phrenzy
as long as all they ask me about is the air war...
- Joined
- 31 October 2013
- Messages
- 277
- Reaction score
- 16
Crazy times we live in that a country can take a 3 or 4 trillion dollar hit and have it barely make the news. If the DJ saw a quater of this downside over a year it would be a big deal. I keep hearing that because the run up was so big that this correction doesn't really matter but of course that's not true since so many people got in late to the game and a lot of the profits from the run up went offshore.
The big problem for the Chinese is that the vast majority of the money that was left in the market at the top was from millions of individuals buying on margin. That makes it a big political problem. The CCP's legitimacy is directly tied not just to prosperity but specifically to stabilliy and to growing the middle class, the group that is losing biggest here. You can expect to see a lot more government money pumped into the market and a lot more legal intervention. Unfortunately, the institutional investors in large part got out early and because so many people got in near the top and then got wiped out there's a limit to how much the money pumped in can get to the people it's intended to placate, most likely the institutionals will get back in when everything settles (possibly a long way off) and hoover up all the government cash chasing QE type programs for easy profits. They're already laying the blame at the door of evil foreign companies short selling, hopefully they don't belive their own hype and this doesn't spark off some offensive financial action. You'd hope they were more sensible than that but when it comes to mass dissatisfaction with the regime the PRC is often less than rational.
This is going to take a big chunk out Chinese budgets for a long while even if it's just in tax receipts as lots of small and medium businesses catering to domestic consumption suffers.
It will be interesting to see if this has a big effect on defence/space budgets going forward. The money is going to have to come from somewhere since they can't raise virtually unlimited money like the US can.
Meanwhile things are pointing towards this getting a lot worse before they get better here. Exactly how much is the trillion dollar question and the extent to which it will effect other global markets is hotly debated. If nothing else it's killing the commodities and will hit all the miners and energy companies which has more obvious ramifications here in Australia, although the US and Canadian oil and gas sector, already under pressure (in no small part thanks to OPEC) is going to be eating sand for a while. This sector is one of the big leaders in US jobs figures, both in raw unemployment figures but also more important in participation and income level figures.
I know it's not what the forum normally talks about but it's big news and will most assuredly have implications for the Chinese defence budgets and that's if it doesn't spill over into Chinese relationships with other countries which it well could. I'm sure somewhere at Langley there's a plan to take advantage of a situation like this to really cripple the Chinese economy. You could really do a lot of damage right now without ever firing a shot.
The big problem for the Chinese is that the vast majority of the money that was left in the market at the top was from millions of individuals buying on margin. That makes it a big political problem. The CCP's legitimacy is directly tied not just to prosperity but specifically to stabilliy and to growing the middle class, the group that is losing biggest here. You can expect to see a lot more government money pumped into the market and a lot more legal intervention. Unfortunately, the institutional investors in large part got out early and because so many people got in near the top and then got wiped out there's a limit to how much the money pumped in can get to the people it's intended to placate, most likely the institutionals will get back in when everything settles (possibly a long way off) and hoover up all the government cash chasing QE type programs for easy profits. They're already laying the blame at the door of evil foreign companies short selling, hopefully they don't belive their own hype and this doesn't spark off some offensive financial action. You'd hope they were more sensible than that but when it comes to mass dissatisfaction with the regime the PRC is often less than rational.
This is going to take a big chunk out Chinese budgets for a long while even if it's just in tax receipts as lots of small and medium businesses catering to domestic consumption suffers.
It will be interesting to see if this has a big effect on defence/space budgets going forward. The money is going to have to come from somewhere since they can't raise virtually unlimited money like the US can.
Meanwhile things are pointing towards this getting a lot worse before they get better here. Exactly how much is the trillion dollar question and the extent to which it will effect other global markets is hotly debated. If nothing else it's killing the commodities and will hit all the miners and energy companies which has more obvious ramifications here in Australia, although the US and Canadian oil and gas sector, already under pressure (in no small part thanks to OPEC) is going to be eating sand for a while. This sector is one of the big leaders in US jobs figures, both in raw unemployment figures but also more important in participation and income level figures.
I know it's not what the forum normally talks about but it's big news and will most assuredly have implications for the Chinese defence budgets and that's if it doesn't spill over into Chinese relationships with other countries which it well could. I'm sure somewhere at Langley there's a plan to take advantage of a situation like this to really cripple the Chinese economy. You could really do a lot of damage right now without ever firing a shot.
