Nearly 1,800 stocks, over 60% of issues traded on the Shanghai and Shenzhen stock exchanges fell by the daily limit of 10% and were halted according to a Financial Times report.
When contacted by the Financial Times, the China Securities Regulatory Commission refused to answer any questions.
The amusing comment of the day comes from Zhu Ning, deputy dean at Shanghai Advanced Institute of Finance: “If [the government] does nothing then all its previous efforts will have been wasted but if they continue with the rescue efforts then the hole will get bigger and bigger. We hope the regulators will respect the market and the rules of the market.”
In reality, previous efforts were wasted the moment they were tried. Price discovery is now lacking, and that creates a huge problem in and of itself.
Absurd Cries for More Intervention and Liquidity
On Monday, Zhu Baoliang, director of the economic forecast department of the State Information Centre, a government research agency, told Reuters the stock market crash was having a deep impact on the real economy and that it was “essential for the authorities to cut interest rates and loosen monetary policy further.”
Bear in mind that it was excessive liquidity that created China's property bubble followed by the stock market bubble.
Thus, Zhu Baoliang is another charlatan promoting the inane notion that the cure is the same as the disease. In effect, Baoliang wants to give alcohol to alcoholics.
Witch Hunt is On
The witch Hunt is on. That means the idiotic notion of blaming the shorts is in full swing.
Chinese regulators launched a website encouraging people to name the shorts, further stating those found guilty will be “dealt with severely”.
Loss of Control
ZeroHedge discusses shorts in What Loss of Control Looks Like.
Actually, regulators were never in control in the first place. It only appears that way when things are going well.
Shorts Not the Problem
Shorts are not the problem here. Nor were shorts the problem in 2000 and 2008 in the US. Indeed it was the shorts who understood the true nature of the stock market:
