Black Monday

[JohnnyTheHorse]

Another thing I have been watching and monitoring is correlations between the NZX and SPY. The NZX has had a very weak year compared to SPY, so I'm watching to see if this weakness is increased with SPY consolidation or whether we see overseas money flow back into the NZX.

[Entrep]

I'm not so sure if any of the narratives (Evergrande etc) are actually influencing this in any meaningful way. I think it's just technical driven after a great run. I have personally been watching for US markets to consolidate for a few months now. They have had zero monthly consolidation in almost a years time! It would take SPY to drop below the monthly EMA12 at ~4000 (a further ~8%) for me to start seeing red flags. It can drop to this point and still be a monthly bull flag, leading to continuation of the trend.

Still too much cash on the sidelines waiting to buy dips.

Yes it' a great excuse for a breather. Will be looking for any bargains.

[Tomtom]

For what it's worth I think the Evergrande stuff is totally overblown.

Concur but it does seem like these Chinese construction companies are built on shifting sands. Investors have a lot of inventory, there is a lot of partially finished dwellings on the books and Chinas population is peaking.

Demography is destiny.

[bull....]

i dont think the evergrande thing is over blown , contagion risk is the biggie and property makes up 25% of china's GDP. so if the sector tanks and china experiences a sharp slow down that will have world wide implications.

anyway im guessing the ccp will manage the default and save the world

[Getty]

Are we heading for another recession/depression?

Yes Pumps, its time for some dumps.

[alokdhir]

i dont think the evergrande thing is over blown , contagion risk is the biggie and property makes up 25% of china's GDP. so if the sector tanks and china experiences a sharp slow down that will have world wide implications.

anyway im guessing the ccp will manage the default and save the world

I am in two minds if CCP will try to save world markets , local speculators or being perceived as rich people saviour to local population . But they do will try to save the financial markets and overall economy ...they have to do a very tight rope walking as situation can easily go out of hand worldwide . But CCP has absolute power unlike rest of the world leaders so they are most well placed to get the best possible outcome for themselves out of this " Golden opportunity " offered to them by pyramidically balanced speculative apartment market of China ...it was in the making for many many years ...works well in rising markets but moment slight trouble comes then it collapses like subprime mortgage fiasco ...its almost similar in China ...all over leveraged as all thought property never fails

[alokdhir]

Black Tuesday or Black week ?? This time action seems more real then lockdown announcement ...So may get good bargains ...How long to wait ??

[Jaa]

Thursday is the day we will know if they won't pay the USD holders. Then they have 30 days to remedy the breach. ie 30 days of brinkmanship and instability. Long way to go yet.

For those who say Evergrande doesn't matter, just look at the share price falls of BHP and RIO.

China's property market and that in much of Asia has been a giant bubble for years. So many stranded assets. Fine while your economy can grow into them.

Here's another possible scenario, Chinese investors facing margin calls sell crypto assets and wait for it even.... NZ and Aus property.

[alokdhir]

Thursday is the day we will know if they won't pay the USD holders. Then they have 30 days to remedy the breach. ie 30 days of brinkmanship and instability. Long way to go yet.

For those who say Evergrande doesn't matter, just look at the share price falls of BHP and RIO.

China's property market and that in much of Asia has been a giant bubble for years. So many stranded assets. Fine while your economy can grow into them.

Here's another possible scenario, Chinese investors facing margin calls sell crypto assets and wait for it even.... NZ and Aus property.

All your possible scenarios possible depending upon the severity of the cut thus the margin calls ...All Chinese HNI are more leveraged into property then stocks as they consider property safer ...but when the time comes they may need to liquidate stocks too . Also they have leveraged investments in property stocks as proxy of property investment and they are collapsing ....may lead to some margin calls . Let Shanghai open after mid autumn festival then u will see real impact ...at present only Hang Seng bearing the brunt . Crypto surely will follow but overseas property will be last resort as its not easy now to buy overseas property for resident Chinese .

[bull....]

thursday morning also fed meeting outcome and any news on there tapering. anyway oversold bounce occurring now in after hrs futures