China’s share and debt frenzy

Posted | 30/03/2015 / Views | 2715
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It looks as though the Chinese are well and truly joining the cheap money stimulus fuelled share frenzy with last week seeing the 7th straight session on the combined Shanghai and Shenzhen markets exceeding 1 trillion Yuan traded. Wednesday hit 1.24t Yuan which is $198b.  To give you a gauge, the New York exchange sees around $40 - $50b…  And like we’ve shown previously with record high margin debt on the NYSE, just check out the debt supporting this buying frenzy in the graph below.  Keep in mind this is in a weakening, not strengthening economy and one like many others around the world that is fuelling markets with cheap debt and lowering rates forcing that hunt for yield.  Seem sustainable to you?


China’s share and debt frenzy