According to the Chinese government and the Peoples Bank of China (PBOC), simply threaten to arrest "short sellers." Interesting to note that as soon as the news broke about those "evil short sellers" the Shanghai Composite Index took off to close up 5.8% higher, which is the largest percentage increase since March 2009. However, since June until today, the Shanghai Composite Index had been down 32%.
Global markets immediately took the clue and took off. (Our DJIA futures are up over 1% at 8 AM.) So, we know that the best friend of Wall Street has been the Federal Reserve System, which has pumped trillions of dollars of liquidity into the global financial system since 2009. Now, we can add another best friend to Wall Street, who are governments now declaring that anyone who shorts a stock is evil and should be immediately arrested. Presto! We now have a permanent bull market that will last into infinity. Aren't governments wonderful?
Prior today's announcement of arresting anyone for shorting stocks, these are the measures taken by China in trying to halt the stock market decline:
Global markets immediately took the clue and took off. (Our DJIA futures are up over 1% at 8 AM.) So, we know that the best friend of Wall Street has been the Federal Reserve System, which has pumped trillions of dollars of liquidity into the global financial system since 2009. Now, we can add another best friend to Wall Street, who are governments now declaring that anyone who shorts a stock is evil and should be immediately arrested. Presto! We now have a permanent bull market that will last into infinity. Aren't governments wonderful?
Prior today's announcement of arresting anyone for shorting stocks, these are the measures taken by China in trying to halt the stock market decline:
- Ban on major shareholders, corporate executives, and directors from selling stock for six months
- Freeze more than half of the listed companies from trading (approximately 1,400)
- Reduce margin requirements on stocks
- Block fund redemptions (one could not redeem one's mutual fund shares).
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