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Tuesday, July 7, 2015

Market Thought... Greina Greece and China

The double whammy: the hellenic economic choke hold and the table tennis chinese equities market.

The Euro Zone wrestling match will soon come to an end. Caution thrown into the wind with the European Elite claiming to has "thought of everything" when considering a greece exit. The arrogance of such an assumption is mind boggling. There is no such thing as no risk. But hey, what do a bunch of technocrats have to loose if they haven't thought of everything and cause a financial crisis of epic proportions? Last time they did it it caused World War 2. There are estimates that suggest a potential $1.4T (yup, trillion) in damages. (Not to mention on a humanitarian level, a group of people are and have been causing the suffering of millions of people in the developed world. Fucking shameful.)

Then there is China. Miss Market is a fickle bitch, and rarely controllable. Respect her, let her be and nurture her desires, and she will reward you greatly. Back in December, it started to take off. Nowits simply approaching its pre-dec trendline.


The Weekly chart better illustrates the exaggeration ofthe upswing.


A look at the monthly doesnt really inspire worry. Classic resistance.


Nothing in these charts inspire a high degree of fear. Its typical over heated scenario, and classic extreme pull back. The aspect of this that does inspire fear are the actionsmof the central gov trying to manipulate non concerning action. Beggs the obvious question: Why?

I dont know. All I know is the level of danger when there is an equity market ~70-80% retail folks, that are now able to leverage their homes as margin to trade equities!?!?! A stability fund with the backing of the market regulator and central bank, already looking destined to fail. A suspension of trading for about 1/7th of its entire market! ($1.4T, coincidentally enough. But the 1/7th stat may have been before the $3.2T in losses.)

China has ample reserves to wobble along for a while. The bigger concern in china, given the large retail investor presence, is the effect of the losses on the transition to consumerism.  

Either why, we got technocrats trying to convince us all will be okay. These people have mastered the control of the uncontrollable, and have gained this omniscient ability to think of everything.



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