This morning, the Shanghai Index fell 9.89%, and the Shanghai 180 was down 10.43% at 6:30 AM EST. At 7:30 AM, the DOW futures were down 73 points.
Today's Shanghai 180 chart and new commentary is on today's update.
*** This was the largest single day drop in China during the last 10 years. It wasn't precipitated by Chinese investors, instead, it was triggered by the Chinese government's fear of a crash.
The government cracked down on illegal investments and tightened bank lending. This morning's drop wiped out 107.8 billion in China's stock market. This action will hopefully save China from a really bad crash later this year.
The question now, is how long and far will the Shanghai drop?
Fear has now been set into the hearts of many investors, and it now depends on whether they are scared enough to want to go into a selling mode, or whether they will just be more cautious in the future. China's stock market system is not capable of handling large sell off volumes, so they are likely to just shut the market down for a few days at a time and add more restrictions.
Regards,
Marty Chenard
StockTiming.com
China the canary
Started by
Tor
, Feb 27 2007 04:49 PM
2 replies to this topic
#1
Tor
-
- Traders-Talk User
- 7,647 posts
Member
Posted 27 February 2007 - 04:49 PM
Observer
The future is 90% present and 10% vision.
The future is 90% present and 10% vision.
#2
LongShort168
-
- Traders-Talk User
- 1,600 posts
Member
Posted 27 February 2007 - 04:59 PM
107.8 billion == 13b USD...big deal 
less than goog down for last few days..lol
less than goog down for last few days..lol
#3
jawndissedi
-
- Traders-Talk User
- 1,018 posts
Member
Posted 27 February 2007 - 05:14 PM
China, schmina.
What you don't know and can't see very easily can hurt you. IMO, the events reported in the following story were bigger factors in today's liquidation than anything that happened in Asia:
Last update: 2/27/2007 3:59:12 PM
By Aparajita Saha-Bubna
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–A host of benchmark credit derivative indexes swooned Tuesday as a wave of risk aversion swept across credit markets.
The widening was fueled by a plunge in global equities with a more than 500 point drop in the Dow Jones Industrial Average in intra-day trade - the steepest in more than five years - accelerating the weakness in the afternoon.
Increased jitters around subprime mortgages and concerns about economic growth triggered by a steeper-than-expected drop in January durable goods orders also drove the indexes wider.
Risk premiums on the current version of the CDX index, the benchmark investment-grade derivatives index, moved as far as a midpoint of 36.5 basis points, more than six basis points wider than late Monday, said one market participant. Just last Thursday, the index was trading at a record tight of 28.50 basis points.
As of 3:41 p.m. EST, the index stood at 35.0 basis points, where another market participant expected it to close.
This means that a buyer of credit protection would have to pay $35,000 a year to protect a notional amount of $10 million of bonds against a possible default for five years - up from $28,500 on Thursday.
Leading the widening was the cross-over derivatives index, which is comprised of the credit default swaps of bonds straddling the investment-grade and high-yield divide.
The current version of the cross-over index was trading most recently at bid/offer levels of 136/137.25 basis points, 24 basis points wider on the day, according to data provider TradeWeb. This is the index’s biggest one-day move to date.
The cross-over index “has been trading with higher volatility for the last few weeks but in the last few days, as spreads have started to unwind, it has seemingly become the best indicator of fear in the credit markets,” said Tim Backshall, chief credit derivatives strategist at New York-based independent research firm Credit Derivatives Research, in an email to Dow Jones Newswires.
Credit default swaps are insurance-like derivative instruments that allow investors to protect debt against a potential default. They are also increasingly used to bet on the credit worthiness of a company.
What you don't know and can't see very easily can hurt you. IMO, the events reported in the following story were bigger factors in today's liquidation than anything that happened in Asia:
Last update: 2/27/2007 3:59:12 PM
By Aparajita Saha-Bubna
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–A host of benchmark credit derivative indexes swooned Tuesday as a wave of risk aversion swept across credit markets.
The widening was fueled by a plunge in global equities with a more than 500 point drop in the Dow Jones Industrial Average in intra-day trade - the steepest in more than five years - accelerating the weakness in the afternoon.
Increased jitters around subprime mortgages and concerns about economic growth triggered by a steeper-than-expected drop in January durable goods orders also drove the indexes wider.
Risk premiums on the current version of the CDX index, the benchmark investment-grade derivatives index, moved as far as a midpoint of 36.5 basis points, more than six basis points wider than late Monday, said one market participant. Just last Thursday, the index was trading at a record tight of 28.50 basis points.
As of 3:41 p.m. EST, the index stood at 35.0 basis points, where another market participant expected it to close.
This means that a buyer of credit protection would have to pay $35,000 a year to protect a notional amount of $10 million of bonds against a possible default for five years - up from $28,500 on Thursday.
Leading the widening was the cross-over derivatives index, which is comprised of the credit default swaps of bonds straddling the investment-grade and high-yield divide.
The current version of the cross-over index was trading most recently at bid/offer levels of 136/137.25 basis points, 24 basis points wider on the day, according to data provider TradeWeb. This is the index’s biggest one-day move to date.
The cross-over index “has been trading with higher volatility for the last few weeks but in the last few days, as spreads have started to unwind, it has seemingly become the best indicator of fear in the credit markets,” said Tim Backshall, chief credit derivatives strategist at New York-based independent research firm Credit Derivatives Research, in an email to Dow Jones Newswires.
Credit default swaps are insurance-like derivative instruments that allow investors to protect debt against a potential default. They are also increasingly used to bet on the credit worthiness of a company.
Da nile is more than a river in Egypt.
