1/3 Chinese stocks are up 24% in a week. A well-functioning and...
Michael Pettis@michaelxpettis
47 views
Sep 30, 2024
~1 min read
Advertisement
1
1/3
Chinese stocks are up 24% in a week. A well-functioning and stable market is one driven by a wide variety of uncorrelated investment and speculative strategies, so that information is interpreted differently by different investors.
ft.com/content/2e3b58… via @ft
Chinese stocks are up 24% in a week. A well-functioning and stable market is one driven by a wide variety of uncorrelated investment and speculative strategies, so that information is interpreted differently by different investors.
ft.com/content/2e3b58… via @ft
2
2/3
In this case there’s only been one strategy: front run government support for the market. The problem is that when everyone is looking at the same information and interpreting it the same way, the market tends to go either straight up or straight down.
In this case there’s only been one strategy: front run government support for the market. The problem is that when everyone is looking at the same information and interpreting it the same way, the market tends to go either straight up or straight down.
3
3/3
We saw how this works in 20015-16. The market surged 150% once it became clear that Beijing would do “whatever it takes” to boost the market, but when market sentiment turned, it turned astonishingly quickly.
We saw how this works in 20015-16. The market surged 150% once it became clear that Beijing would do “whatever it takes” to boost the market, but when market sentiment turned, it turned astonishingly quickly.