Monday, January 11, 2016

What Happens When Things inevitably Go Wrong?......CHINA

What Happens When Things inevitably Go Wrong

For a real time example of financial market leverage and consequences, one needs to look no further than the Shangai Index in China. 

That market is in a complete collapse as plunging prices are forcing investors to sell shares. 

While the Chinese government has injected liquidity, suspended trading in almost half of the listed equities and encouraged pension funds to buy securities, these actions have done little to stem the decline as investors 'panic sell' in a rush to safety.

That collapse, if history is any guide, is not done by any measure as shown in the chart below.


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