As the SC market continued to slide the Finance Minister threated to start arresting SHORT sellers.This after halting any selling buy INSIDERS...thus if you work for a listed company and have 100,000 shares, cant sell. this is some heavy shit to attempt a further slide. As someone already pointed out ehre, if it goes further, or repeats the past 3 weeks, you can start seeing some srious shit come down....and its a global economy these days...so guss where it eventually comes to?

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"That's what the internet is for. Slandering others anonymously." Banky
“Been that way since one monkey looked at the sun and told the other monkey ‘He said for you to give me your fuckin’ share.’”

Another case of too much leverage in this system. In this instance, margin debt to finance equity purchases. The main problem with the Chinese financial system is the interest rate cap on bank deposits. Much like what happened in the U.S. with our deposit rate cap in the 1980's (disintermediation) and in the current low interest rate environment, artificially holding down interest rates will force capital to flow to higher yielding riskier investments.

I know many of you fear the free markets quite a bit. But government controls on the markets only creates even worse distortions.

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Hawaii (fuck) You

I don't know much about stocks and bonds..what caused the massive losses ?

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Leveraged purchases of stocks led to a big run-up in 2015.

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Hawaii (fuck) You

Battered women.

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Not a financial expert, but given the stranglehold China has on the US economy, I can only imagine we will feel this quite heavily.

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Free markets are fine as long as they are not accompanied by "too big to fail" bailouts.

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That was some shit huh?

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Elections have consequences.

Yes it was, and still is actually. Free market proponents historically advocate for non intervention, until they need intervention.

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My posting history would show that I would not have bailed out the financial system in 2008. The system needed a major flushing to rid us of Citi, AIG and other risk taking leaches on the system.

It would have been the most painful exercise in U.S. history, but it would have eliminated the moral hazard so ingrained in our system. Now we are much worse off.

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Hawaii (fuck) You

I would guess China has the strongest economy in the world. True?

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What is the driving force behind "too big to fail"?. Obviously corporations but there were a number of non corporate types pushing it also.

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Its per capita GDP is about 1/4 of ours, so not really. It does some things really well, which is the manufacture of cheap goods. They have also invested heavily in infrastructure with power plants, airports, rail, and roads. The system lacks the efficient allocation of capital, which has led to white elephant projects most notably ghost cities. They also have a weak financial system with banks loaded with crony dud loans. Their state owned enterprises dominate certain sectors and are awash in graft.

The major problem is that everything is done through state planning and control. They lack credible statistics, so we don't know what we don't know. Their brand of state capitalism has never been tested on this scale.

Where they are going to stumble for sure is with their one child policy. Their working age labor force has already started to shrink so they will not reap the demographic dividend that most emerging economies are getting right now. There are projections where their population could fall as low as 750M (from 1.3B) by the end of the century. In that type of situation you have a very old population against a small base of working age folks. Think Japan on steroids.

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Hawaii (fuck) You

When Congress voted down TARP the first time, do you remember what happened to the Dow? Then GE's Immelt called the Treasury and said they could not roll over their commercial paper lending. "Oh my God GE is going to fail". The money market funds were going to break the buck. Everything was about to collapse. By not letting it, we went back to the same old bad practices, junk debt, LBO's, over indebted corporations (buy back stock and pay dividends with cash flow and debt), government borrowing, unfunded pension liabilities, phony Fed interest rates, etc, etc.

The politicians blinked. The Bush administration let Lehman fail to teach Wall Street a lesson. No one knew AIG would fail because of it. Then panic set in. Even Goldman needed Buffet money. Every single financial institution was about to fail. I would have let it happen. We needed to get back to sound money.

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Hawaii (fuck) You

That is how I remember that particular crisis also. There was about to be run on financial institutions and the entire economy would collapse if not govt intervention.

That theory has been historically embedded in our economic philosophy also. Govt bailouts are here to stay and free market proponents are loathe to mention this while they have their hands out. It was Richard Nixon who once stated that corporations love catastrophes that's why they create them.

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Long time guy, I am right there with you. If you've followed me here, I have been accused of not being a Republican because of my true free market (libertarian) beliefs. I am fine with that. I am all for sensible regulation and a modest social safety net. What I am not for is crony capitalism, which is exactly what you are outlining.

FHLB giving loans to private banks at government borrowing rates.
Fannie/Freddie backing private mortgages.
Ex/Im Bank backing loans for private corporations
Licensing rules that effectively block out competition.
Regulation that only Fortune 500 companies can afford to navigate.
Agricultural price supports and handouts (how do you like HFC in your soda?)
And yes implicit too big to fail on large financial institutions.

Enough! Danny, is this Russia?

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Hawaii (fuck) You

I'm currently reading this book by Joseph Stiglitz where he hits on all the points that you address here. I think where you and he would differ is that he calls for more govt regulation. I'm kind of in between on that aspect but always laugh at those who bemoan the bailout until they need to be bailed out.

Crony capitalism is the biggest plague on both our economic, as well as our political systems. Lobbying is the largest industry in D.C. What does that suggest about our economic and political systems?

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Most of my opinions were formed from Ron Paul's book, The Revolution, and my interaction with financial institutions. I have also read a dozen or so other financial non-fiction books which provided me with a lot of insight into the pension problem, historical financial problems (read the Great Deformation by Stockman), Wall Street, and our political system.

The biggest problem with regulation is that is how large companies gain an advantage. I know that sounds crazy, but it is actually a big part of the crony state. The government creates costly regulations that only large entrenched companies can afford. In any case, you read the Great Deformation, and you will see where I am coming from.

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Hawaii (fuck) You

Nope. Germany does.

Pope Francis attacking capitalism again

http://www.enca.com/world/pope-slams-ca ... dung-devil

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Be well

GO BEARS!!!

Works both way, it's symbiotic. Although, I'm the end, they need "us" far more than we need them.

You are probably correct...now the question is "why?" I have my theories, but I'm not expert.
I think it starts with the simple concept of Nationalism. Germans make and buy their own shit and want no part of others...of course, they're more than happy to export.

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Germany is strong becuase it is small...thus controls....and oh yeah, that whole WWII thing when you get to start over????

Thats why.

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"That's what the internet is for. Slandering others anonymously." Banky
“Been that way since one monkey looked at the sun and told the other monkey ‘He said for you to give me your fuckin’ share.’”

Largest population of any European country not named Russia. Sure, compared to US or China, Germany is small, but they still have a huge economy - 4th largest GDP in the world.

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Not a mult.

But that limitd size allows much easier control...no matter if its 4th or 15th....and when you get your debt wiped out, makes it easier to start again. Its one of the cries from Greece...that Germany, Prussia has done what Greece wants a few times as well....and they are correct in that statement, but Germany had a plan....thats were Greece always falls short...in the 'How are you going to pay back this loan" ????

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"That's what the internet is for. Slandering others anonymously." Banky
“Been that way since one monkey looked at the sun and told the other monkey ‘He said for you to give me your fuckin’ share.’”

China has lost 4 trillion in their markets in 30 days.

Could the U.S. survive that if it happened here ?

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Define survive? I am taking my BUG OUT bag and heading to Ike's underground fortress...you suckers are on your own!

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"That's what the internet is for. Slandering others anonymously." Banky
“Been that way since one monkey looked at the sun and told the other monkey ‘He said for you to give me your fuckin’ share.’”

You might be happier in the liberal fantasy lad Chus resides in?

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Elections have consequences.

China's economic house of cards is built on an even weaker foundation than ours and that's saying a helluva lot.

Too big to fail, indeed.

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We all have private ails. The troublemakers are they who need public cures for their private ails.- Eric Hoffer

China depends on the the good ole' USA, in a fatal sense. As I mentioned before, they need "us" far, far more than we need them.

No real 1st world indigenous industry.