Financial Armageddon!!

[speights boy]

Excellent.
Perhaps other markets which are being affected by Chinese speculators will receive some close attention.

[Davo36]

Excellent.
Perhaps other markets which are being affected by Chinese speculators will receive some close attention.

Not sure what you mean by that SB, (like are you referring to NZ?) but it all looks like a house of cards to me. There's gotta be a big Chinese implosion at some point. Plenty have been saying it will be the property market bubble bursting, but maybe it could start with something like this...

[speights boy]

The actual asset imploding is the symptom.
It will be the credit bubble bursting which is the cause.
It comes down to liquidity when lenders want their money back.....or regulators insist on it.

[PTILoveYou]

Chinese equities plunged the most in five years, led by brokerages, after regulatory efforts to rein in record margin lending sparked concern that speculative traders will pull back from the world's best-performing stock market.

http://www.nzherald.co.nz/business/n...ectid=11388745

Two years ago the Chinese stock market had been consistently ranked one of the worst in the world...

[eri]

Paul Bloxham, the HSBC economist who coined the phrase 'rock star economy' for New Zealand's economic growth last year

is forecasting the country will remain one of the strongest performing developed economies in 2015.

http://www.nzherald.co.nz/business/n...ectid=11389021

[eri]

hedgies

getting wedgies

INVESTORS checking out the Everest Capital website will find that the hedge fund offers strategies that

are diversified across themes, countries and sectors

So they wouldn't have expected losses from any one bet to be that significant.

But over the weekend, it was revealed that last week's surge in the Swiss franc had virtually wiped out the group's main fund, Everest Global Capital.

And Everest will not be the only one to suffer.

An expert quoted by Bloomberg said that some hedge funds were using 20 times leverage on bets that the Swiss franc would decline, meaning a 5% rise in the franc would wipe out the bet.

................

Nassim Taleb wrote his book Black Swan several years ago to point out the flaws in this reasoning;

despite their clever maths, traders are caught out by the events they don't anticipate and model for.

This black swan has turned some traders into dodos.

http://www.economist.com/blogs/butto...finance-sector

[speights boy]

Margin traders wiped out.
Overdue for some leverage lessons.

[Wayne]

I feel so sad now - not
Wait for the complainers to bleat.
Many are happy to take the gains but when they lose they look for someone to blame.

I never understood the value in margin trading other than making money.
Futures pay someone for a product before they produce giving them certainty of price but margin trades?

[drelly]

If there is a Chinese implosion, will it affect house prices here much? If anything, Chinese people are putting money here because they want it out of China.

[eri]

^

that's what makes it all so complicated to work out

+ risky to bet on

- a bad chinese economic meltdown

could lead to increased emigration here - more pressure on ak housing

- a different set of economic/political changes

could lead to ex-pat nz chinese selling houses here to get money home

- a really, really bad chinese economic or currency 'correction'

could tip the global economy back to 2008

...............

2008 didn't lead to a major auckland house price correction

does than mean the next one will?

or

that it won't again?

[PTILoveYou]

Yeah more and more chinese are looking to emigrate out of China, looking for better environment but also afraid of a chinese economic meltdown.

So the worst Chinese economy gets, the more chinese will emigrate.

Same thing if the Chinese economy gets booming, more chinese will emigrate also, but in the investor category.

Grass is always greener on the other side, and Chinese have always thought that the West is better.

[chrisgoh]

Many other countries are attracted to NZ, not only China. They are here for long haul, even set roots. Escalating number of westerners flock to the East too. The World is getting more integrated each day.

China economy has being growing average 10% for the past 30years. Economy growth below 7% is considered "SLOW". How many countries can even achieve 3% growth? The fact is China is still growing more than many countries.

USA is at the beginning of boom, NZ and the rest of the World will benefit.

Doom and gloom stories will always be there. If the doomers are patience enough they will get it right one day.

[Damap]

USA at beginning of boom? You wait the US is going to melt down big time again. They are still bankrupt and financially inept. Domestic oil has delayed the consequences for now but it will come.

[Wayne]

They are still bankrupt and financially inept. Domestic oil has delayed the consequences for now but it will come.

That applies to most of the world.
NZ included.
We are doing well because we are lucky at the moment - not because we structured it that way.
Like Australia - they thought they were clever but really hard commodities were in demand.
Nothing has changed really except hard commodities are out of favour and they are doing it hard.

[Damap]

I don't know if its luck. I know when I have travelled, particularly in America, they are just clueless. I think our isolation and small size actually insulates us to a large degree. We are responsible fiscally, have decent local demand for local products etc. I think we are harder to upset due to our size and we lack any particularly volatile dependence. (Is that how you spell dependence?)