

8. Well I'd say we are about there now.

Things are starting to get "disorderly".

[NickB79]

15. I have a coworker who thinks we should start bombing China as retribution for their economy tanking