Arnold Schwarzenegger, when he was Governor of California, used to go on begging missions to China; the state was running out of moolah, and he was trying to round up some investments (this year, it’s Gov. Jerry Brown’s turn). What they got was Shenzhen-based BYD, in which our favorite Uncle Warren Buffett, via Berkshire Hathaway, quickly took a 9.9% stake in 2009.
Senate leaders finally hammered out a debt ceiling deal today (Wednesday) that avoided a looming potential debt default. It also reopened the government that has been shut down for more than two weeks.
Yesterday (Monday), Money Morning Chief Investment Strategist Keith Fitz-Gerald appeared on FOX Business’ “Varney & Co.”to respond to China’s newly released blast on U.S. foreign policy.
Supercar-makers Lamborghini, Ferrari, and Rolls-Royce are reacting to the forces whacking global markets for luxury products: a corruption crackdown in China, Abenomics in Japan, and the Fed’s money-printing in the US. The idea that sales in Chin…
China is hungry and looking outside its borders for ways to feed its 1.35 billion citizens.
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“Seize the ground of new media,” Chinese President Xi Jinping said elegantly when he was telling state-owned media to get on the ball. So, effective…
In Paris, “Chinese” has a new meaning: money. This phenomenon shows up by the busload at luxury retailers where sales staff say a few words of bad Mandarin, instead of bad English, in hawking overpriced handbags and glittery baubles. Now A&…
“A Special Surveillance Chip” According to leaked internal documents from the German Federal Office for Information Security (BSI) that Die Zeit obtained, IT experts figured out…
China’s stock market has experienced another setback to its credibility when Everbright Securities’ trading error caused China’s version of “flash crash”. It was actually a “flash rally” generated by the brokerage firm’s massive buy orders (someone “fat-fingered” an extra zero or two). The firm was trading with its proprietary account.
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| The Shanghai Composite intraday (source:Yahoo/finance) |
Bloomberg: – “When the proprietary operation of the strategic investment department of Everbright Securities used its independent arbitrage system, it encountered a problem,” Everbright said in its statement to the Shanghai stock exchange last week. All other operations are normal, China’s fifth-largest brokerage by market value said.
Given the capitalization of the nation’s companies, China’s stock market is relatively thinly traded, making it more vulnerable to large orders. Sadly, anecdotal evidence suggests that retail investors often get “picked off” by trading programs managed by brokerage firms running “strategic investment departments” (which of course is not unique to China). It is no wonder that the percentage of dormant retail accounts has been rising for years (see post). This latest incident will further erode retail investors’ confidence in the nation’s domestic markets.
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