9 years ago
4
China Rolls Out Emergency Measures to Prevent Stock Market Crash
China's stock markets face a make-or-break week after officials rolled out an unprecedented series of steps at the weekend to prevent a full-blown stock market crash that would threaten the world's the world's second-largest economy.
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http://www.reuters.com
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I'm not familiar with the situation in China, but has this type of effort to prop up a market worked anywhere else? If investors do lose confidence, what type of effect could that have on the American or European markets?
The market was overpriced. Unless they can respond with equal upward pressure it'll still fall short of where it was. Greatly increasing liquidity and reducing margin requirements will only increase speculative activity like what lead to the bubble/bust in the first place.
They have the possibility of causing a short term rally to maybe even slightly prolonging the bull market, but it will need to correct eventually and this could make that correction worse. The main concern should be if the huge loss effects the underlying economy.
Not sure if anyone else has tried these efforts,but I do wonder what happens to the world economy if the efforts don't work. I guess I will keep a close eye this week.
GFC mark 2? Only China probably has the sense to stop before a full catastrophe.