Yes, I did read, with considerable interest, your Abenomics column, and I thank you for it. And you’re right, we may yet see an interesting and more appropriate comparison with the 2008 situation (especially if China tries the same economic solutions!). The interesting thing to watch regarding their stock market is, can Beijing make thei…
Yes, I did read, with considerable interest, your Abenomics column, and I thank you for it. And you’re right, we may yet see an interesting and more appropriate comparison with the 2008 situation (especially if China tries the same economic solutions!). The interesting thing to watch regarding their stock market is, can Beijing make their “plunge protection team” work? I keep thinking that all across China people are calling out, “Abandon ship!”.
Plunge protection teams "work" at most for only the shortest of terms. Pumping money into stocks that are losing value might succeed in halting that decline, but it does nothing to change the underlying fundamentals. And China's economy (and financial markets) are in trouble because of those fundamentals.
Beijing can halt the slide and even generate a market rebound. What it cannot do is prevent market forces from restarting the decline a few months down the road.
Yes, I did read, with considerable interest, your Abenomics column, and I thank you for it. And you’re right, we may yet see an interesting and more appropriate comparison with the 2008 situation (especially if China tries the same economic solutions!). The interesting thing to watch regarding their stock market is, can Beijing make their “plunge protection team” work? I keep thinking that all across China people are calling out, “Abandon ship!”.
Plunge protection teams "work" at most for only the shortest of terms. Pumping money into stocks that are losing value might succeed in halting that decline, but it does nothing to change the underlying fundamentals. And China's economy (and financial markets) are in trouble because of those fundamentals.
Beijing can halt the slide and even generate a market rebound. What it cannot do is prevent market forces from restarting the decline a few months down the road.
Yes, the Invisible Hand!