“This is the first time in history that China has been easing its monetary policy into a surging stock market.” (China Cuts Reserve Ratio Most Since 2008 In Scramble To Preserve Equity Bubble, Boost Economy, 4/19/15, ZeroHedge)
Following hard on the heels of
- Friday’s tightening by China Securities and Regulatory Commission (CSRC) of the rules governing margin trading while loosening the rules on short selling (What, did they want a crash? They got one.); and
- the revelation that U.S. Fed reverse repos are going parabolic,
we now have this little weekend announcement from China:
The central bank of China (PBOC) cut of the Reserve Requirement Ratio (RRR) for all banks in its system, flooding CNY1.2 trillion into the market or about $200 billion, was far more than most expected.
I smell fear, but ZeroHedge says this easing will entice investors to buy the dip in China … temporarily.