As Chinese authorities hunt for imaginary culprits, investors should get used to wild stock market rides
Get used to the wild stock market rides. Tuesday’s action lacked the high drama of Monday last week – there was no slump in Chinese share prices or opening 1,000-point decline in the Dow Jones – but 3% off the FTSE 100 is quite alarming enough. At least three things suggest the stormy weather is here to stay.
First, Beijing appears to have learned nothing during the last month. Their search for scapegoats has led to the ridiculous spectacle of a Chinese journalist at a respected publication “confessing” on television to causing panic and disorder in the markets. There was no mention in Chinese state media, of course, of the real story – that over the course of a year, China’s authorities manufactured an extraordinary bull market that was bound to collapse because valuations reached absurd levels.
Continue reading…
Source: The Guardian Circular Economy RSS