Brick House | The failed rescue of the market was bloody! The stock market may enter a ten-year bear market ahead of schedule?
"Chinatown"-Official media of Chinese Australians
The rescue this time can be described as full firepower, interest rate cuts, RRR cuts, national team entry into the market and so on. Various policies support, but the administrative power is still no match for the market power. The sharp drop declared the failure of the rescue and the victory of the market.
1. I have always emphasized that the decline in China’s stock market is a normal response. It is a normal result of excessive leverage and excessive stock market bubbles. There is no need to rescue the market. The rescue will only lead to failure. Let the market return to the market. There has never been any country. The government was able to rescue the market from the height of the stock market bubble. The rescue will only aggravate the turmoil in the stock market, but it will greatly damage the government’s credit.
2. The deleveraging process of the Chinese stock market has just begun. In the calculation of the leverage ratio, in addition to the two financings of the brokerage, the more important is the off-exchange fund allocation, and the commercial bank loans entered the stock market in violation of regulations. Even more amazing. Just looking at the financing of securities companies is one-sided and not objective.
3. The Chinese stock market will enter a long bear market next. The ten years in the title are just an approximate number, not necessarily exact, but just to illustrate the long time.
4. It will take a long, long time for the leverage ratio to drop from 20% to 3%.
5. The stock market bubble burst in 2001 and only gradually recovered in 2005. It took four years to recover.
6. The stock market bubble burst in 2007, and the stock market gradually recovered in 2014. It took seven years to recover.
7. In the big bear market from 2001 to 2005 and the big bear market from 2007 to 2014, these two super long bear markets, because Chinese investors did not use leverage, although the stock market fell sharply and continued to fall, the problem was not Big.
8. In the 2015 stock market bear market, the P/E ratio was the highest in history, and the leverage ratio was unprecedented in the world. Therefore, the pain was the deepest. There was no leverage in the past, and it will take four to seven years to recover. This time the world's highest leverage ratio, It will take longer.
The pain caused by this leveraged bull market will be unprecedented, and the adjustment time will be unprecedented. The high bubble is originally a kind of plunder, and the bubble with the ultra-high leverage ratio is a kind of massacre. After the massacre, ecological If it is completely destroyed, it will take longer to recover. This is the law of the market, and no one, any market, or any government can violate it!
The article is reproduced from the WeChat account in Huangshan
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