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The China Stockmarket crisis

Written By: - Date published: 12:08 pm, January 5th, 2016 - 103 comments
Categories: business, capitalism, economy, Economy, Financial markets - Tags:

China share market crash

I wrote about the Chinese Sharemarket crash about six months ago and followed it up with this post in August. It appears clear that the steps taken by the Chinese authorities are not working and on the back of poor manufacturing data, increased debt and Middle East turmoil a further sell down of Chinese stocks is occurring. And the rest of the world is feeling the effects.

My first post said this:

The Chinese share market has recently shown strong signs of being a bubble.  Following a sustained increase in share prices until July this year the market then hit severe turbulence, and previous gains have been well and truly wiped out.

Emergency measures were taken by the Chinese Government to slow down the sell off and showed how different the Chinese economy is to the US economy.  Steps included the suspension of the sale of shares once their value dropped by 10%, the suspension of new IPOs, new cheap credit, Government agencies actively buying shares and a ban of share sales by major shareholders.  A sign of how desperate the measures are that over half of all listed companies have the sale of their shares suspended.

But the turmoil in the stock markets has started again with the Chinese Market plunging 7% before trading was halted.  The Guardian has reported on latest developments:

The FTSE 100 index had £38bn wiped off its value as global stock markets started the year with a rout sparked by fresh fears over the Chinese economy.

Investors returning after the Christmas break were greeted by turmoil on stock exchanges, with Germany’s share index posting its worst start to a new year on record and London’s FTSE 100 putting in its second-worst start. As European markets closed, Wall Street looked set for the sharpest new year losses since the 1930s.

The sell-off rippled out from China, where news of weakness in the vast factory sector and a faltering yuan sent Chinese shares on the CSI300 index tumbling 7%, forcing trading to be halted. There was further pressure on the country’s stock market as investors anticipated the end of a ban on share sales by big stakeholders this week.

The deep losses and the share suspension – which came on the first day that China’s so-called “circuit breakers” came into effect – helped send the FTSE 100 down 2.4%, or 149 points, to 6,093.

Germany’s Dax was down more than 4% and France’s Cac 40 fell 2.5%. Oil prices were also volatile as tension between Saudi Arabia and Iransent Brent crude soaring in early trade only for prices to fall later on.

The 7% trigger automatically suspends trading for the day.

New Zealand is not immune.  The NZX has tumbled 1.35% as at the time of writing.

Things may get worse when the six month ban on the selling of shares by major shareholders ends later this week.

103 comments on “The China Stockmarket crisis”

  1. Ad 1

    When I was 18 I owned 3000 Equiticorp and 3000 Robert Jones. Then 1988 happened.

    Lesson best learnt young.

    • The Fairy Godmother 1.1

      Best to diversify and buy when down. Two shares is dodgy. Now could be a good time to buy. When everyone is buying sell and when they are selling buy. That said the whole system is a mess and you really need to look carefully at the company before buying. My husband spends a lot of his spare time on it.

    • Pat 1.2

      lol, snap Judge corp

    • ropata 1.3

      Lost $500 on Chase Corp, at age 17 (went in with a mate and his dad) … eventually got $20 back

      Lucked in on the dotcom bubble, made $1500 in 1999.

      Never put serious $$$ on the NZX, it’s run by insiders

  2. BM 2

    I think we’ll be ok.
    The Aussies are in trouble though and how that effects NZ is the major concern, could be good, could be bad.

    http://www.businessinsider.com/australias-economy-could-eat-dirt-in-2016-2015-12?amp

    • Rich 2.1

      There is no such thing as a housing shortage and 3% rental returns in the same housing market

      Word. Applies to Auckland in spades.

  3. gsays 3

    This sounds like a good news story.

    We can’t eat money.

  4. Manuka AOR 4

    To what extent is the NZ Super Fund protected from events such as this one that is unfolding?

    A significant percentage is invested in “Global Equities”. Which global equities, they don’t specify.
    https://www.nzsuperfund.co.nz/how-we-invest/actual-portfolio

    • Redelusion 4.1

      Got to take the good with the bad, NZ superfund is long term and well decertified , global equities go up and down, swings can be up to 40 percent, however long term after 100 years of data equities tend to return an average of 5 to 8pc, the volatility of shares is reflected the higher returns. Effective diversification ( company, country, sectors etc) , limited leverage and not trying to pick market or individual companies is the way to go ( ie simply left with market risk and not individual company risk )

      • Rich 4.1.1

        long term after 100 years of data equities tend to return an average of 5 to 8pc

        And you’re planning on living another 100 years to collect on this long term investment?

  5. Rich 5

    I wonder how exposed the Chinese banks are in all this. The yuan (RMB) is pegged by the government, in theory – how long they can maintain that peg has got to be questionable, as is how much dodgy lending has gone on and to what extent the government has been propping everything up.

    In a closed system like China, it’s likely that a banking crash could be worse than in the west and it was nearly pretty bad in the west.

    If the Chinese banks crash, the first thing that’s going to happen (apart from rioting depositors duking it out with the PLA) is that China won’t be able to pay for incoming commodity cargoes – leaving NZ with a lot of milk powder with nowhere to go.

    Next thing will be that the Aussie banks will be in the poo on both sides of the Tasman: defaulting corporate borrowers in the primary industries, the carry trade (on which they rely for funding) drying up as risk averse lenders get as far away from China as they can and both Chinese investors and primary industry workers defaulting on their personal lending.

    John Key will of course offer austerity and depositor haircuts as a solution for all this, whilst leaving his rich friends with as much of their ill gotten gains as he can manage – I wonder if the Greens or Labour will have the smarts to offer an alternative?

  6. Redelusion 6

    Chinese stock market very small percentage of Chinese finance sector, less than 10pc I believe,

    • Agora 6.1

      Deluded again ?

      • alwyn 6.1.1

        I have no idea of the percentage but, if the Economist is to be believed it must be very small.
        I have just been rereading an Economist Special Report (October 3 to 9 edition) that contains this little snippet. “The freely traded bit of China’s stock market is only the size of Switzerland’s”.
        Make of that what you will.

        • Lara 6.1.1.1

          That’s not what I was aware of.

          AFAIK the investment in the stock market in China up to their highs was quite large. Lots of regular everyday people playing on the markets.

          http://uk.businessinsider.com/statistics-on-chinese-invested-in-stock-market-crash-2015-7

          • lprent 6.1.1.1.1

            Certainly the formation of investment clubs and the like out in the rural as well as the urban areas looks like a classic deep gamblers market down to the retail level.

            There were a *lot* of stories like these.
            http://www.cnbc.com/2015/06/10/chinese-farmers-hope-to-harvest-bumper-stock-profits.html
            http://qz.com/443527/chinas-college-students-embrace-stock-trading-thanks-to-money-from-mom-and-dad/
            http://www.ibtimes.com/chinese-stock-market-hits-7-year-high-despite-bubble-warnings-farmers-look-cash-boom-1953995
            etc etc…

          • alwyn 6.1.1.1.2

            That isn’t necessarily in conflict with the view that the amount of money involved may be quite small even though the number of people with some involvement can be large. It will affect how much it worries the Chinese Government of course. Again from The Economist we have –

            “The free-float value of Chinese markets—the amount available for trading—is just about a third of GDP, compared with more than 100% in developed economies. Less than 15% of household financial assets are invested in the stockmarket: which is why soaring shares did little to boost consumption and crashing prices will do little to hurt it.”
            This was from
            http://www.economist.com/blogs/freeexchange/2015/07/chinas-stockmarket-crash

            “Lots of regular everyday people playing on the markets” you say. Doesn’t that remind you, like me, of the days of 1987 when every man and his dog in New Zealand seemed to do nothing but calculate how incredibly rich they were becoming from Judge Corp, Equity Corp, Renouf Corporation, Brierley Investments etc, etc.
            Nobody seemed to care that they had no idea what the companies did. It seemed rather like the South Sea Bubble of 1720.

            That is, however about all I can contribute on the size of Chinese Markets. It was only coincidence that I had just read the first statement I quoted and Chinese investment is not something I ever plan to do so I don’t really follow it.

            Edit. Why is it that while I am composing a reply someone puts something in that is very similar to what I am in the process of typing? I see lprent has commented on the investment club syndrome as well, although he is talking about today in China and I was talking about yesterday in NZ.

            • Lara 6.1.1.1.2.1

              Yes, it totally reminds one of NZ in 1987, up to October that year.

              This from The Global Economy; in 2012 NZ was placed 42nd with China not far behind at 45th in terms of rankings of Stock Market Capitalisation as a % of GDP (a simple measure of how big the stock markets are in each country). It would be interesting to see what % of GDP their market was at the peak in June 2015.

              Interestingly Hong Kong is first by an enormous margin.

              I wouldn’t say that the size of China’s stock market is small at 44.93%. That’s fairly healthy actually.

              It is my opinion that the fallout from the bursting of the Chinese stock market bubble will be the same as the fallout from the bursting of any other bobble in time and place.

              I don’t think the size of that market was small enough to avoid the usual fallout.

              As a % of GDP in 2012 Germany’s stock market was smaller than China’s stock market. And I don’t think that if the DAX plummeted commentators would be so brave as to suggest that the German stock market was too small to affect the German economy. So why are they doing it with China?

              My theory (and this is only an opinion) is that those of us outside of China aren’t yet ready to capitulate to fear. Our markets too will follow, but they’re not there yet. So we don’t want to see it.

            • Pat 6.1.1.1.2.2

              estimated 140 million nationals invested in Chinese share market… the top 10%?….the fact the chinese gov has had to step in yet again to cover their loses does nothing to address the fundamentals that caused the run in the first place.

        • joe90 6.1.1.2

          Can’t be arsed finding actual figures but according to this article the majority of Chinese capital is raised through state owned banks with the stock market dominated by almost exclusively retail investors as a small proportion of their overall wealth.

          http://fortune.com/2015/09/02/heres-what-you-may-not-know-about-the-chinese-stock-market/

        • lprent 6.1.1.3

          Big domestic markets at relatively low income levels produce big amounts of money, just like small rich countries with lots of overseas listing do.

          You really should look at the economic context rather than blathering. From my vague reading of SIX I’ve noticed that there appears to be quite a lot of headquartering going on there. Probably related to taxation https://en.wikipedia.org/wiki/Taxation_in_Switzerland#Profit_tax

          • alwyn 6.1.1.3.1

            “From my vague reading of SIX I’ve noticed that there appears to be quite a lot of headquartering going on there. Probably related to taxation ”

            Is that what is meant by “blathering”?

            • lprent 6.1.1.3.1.1

              Yes, I am glad you recognize the issue.

              I think I replicated your vague tone perfectly, except I said so explicitly and pointed more precisely where to go and find out. If you have a problem with it, then have a look at your comment to see the same things.

  7. Lara 7

    The US indices (specifically S&P500, Nasdaq, Russell 2000, Dow Industrials and Dow Transportation) are all most likely currently in a bear market. Lower highs, lower lows, all below their 200 day moving averages at todays close, and they’ve been persistent in fluctuating about that average for a while (the August move down they were all well below). None of them can make new highs, none of them can stay above their averages.

    It’s pretty common for the transportation index to be a leader. And so far from the all time highs in November last year the Dow Jones transportation index is the most clearly bearish of all, consistently making new lows.

    It is my opinion that this bear market has a long way down to go. I am expecting it to gather steam this year, and not end for another couple of years minimum.

    The Chinese stock market is a classic bubble, still in the process of bursting. The chart of that market is so classic a bubble scenario I have seen it used as an example in study materials of bubbles.

    When I take a look at charts of the European indices it also looks pretty bearish; FTSE, DAX and Hang Seng particularly.

    The Dow Jones World Index is bearish.

    What that means for the non technical analyst is this:

    When the stock markets are very bearish it flows through to the wider economy. Stock markets are often (not always, but most often) a leading indicator of the wider economy.

    What happened after the stock market crashed in 1929? The Great Depression. What happened after the stock market crash in NZ in 1987? A big recession in NZ. And most recently, how did our economy fare after the stock market crash of 2007 – 2009? It was bad enough to call it a “Global Financial Crisis”.

    Higher unemployment, falling or stagnant wages, worse conditions of employment, more homelessness, more poverty, more depression in NZ. Generally a more negative social mood. A tendency to extremes (we’re seeing this in Europe with the rise of the far right already), more violence, the rise of nationalism (in its ugly form) and racism. Generally a mood of “us or them”.

    For those invested in funds like KiwiSaver the amount of your investments will deteriorate. Those funds will be invested in the stock markets, and if they’re all bearish the only escape will be cash. And those funds don’t generally hold cash much if at all. The best you can hope for is the fund managers know what they’re doing and put funds in sectors that do better in bear markets (examples: consumer staples and services) and avoid sectors that normally perform worse in bear markets (for example financial and utility sectors).

    Or your fund manager may move funds from the stock markets to forex or commodities where they could actually increase funds and not see it all erode. But TBH I don’t have any faith in fund managers at all, they didn’t have a good track record for the last bear market of 2007 – 2009 (the Global Financial Crisis). I expect they’ll have a similar track record this time around.

    In a widespread bear market the best place to put your money is in cash (but be careful, NZ banks can take a “haircut” of your money if they get into trouble, Cyprus is an example of how that works).

    The best defence is to reduce debt.

    All those middle class folk in Auckland who have happily been increasing debt by mortgaging the house to the limit based on rising prices to buy their “investment” properties, BMW’s and jetskis may find the party is over soon. If they lose an income they may find themselves with negative equity, the house on mortgagee sale and their junk on TradeMe. Over-leveraging in a property market boom on the assumption that the boom will never end is just as risky and dumb as over-leveraging on a stock market boom.

    Looking at charts of the Auckland property market it too looks like a textbook bubble.

    One of the things about bubbles (which no government ever seems to learn) is there has not been ONE example of any government, central bank or other entity able to halt the decline once fear sets in. They all try, but none have ever managed it. Once fear sets in there’s nothing anyone can do except try to avoid the carnage (or short sell).

    This is my opinion only. But it is an educated and experienced opinion. Analysis and trading is what I do every day. I expect plenty here will disagree with my opinion, and that’s fine.

    • lprent 7.1

      I expect plenty here will disagree with my opinion, and that’s fine.

      I don’t. It has been pretty obvious for quite a while that there has been no real growth in any part of the world out there for quite a while. Apart from maybe sub-Saharan Africa (excluding the corruption pit of South Africa) and it’s extremely low base.

      Personally I think that what we are steadily seeing more of is the slowing of population growth across almost all countries and the effect of the aging demographic. That also means that the causation of bubbles is no longer alleviated as much by so many dumb over-optimistic youth. Think of the conservative investments of the last couple of decades of stagnant Japan being applied worldwide.

      But I also suspect that most of the commenters here are likely to be even more pessimistic than you or I are.

      • Lara 7.1.1

        My language may be mild and polite, but I do expect conditions economically and socially to be getting much worse over the next few years. MUCH worse.

        I would probably be one of the most pessimistic people here I expect.

        I’m putting my money where my mouth is too.

        Interestingly enough, the global birth rate is now very close to replacement rate. Which means once the cohorts are filled up the global population should stabilise.

        Except I expect that famine, war and the collapse of ecologies will reduce our populations first.

        As far as I can tell NZ is probably the best place to hide out. And hope for the best. While preparing for the worst.

        • Karen 7.1.1.1

          I don’t think you are being pessimistic at all , Lara. I think you are being realistic.

        • One Two 7.1.1.2

          I’m putting my money where my mouth is too.

          Short ?

          • Lara 7.1.1.2.1

            Yep.

            • Paul 7.1.1.2.1.1

              what does short mean in layman’s language?

              • alwyn

                Here is a reasonable definition in simple terms.
                It is out of
                http://www.investopedia.com/university/shortselling/shortselling1.asp

                “Short selling is the selling of a stock that the seller doesn’t own. More specifically, a short sale is the sale of a security that isn’t owned by the seller, but that is promised to be delivered. That may sound confusing, but it’s actually a simple concept. (To learn more, read: Benefit From Borrowed Securities.)

                When you short sell a stock, your broker will lend it to you. The stock will come from the brokerage’s own inventory, from another one of the firm’s customers, or from another brokerage firm. The shares are sold and the proceeds are credited to your account. Sooner or later, you must “close” the short by buying back the same number of shares (called covering) and returning them to your broker. If the price drops, you can buy back the stock at the lower price and make a profit on the difference. If the price of the stock rises, you have to buy it back at the higher price, and you lose money.”

                I’ve never done it myself, too nervous personally), but here is a broker that offers the service
                https://www.forsythbarr.co.nz/investing-with-us/le-short-selling/

                Read more: What Is Short Selling? | Investopedia http://www.investopedia.com/university/shortselling/shortselling1.asp#ixzz3wP0b1QWD
                Follow us: Investopedia on Facebook

              • Pat

                basically betting that a stock price will weaken

                • Paul

                  And how do people without shares prepare for this crash, apart from removing debt.

                  • Rich

                    Debt’s fine (in the short term), so long as you can manage the interest payments.

                    If there’s a bank crash, chances are there’ll be a Cyprus style haircut where the government (protecting their mates) will take depositors money (40%+ in Cyprus) and use it to bail the bank out. They won’t increase debt’s though, so if all your accounts are overdrawn, you’ll be fine.

                    When you hear a Chinese bank’s crashed, that’s the signal to make sure you’ve got as many banknotes as your bank will let you take out stashed somewhere.

                    • Paul

                      That could be messy.

                    • Pat

                      the implications for NZ of a chinese sharemarket crash are more to do with economic activity and contagion effect on other markets (including NZ) rather than threats to the banking system here, think substantial local company closures and unemployment from reduced activity…how the chinese gov will deal with the fallout from a crash is anyones guess but as amya points out the social ramifications in China may well be dire.

                  • Rich

                    Debt’s fine (in the short term), so long as you can manage the interest payments.

                    If there’s a bank crash, chances are there’ll be a Cyprus style haircut where the government (protecting their mates) will take depositors money (40%+ in Cyprus) and use it to bail the bank out. They won’t increase debts though, so if all your accounts are overdrawn, you’ll be fine.

                    When you hear a Chinese bank’s crashed, that’s the signal to make sure you’ve got as many banknotes as your bank will let you take out stashed somewhere.

                    • alwyn

                      That is not what a “haircut” would do.
                      The Government will not, repeat not, ” (protecting their mates) will take depositors money (40%+ in Cyprus) and use it to bail the bank out.”
                      I have several goes at explaining on this blog how the Government would handle a bank that went broke and it doesn’t involve the shareholders of the bank being left with any equity in the bank if it went belly up.
                      Why don’t you have a look at how it will work before you repeat this drivel you are offering.
                      The RB has plenty of stuff that explains it so simply even you should be able to understand it.

    • Ad 7.2

      Very sobering.

      Appreciate your expertise and experience in this area.

      • Lara 7.2.1

        You’re welcome.

        • Andre 7.2.1.1

          Lara, a bit off topic but since you seem to be willing to spend a lot of time trying to educate numpties, this financial numpty has a question about something that’s been bothering me a while.

          What downsides do you see about trying to reduce the amount of high frequency trading ? Something like a financial transaction tax, or deliberatively punitive taxes on capital gains on assets held for short periods? I can already hear the cries of “but, but, LIQUIDITY”, but that doesn’t look like a big deal to me. Similarly, I can see that price differences between willing buyer and willing seller will get a bit bigger and last a bit longer, but I don’t see how that creates a problem either.

          It does seem to me HFT has serious downsides, flash crashes being one, the fact that it’s a purely parasitic activity skimming money that should really go to buyers or sellers with longer-term timeframes is another.

          If you’re willing to respond directly, or can point me to something useful, I’d appreciate it.

          • Lara 7.2.1.1.1

            I don’t see too much downside actually to reducing HFT trading. Markets functioned very well prior to it’s inception and so if it was removed they’d still function well.

            And a financial transaction tax would have an effect on HFT I expect.

            HFT doesn’t necessarily add liquidity to a market. HFT is the method large firms use to execute trades. If they weren’t using this method they would probably still be trading with the same funds using another method, but probably still short term. That’s why I say it doesn’t necessarily add liquidity. But to be fair, that is an assumption that if they couldn’t execute HFT they’d use the same funds in the market anyway. Because it’s the funds, the readiness of funds to act as buyer or seller, that creates liquidity.

            What HFT is often used for is arbitrage; execution of a spread in two highly correlated markets. For example; a spread may be executed for a specific currency when a trader finds a difference in the quoted rate between two locations, say a difference in the Mexican peso quoted in Frankfurt and Tokyo. The trader would buy at the lowest rate and then sell at the higher rate to make a profit, but the difference is small so the trade is big to make a profit. The effect of this would be to bring the rates closer together, removing the difference. So it’s executed very quickly.

            There are several reasons for the flash crash and HFT is only part of it.

            It seems the main culprit that started it off was a huge order to sell on the E-Mini S&P contracts of about 4.1 billion dollars. Fear was part of it. HFT was another part. And the market rebounded quickly. And the primary trend resumed.

            Your perception that HFT is purely parasitic really relates to trading. HFT is just faster trading. All trading on markets, like what I do, is parasitic. It does add liquidity (in that allowing more people and more money to be active adds liquidity), but really that’s about it. When I trade and make money I’m sitting in front of a computer screen clicking buttons… I’m not making any product or providing any service for anyone but I’m making money. That’s pretty parasitic actually. I have no illusions that I’m performing a good public service or contributing much at all by profiting in this way. But this is the system I live in and I happen to be good at it.

            Liquidity is a good thing though. If you are a producer of a product, say corn, and you want to sell your product, if there are plenty of willing buyers in a global market then you can get the product sold at a transparent price quickly. If buyers were limited and it couldn’t be traded globally then selling your product would be a lot more difficult.

            I do a bunch of volunteer work to try and balance it out.

            As for deliberately punitive taxes on capital gains? We do already tax profits from trading. I pay tax on all the money I make. A higher tax rate on this kind of profit from this kind of activity? Now you get all kinds of unintended consequences, loopholes and expensive enforcement of it.

            A financial transactions tax would be simple and easy to enforce. Everyone would have to pay it, but for regular people they’d hardly notice it as the rate would not need to be high. 0.1% would be enough to raise a lot of tax revenue.

    • One Two 7.3

      The Dow Jones World Index is bearish.

      What that means for the non technical analyst is this:

      When the stock markets are very bearish it flows through to the wider economy. Stock markets are often (not always, but most often) a leading indicator of the wider economy.

      What happened after the stock market crashed in 1929? The Great Depression. What happened after the stock market crash in NZ in 1987? A big recession in NZ. And most recently, how did our economy fare after the stock market crash of 2007 – 2009? It was bad enough to call it a “Global Financial Crisis”.

      And the common denominator in every ‘financial crisis’ is …….?

      • Lara 7.3.1

        The common denominator is greed and fear.

        And people participating in a “market” dominated by their human emotions of greed and fear.

        We’re currently doing the same thing with property.

        It’s not the idea of a market as such, it’s more that it is human beings dominated by greed and fear participating in an activity together.

        • One Two 7.3.1.1

          Those play their part, that much is sure. The part they play has shrunk significantly IMO. (Not including propery)

          For mine, it’s the manipulation of [all] markets which is the core common denominator +/- 100 years

          Post ‘big bang’ , the ability to manipulate markets ,effectively became ‘total’

          • Lara 7.3.1.1.1

            I hear that complaint, that the markets are manipulated, quite often.

            Here’s a POV on that idea.

            If it is possible to manipulate a market then with all the power that the CCP have in China, why are their efforts to hold up their stock market not working?

            After all, in the example of China the CCP write the rules to suit themselves, have a large proportion of funds in their market under their control, control a lot of the debt and essentially all the money in China and can enforce their rules on the market without reference to annoying things like prior existing laws or constitutions. They’re the closest thing to a God of markets there ever will be.

            And yet it falls.

            I understand how markets can be manipulated short term (for example I’ve read “Reminicences of a Stock Operator” which explains how it can be done quite nicely in some examples) but big long term manipulation? Markets totally manipulated?

            I’m not buying it. Especially a bear market. Once fear takes hold its just a stampede, everyone wanting to get out all at once, crowd psychology on a grand scale.

            Most of the high frequency automated trading that is blamed for manipulation is done in very large amounts VERY short term. Seconds, minutes, to exploit differences in markets which will only exist short term. For example, a slightly different quote in the Gold cash price in two different geographic locations. What that kind of HFT does is to bring the differences back into line. Its not creating big movements.

            • One Two 7.3.1.1.1.1

              If it is possible to manipulate a market then with all the power that the CCP have in China, why are their efforts to hold up their stock market not working?

              I was not specifically referring to China, or the immediate goings on in that market

              Most of your response confirms how manipulation does, and is happening

              Long term manipulation occurs through degregulations and witnessed via LIBOR, ISDAfix, FX rate fixing, futures/options and ratings agencies. Of course the central bank rates are also long term market manipulation

              Legislation which creates manopolies also plays a major role in the manipulation of markets

              The description of HFT you provide is reflective, buts its been going on for +/- a decade or more and functions as a price setting mechanism. That makes HFT a long term manipulation mechanism in a pure form

              Market short sellers such as yourself, have bet on the stampede by using a market manipulating instrument. The psychological aspect does exist, but the emotional triggers can be controlled. Emotion is for the victims

            • Simple Simon 7.3.1.1.1.2

              Lara wrote-

              I understand how markets can be manipulated short term (for example I’ve read “Reminiscences of a Stock Operator” which explains how it can be done quite nicely in some examples) but big long term manipulation? Markets totally manipulated.

              With due respect Lara, manipulation is far more sophisticated now than it was in the early 1900,s when the Bucket Shops were in operation.
              Those days there were simple ticker tape machines, now days we have computers and crooks, and manipulation.

              And yes, I have read and own a copy of the above book and it well worth the read.

              • Lara

                I understand how HFT works. And that’s usually what gets the blame for manipulation.

                I repeat, if it is possible to fully manipulate a market then how come the CCP can’t hold up the Chinese stock markets?

                I understand how short term swings can be manipulated. But not longer term trends. I’m still not buying it.

                • One Two

                  Perhaps you managed to miss the references I made that enabled long term market manipulation

                  There are many more mechanisms existing in the past and present, than I referenced it was not exhaustive by any means

                  As a Technical Analyst, you should know what I have been talking about

                  Perhaps not

                  • Lara

                    I understand your references, yes.

                    I understand how this can influence short term swings, and it does appear that central bank pumping of funds into the markets has held them up over the years… or what we’ve seen since March 2009 is just another typical bull market. But at the end of the day I think we shall see that these manipulations are not going to be able to stop a bear market.

                    I do know what you’re referencing to. I just disagree. I’m not stupid nor lacking in experience nor qualifications. I just disagree.

                    And I repeat my original point about market manipulation.

                    If markets were so easily manipulated, how come the CCP can’t hold up the Chinese stock markets?

                    It’s not for lack of intervention.

              • Lara

                I wasn’t actually referring to what he wrote about in the Bucket Shops. I was referring to some of the manipulation he wrote about in the cotton and wheat markets via the exchanges, not bucket shops.

                Just because HFT has been going on for a long time does not mean it is manipulating the primary trend. It can impact price by small amounts in amount and time. That does not mean it impacts the larger trend.

                Short selling is not manipulating the market. It provides an out for willing sellers. It adds liquidity. Your assertion that short selling is manipulating the market is not my understanding of it, and I have never read that interpretation in any technical analysis textbook. Ever. Citation needed if you wish to continue such an assertion.

                Vernon Smith was the first economist to find find and study a bubble in an experimental market. One of the surprising findings from his work was that a bubble is more likely to be found when short selling is difficult.

                Manipulation of the LIBOR rate is an obvious example of manipulation of a rate. But the LIBOR rate is the rate set by banks between themselves. It is not a rate of an openly traded market with volume.

                When I’m speaking of market manipulation I’m talking of the indices, equities, forex and commodities. Large markets, globally traded, with huge volumes. Price determined by supply and demand; supply and demand of buyers and sellers.

                Your comment actually offers zero evidence that the primary direction of a market is being manipulated by anyone in any way. It’s just another assertion that “it’s all manipulated”. Which I hear everyday and yet have to see any real evidence of.

                • One Two

                  Over the 20-month period, Heath used complex trading products called contracts for difference (CFD) and traded through no less than nine separate share trading and CFD accounts, which allow traders to bet on the future price movements of shares, commodities or currencies

                  CFDs – A trader would know all about them. You appear not to

                  Imagine what a scaled up operation can do…

                  ” No real evidence ” = Head in sand or lying. Same thing from someone claiming to be a technical analyst

                  Your view that HFT creates liquidity is incorrect. As is your view that HFT are not market manipulation

                  Oh and look. The FCA investigating Lloyds for Gilt market manipulation. That’s news from yesterday

                  • Lara

                    That’s an interesting assumption. I actually trade CFD’s so I do know what I’m talking about.

                    HFT manipulates the market. Short term. I have never said otherwise. And I have never said it creates liquidity, I said it brings small differences in price back into line. If you’re going to have a dig at me and call me a liar then please do at least read my comments and get your claims straight.

                    Short selling creates liquidity. And I’m still amazed that you call short selling market manipulation. That’s a rather extraordinary claim to make. No technical analysis textbook I have read has EVER made that statement.

                    And your example of manipulation of the Libor rate is NOT an example of manipulation of a huge globally traded market with millions of participants.

                    Just because I’m not agreeing with you doesn’t mean I don’t know what I’m talking about, nor does it mean I’m wrong and you’re right.

                    We just disagree on the impact of market manipulation.

                    Plenty of traders and organisations with deep pockets will try to manipulate the markets, and plenty of them will achieve it short term. My stance is that it is not possible to manipulate a large globally traded market long term against its primary trend direction for any reasonable period of time.

                    You STILL have not addressed my main precept: if a market can really be manipulated, then how come everything the CCP is doing to the Chinese market isn’t working? They try to hold it up, and still it falls.

                    Your comments have now gone from just slightly rude to outright calling me a liar.

                    I have nothing further to say to you. I will not continue to engage with rudeness and hostility.

      • alwyn 7.3.2

        Actually it is generally agreed that the US entered into depression two months BEFORE the stock market crash.
        https://en.wikipedia.org/wiki/Great_Depression_in_the_United_States

        • One Two 7.3.2.1

          How does your comment relate to manipulation ?

          • alwyn 7.3.2.1.1

            It doesn’t.
            It relates to this statement in the comment I was replying to which says
            “What happened after the stock market crashed in 1929? The Great Depression. “. I am merely pointing out that the start of the depression was not after the stock market crash but preceded it.

            • Lara 7.3.2.1.1.1

              The economy went into recession in August.

              The crash began in October.

              Recession and depression are not the same thing.

              • alwyn

                You are technically correct. However I’ve never seen an economist who was willing to offer a strict definition of a depression.
                I offer you this definition of the difference
                http://www.economicshelp.org/blog/2226/money-personal-finance/difference-between-recession-and-depression/
                One should note that a recession is usually defined as being for a shorter period, ie two quarters, than a depression. Thus any depression, like the Great Depression, must start with a recession which would be the first two quarters of the overall depression.
                I think it is quite fair to say that a recession does not necessarily turn into a depression BUT that a depression will start with a recession and that is what happened in 1929 in the US.
                The best book I have ever seen on crashes was by Prof Kindleberger of MIT It was called “Manias, Panics and Crashes and was published in about 1978. Still relevant and readable.

                • Lara

                  That’s the problem. I focus on technicalities.

                  Plenty of recessions don’t turn into depressions.

                  But a recession which begins and then sees a massive stock market crash may then turn into a depression.

                  Yes, it’s a technicality, but a rather important one IMO.

                  I think we are both agreeing, but I’m pickier on the technicalities of the thing.

                  It’s still my position that a stock market crash most often (not always) that is big enough will come before a downturn in the economic cycle.

                  And that’s the problem with technical analysis and economics in general. Most often is not the same as always. There will always be exceptions.

                  My basic point in regards to the collapse of the Chinese sharmarkets (and others) is that it will have consequences in the wider economy, and those consequences usually (not always) develop AFTER the markets crash.

    • Lanthanide 7.4

      Are you familiar with Gail The Actuary? If not, you may find this very interesting: http://ourfiniteworld.com/

      • Lara 7.4.1

        Thanks for the link Lanthanide. I’ve not come across that before.

        From a quick perusal of her writing my take on why markets move up or down is mutually exclusive to her explanations.

        Other than that it looks pretty interesting.

        • Lanthanide 7.4.1.1

          She’s looking at current and long-term future trends, rather than explanations for why markets move up or down.

          • Lara 7.4.1.1.1

            She’s using fundamental reasons to explain market trends.

            I’m a technical analyst, and a contrarian one at that. It’s different. And much of the methods I use are mutually exclusive to fundamental analysis.

            So I disagree with much of what she’s written.

            That’s okay. Most people would disagree with my explanation of why markets move the way they do. I’m happy to disagree, and I’ll keep much of my reasoning to myself thanks as it would probably be scoffed at.

            My trading account is at the end of the day quantitative proof that I know what I’m doing when it comes to analysing markets and figuring out the next most likely direction.

      • left for deadshark 7.4.2

        Good link here folk’s. 😉

    • Paul 7.5

      Brilliant and realistic and sobering analysis.
      Should be a post in its own right.

  8. Ralf Crown 8

    Both the article and the comments reflect how badly Kiwis understand China. In a country as USA about half the population has savings, like insurance and retirement that depends on the share market. In China it is 5%. The share market in China can best be likened to a roulette game. Many people gamble small amounts on speculation, amounts they can afford to loose. Investment in China is done in persons, not companies, and mostly outside the banks and share market. The banks are hardly affected at all by a share market decline, but this system is a huge headache for the government who want people to use the banks as money can be controlled that way. They call it shadow banks and shadow investment, but people do not trust banks in China. They trust cash. The risk is much higher with New Zealand banks and kiwi saver. Remember that in the beancounter run New Zealand some 60% of investment companies went down the tube, and several banks were saved by tax money. China fared much better.

    • Lara 8.1

      A stock market crash is still a stock market crash. It still leads into the wider economy.

      And from what I have read so far investment in the Chinese stock market was widespread, regular every day people. Sure, some investing little amounts they can afford to lose, but also plenty investing what they cannot afford to lose.

      When stock markets crash they tend to result in economies doing rather poorly afterwards. Particularly if those who lose money in the crash were playing with borrowed money. As many were in China.

      I would be completely surprised if China does not take some time (years) to recover from this. And at this time I don’t think the crash has found the bottom yet.

    • mickysavage 8.2

      You may be right as far as China itself is concerned but my post was about the effect on the world’s economy. It seems to me that far too much of the world is leverage and any disruption has significant ripple effects.

      • GregJ 8.2.1

        Yes – which surely is the point – not so much how many Chinese are invested in their stockmarket but what the exposure of international banks, funds and companies are to the Chinese stockmarket. It’s clear that the inter-connectedness (is that even a word?) is the real issue – if China sneezes does the rest of the world get a cold (or the bubonic plague)?

        • Pat 8.2.1.1

          as the worlds second largest economy and i think the largest export economy , if China goes into meltdown or even recession the rest of the world will know about it….if the demand doesn’t come from China there is a dearth of replacement candidates….ultimately it will impact western banking but only after the rats and mice have been dealt to.

      • Ralf Crown 8.2.2

        I agree with you there. Unfortunately stock markets around the world have turned into casino games rather than investments and are too much tied together, but to correct the problem we must first understand it. When it comes to China hardly anyone outside the country understands. China is not a different country, but a different world, just about everything reacts differently to movements and activities. The real serious problem is the US markets and the almost totally absent controls and guiding and the disastrous US economy. It is the Wild West, and China has tried to copy that under pressure. As we see it works as badly as the “democracy” they tried between 1912 and 1949. Long term we must develop new ways of managing finance that is just not based on quick speculation profits as presently is the case. Those foreign investors who now are loosing money in China are those who gambled on the market, just as people in New Zealand gamble on an ever increasing real estate prices. Somewhere the circle breaks. It is like a chain letter.

  9. amya 9

    Some context I think is in order, as any crisis in China that is not addressed very quickly will have huge danger for whole world, but not just in ways contributors here have identified.

    China faces huge problems. Young people extremely well educated, travel extensively and have spent their entire lives with extremely rapid improvement in living standards

    I am 47, when child we were constantly hungry, amthough in the mide life. where I lived, horse and cart were main transport. Now, the middle standard of living much like nz. In my parents young life, famine and extreme control of individual by government. It difficult for people in West to understand the extreme rapid change of last 25 years. But little social or political change.

    All the young people know is this rapid and consistent improvement in living standards. They put up with the lack of social freedom, political freedom and government control as they have future. But many many young people over last 5 years struggle hard to find job. And often a ‘gift’ or bribe necessary to gain even low positions. Well educated, study overseas and exposed to true freedom, and no job or poor job and a declining or even stagnating economy means huge problems ABSOLUTELY will occur in China in next few decades. Probably sooner.

    As China is an empire, where community party rule without question over an empire where the areas richest in resources are ethnically culturally linguisticly and religiously not han and speak language other than mandarin, and suffer extreme discrimination and bigotry, there a social explosion inevitable in near future.

    1 in 5 people on earth are chinese. So in this century, thus is big danger to NZ economy.

    • Rich 10.1

      They should have stayed out of all markets. Just like western central banks

      ROFL!

      Central banks (certainly in developed economies) do little else but intervene in markets. Indeed, a book I read recently identifies a core difference between neo-liberalism and classical liberalism as being the former’s use of government intervention to create and sustain “markets”.

      Look at Auckland house prices – the boom is a consequence of the government deciding to maintain easy credit and not tax an income class, in order that middle class people can enjoy (illusory) wealth increases from their assets.

  10. amy 11

    Apologies for poor spelling in my post yesterday (no reading glasses!). Thank you Paul for link to article. I really cannot make much comment on economic matters as have no large understanding. However, some points from article and my experience I can make.

    ALL that community party knows is control, so of course they will attempt to control stock market from ‘top down’! This is the operating method they will use until the end of their rule. It is all they know and an increasingly desperate cling to power (although Mr Xi appears very hard to be trying to force change but after almost 70 years of Community Party holding absolute unquestioning power in New China, I think he will face a near impossible task.

    I believe that China could still be ‘economic savior to the west’ as article says, as there are huge oil and gas discoveries in Xinjiang, Mongolia and Xizang (Tibet). These dwarf those of the middle east and largely not even close to production. This will lift locus of power from Middle East and its instability to China. Also, China now increasingly produces high quality goods that rival those from the west in quality (although most Chinese goods in NZ shops are of the very lowest quality. Not understand why. Reflects badly on China.) Additionally, young Chinese crave western goods like BMW, Apple and so on. This will help west.

    But as my post yesterday say, real danger is if China socially implodes (and it already is starting to see frequent Islamic terrorist attacks from the Uighurs), and the young people rise up. This will be the worst disaster for the west it is possible to imagine. sadly i think that the community party will only ever give up power by force of a revolution, like was attempted with Tienanmen Square 1989.

    • Ad 11.1

      New Zealand and in particular Auckland has relied on Chinese immigration and Chinese capital for a couple of decades now. Both have been hugely beneficial to our society and our economy. New Zealand relies on China’s stability – and everything that I have seen from the Chinese government is that they will do everything that they can to sustain stability and growth.

      I had no idea about China’s internal oil finds and will do some hunting on that. In fact, on the contrary, reports from last year showed a clear peaking for its own production, no incentives at this barrel price for much exploration, and very pessimistic about Chiense shale:
      http://thediplomat.com/2015/07/china-peak-oil-2015-is-the-year/

      I’d be interested to see real analysis on the broader Chinese resource strategy and its political impacts.

      I don’t see your evidence for predicting a great Chinese implosion however. So far, China and Australia have been sound bets for New Zealand.

      • amy 11.1.1

        The signs of Chinese implosion were first seen by the west in 1989 (Tienanmen Square), which was an attempt at a violent overthrow of the Community Party at all levels. Rising levels of prosperity and increased freedom since then have kept the people very happy, despite the incredible lack of social and political freedom that still exists. If this prosperity dies or stagnates, huge problems will occur.

        And of course Community Party will do everything that it can to encourage and sustain growth. Only that will allow them to survive. That is the point I make. Take that away and Tienanmen Square will seem like a Sunday picnic.

        The signs of great Chinese implosion that you do not see are in fact very evident. Uighur terrorism is becoming very big problem. Increasing dissatisfaction among the young. Increasing resistance by the provinces of control from government. In fact, increasing resistance throughout China.

        Do you seriously think that the people of Xinjiang will continue to allow this situation to continue? Or the peoples of Mongolia? Or Sichuan? These will be as Chechnya was to Russia.

        And yes I think you are correct, NZ has benefited from Chinese immigration and the capital that we bring (unfortunately you will find that most of that capital stems from corruption). And this I tell you from personal experience.

        • Ad 11.1.1.1

          – Tinanmen was 27 years ago. They got the message.
          – Last major Uighur protests were 2009.
          – Hong Kong protests last year fizzled flat.

          Maybe you’ve got better on the ground experience about social disruption in China. I can’t tell. You need to start adding some actual evidence to your assertions that China is at some massive risk of falling apart.

  11. amy 12

    Totally incorrect. Most recent that was reported is October 2015. Xingang coal mine. Kunming 2014. Many many others. Just try Google. I typing this on my cell phone so not easy to post a link. Just do 2 minute Google search.

    Hong Kong is China in name only. It is more like Taiwan than China in my view. Culturally and politically. They have far greater freedoms than in China proper.

  12. Ralf Crown 13

    Both the article and the comments reflect hob badly Kiwis understand China. In a country as USA about half the population has savings, like insurance and retirement, that depends on the share market. In China it is 5%. The share market in China can best be likened to a roulette game. Many people gamble small amounts on speculation, amounts they can afford to loose. Investment in China is done in individuals, not companies, and mostly outside the banks and share market. The banks are hardly affected at all by a share market decline, but this system is a huge headache for the government who want people to use the banks as money can be controlled that way. They call it shadow banks and shadow investment, but people do not trust banks in China. They trust cash. The risk is much higher with New Zealand banks and kiwi saver. Remember that in the beancounter run New Zealand some 60% of investment companies went down the tube, and several banks were saved by tax money. China fared much better.

  13. tory 14

    new Zealand perspective its our massive house hold debt thats going to sink this economy.
    this article by Bernard Hickey shows how reckless the banks have been and stupid and greedy our fellow citizens have been.
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11545650
    to borrow 5 and up 7 times your income is stupidity to the max ,the people who payed for this recklessness are savers the youth people trying get there own homes and renters. when the music stops the debtors will blame everyone but themselves we must make sure the poor who have nothing to do with this mess don’t get the blame
    the big short and the inside job should be compulsory viewing

    • John Shears 14.1

      @ Tory, Thanks for the article reference.
      I found it very interesting as our first house was in Wellington back in the late 50’s and having arranged to capitalise the family benefit, plus our meagre savings plus an interest only loan for 5 years from a lodge, and finally an arrangement with the bank for an overdraft finally we owned a house.
      It needed re-piling,repainting, and its first do-up in about 30 years after being a renter all that time. After 5 years of hard work it was a very pleasant house and sold readily when I was transferred to Auckland some 7 years later.
      It belonged to my boss at the time we bought it and I can still hear him saying to the Bank Manager who had just said ” You realise that banks don’t normally lend on house purchases Ted” , and Ted said
      ” Come on Mac if you don’t lend it I will and that will come out of your bank anyway.”
      deal done.
      How times have changed

  14. Vaughan Little 15

    Could I move from the floor that the blog title be renamed “The Chinese stockmarket IS A crisis”?

  15. Rich 16

    Limit down again today.

    In my experience, if you have a dead short on a circuit, every time you reset the “circuit breaker”, it will trip again.

  16. When it comes to finance management, it is extremely difficult when it concerns a really huge country with constant fluctuating stock market patterns. Hence, it is relatively easy to see where the bubble is surrounding the China stock market as the exterior of the situation is quite obvious.

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  • Climate Change: Showing us how its done
    The government has been congratulating itself over the passage of the Zero Carbon Act, which sets out long-term emissions targets. But those targets are insufficient. Meanwhile, Denmark is showing us how its done:Denmark’s parliament adopted a new climate law on Friday, committing to reach 70% below its 1990 emissions in ...
    No Right TurnBy Idiot/Savant
    4 days ago
  • New Fisk
    No Right TurnBy Idiot/Savant
    4 days ago
  • Public sector dysfunction should not be allowed to undermine freedom of information
    Another day, another piece of legislation with a secrecy clause. This time its the innocuous-seeming Mental Health and Wellbeing Commission Bill, which (after establishing a new body and making it subject to the OIA in three different ways) includes the rapidly-becoming-standard clauses enabling it to request information from other public ...
    No Right TurnBy Idiot/Savant
    4 days ago
  • “This is England, this knife of Sheffield steel…”
    The state of the United Kingdom is fractured, torn up, shredded. The Empire is gone, it died a long time ago. And yet, the country is still tracking with a lead in favour of the ones who play to the ingrained, class-bound division for political gain. It is a disgrace ...
    exhALANtBy exhalantblog
    6 days ago
  • CORSIA, coming soon to an airport near you
    On 27 September, Greta Thunberg addressed a crowd of 500,000 at the School Strike for Climate in Montreal, saying: “You are a nation that is allegedly a climate leader. And Sweden is also a nation that is allegedly a climate leader. And in both cases, it means absolutely nothing. Because ...
    SciBlogsBy Robert McLachlan
    6 days ago
  • Cloaking hate speech and fake news in the right to free expression.
    It should be obvious by now but let’s be clear: The same folk who regularly traffic in disinformation, misinformation and “fake news” are also those who most strongly claim that their freedom of expression rights are being violated when moves are made to curb hate speech (as opposed to protected ...
    KiwipoliticoBy Pablo
    6 days ago
  • The Physics (and Economics, and Politics) of Wheelchairs on Planes
    Michael Schulson When Shane Burcaw flies on an airplane, he brings along a customized gel cushion, a car seat, and about 10 pieces of memory foam. The whole arsenal costs around $1,000, but for Burcaw it’s a necessity. The 27-year-old author and speaker — who, alongside his fiancée, Hannah ...
    SciBlogsBy Guest Author
    6 days ago
  • To Advance Civil Rights, Oppose Transgender Extremism
    We are very pleased to publish this submission is from Lucinda Stoan. She is a social justice activist, mother, and educator, based in Washington State in the  US.   This detailed and comprehensive source-linked overview of trans issues and what is at stake will be useful for many people, especially in ...
    RedlineBy Daphna
    7 days ago
  • Faafoi should be fired
    Newshub last night reported that Broadcasting Minister Kris Faafoi had apparently promised to help out a mate with an immigration issue. While its normal for people to approach MPs for assistance in this area, when you're a Minister, the rules are different: as the Cabinet Manual says, Ministers must "at ...
    No Right TurnBy Idiot/Savant
    7 days ago
  • Adrian Orr – The Reserve Bank’s Revolutionary Governor?
    New Zealand's Underarm Banker: It bears recalling that the “independence” of the Reserve Bank Governor was for decades held up by neoliberal capitalists as the most compelling justification for passing the Reserve Bank Act. Interesting, is it not, how the ruling class’s support for the Bank’s independence lasted no longer than ...
    1 week ago
  • Driving Us Up The Poll.
    Rubbish In, Rubbish Out: Put all this together, and it’s difficult to avoid the conclusion that anyone who responds positively to a pollster’s request to “answer a few questions” is just ever-so-slightly weird. Desperately lonely? Some sort of psephological train-spotter? Political party member primed to skew the poll for or against ...
    1 week ago
  • Jordan Williams, Colin Craig podcast series announced
    “Free at last, Free at last, Thank God almighty we are free at last.” ― Martin Luther King Jr. A long and bitter court feud between former Conservative Party leader Colin Craig and Jordan Williams has been settled, with an apology and compensation from Williams. On Tuesday, Craig sent out ...
    The PaepaeBy Peter Aranyi
    1 week ago
  • How plant-based meat is stretching New Zealand’s cultural and legal boundaries
    Samuel Becher, Victoria University of Wellington and Jessica C Lai, Victoria University of Wellington Earlier this year, the New Zealand-based pizza chain Hell Pizza offered a limited-edition “Burger Pizza”. Its customers weren’t told that the “meat” was plant-based. Some customers complained to the Commerce Commission, which enforces consumer law in ...
    SciBlogsBy Guest Author
    1 week ago
  • Scientific integrity requires critical investigation – not blind acceptance
    Some people seem to want to close down any critical discussion of the current research into the relationship between water fluoride and child IQ. They appear to argue that claims made by researchers should not be open to critical review and that the claims be accepted without proper consideration ...
    1 week ago
  • Climate Change: The shameful reality
    The government has been congratulating itself over the passage of the Zero Carbon Act, which sets out long-term emissions targets. Meanwhile, Climate Action Tracker has the shameful reality: those targets are insufficient:While New Zealand is showing leadership by having passed the world’s second-ever Zero Carbon Act in November 2019, under ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • More secrecy
    The government introduced a Racing Industry Bill today. As an urban who horse racing as pointless-to-cruel, and gambling as a tax on stupidity and/or hope, this isn't normally a bill which would interest me in the slightest, beyond grumpiness at more government money for a dying industry. But there is ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Unlikely online bully, Liam Hehir
    Check. Check. One, two, three, four. Is this thing ON? Hello readers, I logged in last night (yeah, it’s been a while) to mark THE END of the landmark legal case, Jordan Williams v Colin Craig, which (gulp) reached The Supreme Court, in which New Zealand’s most-defamed man was suing the politician he ...
    The PaepaeBy Peter Aranyi
    1 week ago
  • The Birth Of Israel: Wrong At The Right Time.
    Before The Birth: Israel’s most fervent supporters set their clocks ticking in Biblical times. They cite the kingdoms of David and Solomon as proof that, in the words of the Exodus movie’s theme-song: “This land is mine.” The majority of Israel’s backers, however, start their clocks in 1933 – the year Adolf ...
    1 week ago
  • Hard News: Public Address Word of the Year 2019: Korero phase
    In an unreliable, strange and confusing world, Public Address is proud to present a measure of comfort and stability by annually asking everyone what words or phrases sum up the year that's been – and then giving some of them consumer goods as prizes for being clever or simply lucky.Well, ...
    1 week ago
  • Generalist to specialist
    Both my parents are pretty handy – and they seem to have the right tools for most jobs in the garage and they know how to fix practically anything. A similar story could be told about their generation’s experience in the workforce – being a generalist was not unusual and ...
    SciBlogsBy Guest Author
    1 week ago
  • A “coincidence”
    When it was revealed that NZ First had tried to enrich itself from public office via the Provoncial Growth Fund, the Prime Minister assured us that everything was OK as Shane Jones, the Minister responsible for the fund, had recused himself. Except it seems that that recusal came very late ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Member’s Day
    Today is a Member's Day, and probably the last one of the year. After the marathon of the End of Life Choice Act, most of the bills up for debate today are uncontentious. First up is the second reading of Chlöe Swarbrick's Election Access Fund Bill. This will be followed ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Worse than I thought
    The Foreign Affairs, Defence and Trade Committee has reported back on the government's odious and tyrannical control orders bill. As expected, the fraudulent select committee process has made no significant changes (partly because they couldn't agree, but mostly because it was a stitch-up from the start, with no intention of ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • The cannabis bill and the referendum
    Yesterday, the government released its draft Cannabis Legalisation and Control Bill, which will be put to a non-binding referendum at the next election. I'm not a drug policy expert, but Russell Brown is, and he thinks its pretty good. And pretty obviously, it will be a massive improvement on the ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Hard News: The Cannabis Legalisation and Control Bill: pretty good so far
    As you're probably aware, the draft bill outlining the proposed legal cannabis regime to be put to a referendum late next year was published yesterday, and has already attracted a flurry of comment. It's notable that a good deal of the comment is about proposals that aren't actually new.A minimum ...
    1 week ago
  • Climate Change: Alignment
    One of the big problems in New Zealand climate change policy is the government working at cross-purposes with itself. It wants to reduce fossil fuel use, but encourages oil and gas exploration. It wants to reduce transport emissions, but then builds enormous new roads. The problem could be avoided if ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • How climate change will affect food production and security
    Climate Explained is a collaboration between The Conversation, Stuff and the New Zealand Science Media Centre to answer your questions about climate change. If you have a question you’d like an expert to answer, please send it to climate.change@stuff.co.nz According to the United Nations, food shortages are a threat ...
    SciBlogsBy Guest Author
    1 week ago
  • More bad faith
    Last year, the government announced it was ending offshore oil exploration by no longer issuing new permits. The idea was that the industry would then die off as permits expired. Except almost immediately the government revealed its bad faith, by saying they would extend permits and alter conditions to keep ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Banning foreign money from our elections
    The government has said it will ban foreign donations to political parties and candidates, and will be introducing legislation to be passed under all-stages urgency this afternoon. While I agree with the goal, I don't see a particular case for urgency, unless the government is concerned about a flood of ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Reforming the Education Acts
    The government introduced the Education and Training Bill to Parliament yesterday. Its a massive bill, which replaces both existing Education Acts, as well as various other bits of legislation (including some which are still proceeding through the House). I'll leave the serious analysis to teachers and people who actually know ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Bite-sized learning
    Amelia SharmanThere’s no one-size-fits-all when it comes to micro-credentials, those bits of bite-sized learning that can help workers stay on top of technological change.  What’s a micro-credential? While definitions vary, micro-credentials can be understood as short courses that allow people to learn new skills or have an existing competency recognised. ...
    SciBlogsBy Guest Author
    1 week ago
  • “Not The Labour Party We Once Knew.”
    All Smiles Now: Claire Szabo is taking up her presidential role after serving as the CEO of Habitat For Humanity. Which is absolutely perfect! After KiwiBuild was so comprehensively mismanaged by Phil Twyford, the party has not only elected a new president from a thoroughly respectable not-for-profit, but one who ...
    1 week ago
  • Marxist versus liberal methodology on transgender ideology/identity politics
    While much of the NZ left has transitioned to postmodern and identity politics in relation to transgender ideology, there are some very good articles about that deploy Marxist methodology in relation to this subject.  The one below is from the British marxist group Counterfire and appeared on their site here ...
    RedlineBy Admin
    1 week ago
  • Book review: The Farm by Joanne Ramos
    by Daphna Whitmore At Golden Oaks, a luxurious country retreat in the Hudson Valley, pregnant women have the best care money can buy. From the organic food, personalised exercise programmes, private yoga instruction and daily massages Golden Oaks looks like a country lodge for the upper class. Set some time ...
    RedlineBy Daphna
    2 weeks ago
  • Loosening the purse strings
    When Labour was running for election in 2017, it felt it needed to demonstrate "fiscal responsibility" and signed itself up to masochistic "budget responsibility rules". It was a fool's errand: the sorts of voters who demand fiscal responsibility are also the sorts of voters who believe that labour can never ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Climate Change: How to get there
    Writing in Stuff, Joel MacManus looks at what we need to do to meet the Zero Carbon Act's targets. The core of it:1. Convert 85 per cent of vehicles on the road to electric. 2. Eliminate fossil fuels from all industrial heating up to 300 degrees Celsius. 3. Double our ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • anti-vaxxers in a measles epidemic: so many ways to be untruthful
    “Anti-vaxers are a pro-death movement,” those comments from Dr Helen Petousis-Harris speaking about six more Measles related deaths in Samoa over the past twenty-four hours. “Anti-vaxers are a pro-death movement,” those comments from Dr Helen Petousis-Harris speaking about six more Measles related deaths in Samoa ...
    SciBlogsBy Alison Campbell
    2 weeks ago
  • Is Youth Vaping a Problem in New Zealand?
    Professors Janet Hoek and Richard Edwards, Emeritus Professor Phil Gendall, Jude Ball, Dr Judith McCool, Anaru Waa, Dr Becky Freeman Recent media reports have presented conflicting evidence on youth vaping in NZ. While some NZ school principals report concerns about increasing vaping on school grounds and confiscating vapes, ASH Year ...
    SciBlogsBy Public Health Expert
    2 weeks ago
  • In pursuit of “Freedom and Democracy”: Forever Wars in “America’s backyard”.
    “America the Beautiful!”, staunch defender of democracy, freedom and… a whole lot of despotic tyrants that play nice with what is called “the Washington Consensus.” America is indeed capable of immense good, but like any Nation, and most assuredly any aspirant to the mantle of Empire, great, immense evil. All ...
    exhALANtBy exhalantblog
    2 weeks ago
  • November ’19 – NZ blogs sitemeter ranking
    Image credit: The beginner’s guide to blogging I notice a few regulars no longer allow public access to the site counters. This may happen accidentally when the blog format is altered. If your blog is ...
    2 weeks ago
  • Whodunnit? Finding the mystery 1080 testing lab
    1080 is used to control pests in NZ. Its use is contested by a noisy few. A new report claims high levels of 1080 in rats washed up on a beach. Flora and Fauna of Aotearoa (F&F) won’t name the laboratory that did their testing. It has sparked a hunt ...
    SciBlogsBy Grant Jacobs
    2 weeks ago
  • Authoritarian Friends, Democratic Enemies.
    What Kind Of Empire? The thing for Kiwis to decide is what kind of empire they want to belong to. The kind that, while offering its own citizens democratic rights, demands absolute obedience from its “friends”? Or, the kind that, while authoritarian at home, takes a relaxed attitude to the ...
    2 weeks ago
  • Boris Johnson Goes Down
    It hasn't been a good week for the Conservatives, pollwise.  All major recent polls are showing their lead shrinking.Comparing each pollster's current (between 29/11 and 22/11) and previous most recent poll.Com Res - Conservative lead down 3 points.You Gov - Conservative lead down 1 point.Kantar - Conservative lead down 4 ...
    2 weeks ago
  • Interesting
    Within quick succession, Countdown maths wizard and twitterer Rachel Riley, alleged comedian David Baddiel and prominent lawyer Andrew Julius have all expressed very similar opinions / ideas:
    These #3billboards are going round London today, organised by ex-Labour people, horrified by what their party has become. Their principles haven’t changed, they’re ...
    2 weeks ago
  • Damn the Polls
    So, there have been a bunch of bad polls out for Labour, and even the Leftie's friend, Survation, have recently given the Conservatives a rip-snorting 11% lead.  You Gov's much vaunted MRP poll - which pretty much nailed the result in 2015 - is currently predicting a comfortable majority for ...
    2 weeks ago

  • Government takes bite out of loan sharks
    The days of vulnerable consumers falling victim to loan sharks, truck shops and other predatory lenders are numbered, following the Credit Contracts Legislation Amendment Bill passing its third reading tonight. “Too many Kiwis are being given loans that are unaffordable and unsuitable, trapping them in debt and leaving their families ...
    BeehiveBy beehive.govt.nz
    18 hours ago
  • New Zealand safer as Terrorism Suppression (Control Orders Bill) becomes law
    A Bill that prevents terrorism and supports the de-radicalisation of New Zealanders returning from overseas has passed its third reading, Justice Minister Andrew Little says. The Terrorism Suppression (Control Orders) Bill is a carefully targeted response to manage the risk posed by a small number of New Zealanders who have ...
    BeehiveBy beehive.govt.nz
    18 hours ago
  • Foreign Minister and Pacific Peoples Minister to visit Samoa
    Foreign Affairs Minister Winston Peters and Minister for Pacific Peoples Aupito William Sio will travel to Samoa on Friday, where New Zealand medical teams are helping Samoa respond to an outbreak of measles. “New Zealand has been working closely with the Government of Samoa and offering our assistance from the ...
    BeehiveBy beehive.govt.nz
    19 hours ago
  • New Pastoral Care Code will support tertiary students in 2020
    The Government has changed the law to improve student safety and welfare in university halls of residence and other student accommodation. The Education (Pastoral Care) Amendment Bill passed its third reading this afternoon and details of an interim Code of Practice setting out the Government’s expectations of tertiary providers have also been released. ...
    BeehiveBy beehive.govt.nz
    19 hours ago
  • New infrastructure funding tool to build housing developments faster
    A new tool to help councils fund and finance infrastructure could mean some housing developments happen a decade earlier than currently planned, Urban Development Minister Phil Twyford said today. “This new tool, developed by the Government in partnership with industry and high-growth councils, will allow councils to access private debt ...
    BeehiveBy beehive.govt.nz
    21 hours ago
  • Vision to unite the primary sector launched today
    Agriculture Minister Damien O’Connor has welcomed the release of a bold new vision for the country’s vital food and fibre sector. “I’m delighted that New Zealand’s major farmer and grower organisations are today supporting the Primary Sector Council’s vision – Fit for a Better World,” he said. “The international consumers ...
    BeehiveBy beehive.govt.nz
    22 hours ago
  • NZ congratulates PNG and Autonomous Bougainville Government on referendum
    Foreign Minister Winston Peters has congratulated the Government of Papua New Guinea and the Autonomous Bougainville Government for completing a well-conducted referendum on the future political status of Bougainville. “New Zealand supported the referendum process by providing technical advice through the New Zealand Electoral Commission and leading a Regional Police ...
    BeehiveBy beehive.govt.nz
    24 hours ago
  • Next steps for Upper North Island logistics
    In light of Cabinet’s position that freight operations on prime land in downtown Auckland are no longer viable, the Government will now embark on a short work programme to enable decision-making in the first half of next year, Associate Transport Minister Shane Jones says. Minister Jones is today releasing the ...
    BeehiveBy beehive.govt.nz
    24 hours ago
  • Surgical mesh restorative justice report received
    Associate Health Minister Julie Anne Genter has received the report back from a surgical mesh restorative justice process undertaken by Victoria University. The process heard stories, either in person or online submission, from more than 600 people affected by surgical mesh. “The report made for heart-breaking and confronting reading,” says ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • The Water Services Regulator Bill – Taumata Arowai a milestone for drinking water safety
    The Water Services Regulator Bill – Taumata Arowai , introduced to Parliament today, is a milestone for drinking water safety in New Zealand and will help improve environmental outcomes for urban waterways, rivers and lakes.  “This is a breakthrough for New Zealanders in terms of providing safe drinking water throughout ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Speech to new direction for criminal justice reform announcement
    Kia ora koutouE ngā mana, e ngā reo, e ngā matā wakaTēnā koutou katoaHaere ngā, moe maiKoutou ma ngā Rangatira Ko Anaru ahauKo au te Minita mo ngā TureHe Honore tino nui kei roto I ahau No reira tena koutou katoa Today, we are releasing two reports that are the ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • New direction for criminal justice reform
    The Government is looking to turn around the long-term challenges of criminal justice by taking a new approach to break the cycle of offending to ensure there are fewer victims of crime. Justice Minister Andrew Little released two reports today, Turuki! Turuki! from Te Uepū Hāpai I te Ora, and ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • New law sets up $300m Venture Capital Fund
    New Zealand firms expanding beyond the start-up phase are set for more support after today’s passage of the Venture Capital Fund Bill, Associate Finance Minister David Parker said. The Bill, which establishes a $300 million Venture Capital Fund, puts in place a key initiative of the Wellbeing Budget’s economic package. ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Zealand’s National Statement to COP25
    E ngā mana, e ngā reo, e ngā iwi, e ngā rau rangatira mā. Tēnā koutou, tēnā koutou, tēnā koutou katoa. Señora Presidenta, Excellencies, Delegates. International action A common thread that runs through the Paris Agreement is the commitment we have made to each other to do what we can to ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • $12 billion in extra infrastructure investment
    The Government is lifting capital investment to the highest level in more than 20 years as it takes the next step to future-proof New Zealand. Finance Minister Grant Robertson has announced $12 billion of new investment, with $8 billion for specific capital projects and $4 billion to be added to ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Strong economy, careful spending gives $12bn of surpluses
    The Government is forecast to run $12 billion worth of surpluses across the four years to 2023/24 as the economy continues to grow. The surpluses will help fund day-to-day capital requirements each year. These include fixing leaky hospitals, building new classrooms to cover population growth and take pressure off class ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Priorities for 2020 Wellbeing Budget outlined
    Budget 2020 will continue the Coalition Government’s focus on tackling the long-term challenges facing New Zealand while also investing to future-proof the economy. When the Government took office in 2017 it was left with crumbling infrastructure, severe underinvestment in public services, degraded rivers and lakes, a housing crisis and rising ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Minister welcomes data-rich coastline mapping tool
    The Minister responsible for the Marine and Coastal Area (Takutai Moana) Act 2011 (te Takutai Moana Act 2011), Andrew Little has welcomed the launch of an online geospatial tool that provides data-rich, dynamic coastline maps that will significantly boost research and evidence-gathering under the Act. Te Kete Kōrero a Te ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Chief Victims Advisor reappointed for a further two years
    The Chief Victims Advisor to Government Dr Kim McGregor, QSO, has been reappointed in her role for a further two years. Dr McGregor has held the role since it was established in November 2015. She provides independent advice to government on how to improve the criminal justice system for victims. ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Zealand tsunami monitoring and detection system to be established
    Foreign Affairs Minister Winston Peters and Civil Defence Minister Peeni Henare have today announced the deployment of a network of DART (Deep-ocean Assessment and Reporting of Tsunami) buoys. “New Zealand and the Pacific region are particularly vulnerable to natural disasters. It is vital we have adequate warning systems in place,” ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • DART Buoys Announcement
    DART Buoys Announcement Aotea Wharf, 9.30am 11 December 2019   Acknowledgements Acknowledgements to Minister for Civil Defence Hon Peeni Henare also here today. White Island It is with regret that this event shadows the tragic natural disaster two days ago. The volcanic eruptions on White Island have claimed 5 lives, ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Final steps for racing industry reform
    Racing Minister Winston Peters has welcomed the first reading of the Racing Industry Bill in parliament today. This is the second of two Bills that have been introduced this year to revitalise New Zealand’s racing industry. “Our domestic racing industry has been in serious decline.  The Government is committed to ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Funding to promote New Zealand Sign Language initiatives
    Minister for Disability Issues, Carmel Sepuloni, is pleased to announce that $291,321 is to be awarded to national and local community initiatives to maintain and promote the use of New Zealand Sign Language (NZSL). “New Zealand is one of the few countries  in the world where Sign Language is an ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • How New Zealand defines and recognises veterans
    Minister for Veterans Ron Mark has announced today the Coalition Government’s initial response to work completed by the independent statutory body, the Veterans’ Advisory Board. “When Professor Ron Paterson completed his review of the Veterans’ Support Act in 2018, he made a number of recommendations, including one which I referred ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government to fund lion’s share of Ohakea water scheme
    The Government will fund the bulk of the cost of a rural water supply for the Ohakea community affected by PFAS contamination, Environment Minister David Parker announced today at a meeting of local residents. This new water scheme will provide a reliable and clean source of drinking water to the ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Prime Minister statement on White Island eruption
    I have had the opportunity to be briefed on the details of the volcanic eruption of Whakaari/White Island, off the coast of Whakatane in the Bay of Plenty.  The eruption happened at 2.11pm today.  It continues to be an evolving situation.  We know that there were a number of tourists ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Govt funds $100k for weather-hit communities
    Prime Minister Jacinda Ardern and Minister of Civil Defence Peeni Henare have today confirmed initial Government support of $100,000 for communities affected by the severe weather that swept across the South Island and lower North Island over the weekend. The contribution will be made to Mayoral relief funds across the ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Death of NZ High Commissioner to Cook Islands
    New Zealand's High Commissioner to the Cook Islands, Tessa Temata, died in Palmerston North over the weekend, Foreign Minister Winston Peters said today. Ms Temata, 52, had recently returned to New Zealand for medical treatment. "On behalf of the Government and the Ministry of Foreign Affairs and Trade, we extend ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Wellington rail upgrade full steam ahead
    Transport Minister Phil Twyford today announced construction is underway on Wellington commuter rail upgrades which will mean more frequent services and fewer breakdowns. The upgrades include converting the Trentham to Upper Hutt single track section to a double track, with a new signalling system, upgraded stations and level crossings, and ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Defence Climate Change Implementation Plan released
    Minister of Defence Ron Mark and Minister for Climate Change James Shaw have announced the release of a Defence Climate Change Implementation Work Plan, titled Responding to the Climate Crisis: An Implementation Plan.  The plan sets out a series of recommendations based on the 2018 New Zealand Defence Assessment, The ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Govt releases funding to support South Canterbury
    A medium-scale adverse event has been declared for the South Canterbury district, which will see up to $50,000 in funding made available to support farming communities which have been significantly affected by recent heavy rain and flooding in the area, says Agriculture Minister Damien O’Connor. “Two weeks of solid rain ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Speech at launch of Rethinking Plastics Report
    Thank you Professor Juliet Gerrard and your team for the comprehensive and extremely helpful report and recommendations. Thank you too to all the stakeholders and interested parties who have contributed ideas and thinking to it. “Making best practice, standard practice” is a great framework for change and the action plan ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Govt pledges next steps on plastic waste
    The Government will phase out more single-use plastics following the success of its single-use plastic bag ban earlier this year and the release today of a pivotal report for dealing with waste. Prime Minister Jacinda Ardern has welcomed the Rethinking Plastics in Aotearoa New Zealandreport, released by her Chief Science Advisor ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • International student enrolments grow in universities and the regions
    International education continues to thrive as the Government focuses on quality over quantity, Education Minister Chris Hipkins said. The tuition revenue from international education increased to $1.16 billion last year with the average tuition fee per student increasing by $960. The total number of international students enrolled in New Zealand ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Speech to Government Economics Network 2019 Conference
    I want to talk about one of the most pressing issues in our national life: the housing crisis and the poor performance of our cities. The argument I want to make to you is that generations of urban land use policy have lacked a decent grounding in economics. The consequences ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • DHB leadership renewed and strengthened
    Health Minister Dr David Clark says new appointments to DHBs represent a significant changing of the guard, with 13 new chairs including four Māori chairs. Today 76 appointments have been announced to complement elected board members, as well as eight elected members appointed as either chair or deputy chair.  Four ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Tabuteau to advance New Zealand’s trade and political interests with European partners
    Parliamentary Under-Secretary for Foreign Affairs, Fletcher Tabuteau, is travelling to Germany, Poland, Austria, and Spain next week to bolster New Zealand’s political and trade relationships in Europe. While in Spain, Mr Tabuteau will represent New Zealand at the 14th Asia-Europe (ASEM) Foreign Ministers’ Meeting in Madrid. “New Zealand strongly supports ...
    BeehiveBy beehive.govt.nz
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  • Statement from the Prime Minister on Kris Faafoi
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