A Weekend Away from the Markets
We started the weekend looking for a break and got it. Of course, we couldn't resist posting something regarding a comment by a Chinese central bank official reassuring the world that China's stock market woes were over. Right.
By the way, despite keeping some distance from market news, I did happen to notice that after this first official pronunciation, the head of China's central bank decided to weigh in. Guess what? China's stock market woes are over. Surprised?
So where does this leave us to start this holiday-shortened week? Well, ex-U.S. markets, which did not observe a Labor Day holiday, were calm and positive. We're told they're settling down and getting traction. If this relatively calm action were to continue for any length of time, we'll likely be told that Europe's economies are "turning around." If it continues some more, Asia will follow. Then, lo and behold, China's economy, while slowing, will be deemed to be in a mild slump soon to be followed by the next phase in China's Great March to - wherever.
None of this will add up in the end. China's stock market was blown into a bubble by their government. The media was enlisted to not only suck retail investors into buying stocks, but to do so on margin. Hence the bubble and its quick inevitable implosion. What was the point? To goose the economy? Nonsense. It's to distract attention from China's economy which has been and will continue paying the price for years of malinvestment. Such malinvestment doesn't just disappear in a few weeks or months. We suspect years will be more like it.
But why complain if we're not greeted with continued stock market disaster this week after Labor Day. Enjoy it. It's like an extension of our three day holiday. We shouldn't sneeze at a respite from falling prices. If anything, just get yourself ready for more fireworks to come. You'll need your energy then.
LATE UPDATE: On cue, stock futures point up almost 300 points this Tuesday morn. Welcome back to the markets!
By the way, despite keeping some distance from market news, I did happen to notice that after this first official pronunciation, the head of China's central bank decided to weigh in. Guess what? China's stock market woes are over. Surprised?
So where does this leave us to start this holiday-shortened week? Well, ex-U.S. markets, which did not observe a Labor Day holiday, were calm and positive. We're told they're settling down and getting traction. If this relatively calm action were to continue for any length of time, we'll likely be told that Europe's economies are "turning around." If it continues some more, Asia will follow. Then, lo and behold, China's economy, while slowing, will be deemed to be in a mild slump soon to be followed by the next phase in China's Great March to - wherever.
None of this will add up in the end. China's stock market was blown into a bubble by their government. The media was enlisted to not only suck retail investors into buying stocks, but to do so on margin. Hence the bubble and its quick inevitable implosion. What was the point? To goose the economy? Nonsense. It's to distract attention from China's economy which has been and will continue paying the price for years of malinvestment. Such malinvestment doesn't just disappear in a few weeks or months. We suspect years will be more like it.
But why complain if we're not greeted with continued stock market disaster this week after Labor Day. Enjoy it. It's like an extension of our three day holiday. We shouldn't sneeze at a respite from falling prices. If anything, just get yourself ready for more fireworks to come. You'll need your energy then.
LATE UPDATE: On cue, stock futures point up almost 300 points this Tuesday morn. Welcome back to the markets!
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