China – Desperate Times

“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

  1. 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
  2. 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.


About icliks

Biding my time in central ms ... yours too, if ur reading this.
This entry was posted in China, world economy, world finance and tagged , , , , , , , , , , , , , , , , . Bookmark the permalink.