>In his view the market would "succeed" if it would always go up? Strategist? Seriously?
No, I think the Chinese genuinely believed the stock market would channel the excess savings that households have into private and public companies in a controlled manner. There is a genuine mismatch, the households save more than 30% with no place to invest while the corporate sector is burdened with debt thanks to overgenerous lending after the financial crisis.
What was supposed to be a gradual 15-20 year stock rise and conversion of debt into equity has become a boom and bust in a year or so. It also looks like a lot of small time investors piled on at the peak and might be looking at large losses. So kind of sucks for the small time Chinese investor who was looking for some growth (since they cannot invest anywhere else - property is already bust)
Maybe also consume Twitter's firehose and use some combination of frequency of mention + some kind of influencer score (e.g., "verified" accounts and accounts with lots of followers are more heavily weighted) to determine hype. I've been wanting to built a sentiment analysis system for trading for a while now.
> households save more than 30% with no place to invest while the corporate sector is burdened with debt
So what the Chinese are proposing is not exactly an investment, it is a transfer of debt from companies to individuals. Anyway, doesn't seem like an idea that would work -- investing in failing companies is a recipe for disaster.
This sounds like a conspiracy theory to me. The only way you could transfer money from households to corporations via stock would be if the households bought IPO stock. Once a stock is sold through the IPO, it doesn't matter what the price is, the company doesn't get any of that money.
The stock market can support more and bigger IPOs the higher the stock prices are. Companies can also issue more stock offerings as their stock price goes up to get access to that household savings.
No, I think the Chinese genuinely believed the stock market would channel the excess savings that households have into private and public companies in a controlled manner. There is a genuine mismatch, the households save more than 30% with no place to invest while the corporate sector is burdened with debt thanks to overgenerous lending after the financial crisis.
What was supposed to be a gradual 15-20 year stock rise and conversion of debt into equity has become a boom and bust in a year or so. It also looks like a lot of small time investors piled on at the peak and might be looking at large losses. So kind of sucks for the small time Chinese investor who was looking for some growth (since they cannot invest anywhere else - property is already bust)