Monday 14 September 2015

Samurai Summary: Top Tweets 14/09/2015

There's been a fierce debate around economic data Chinese officials release that indicate the state of the economy with some in one camp accusing authorities of manipulating the statistics to suit political needs and others questioning how such practices could occur given China's prominence in the world economy.

The debate has gained momentum since government took the view that intervening in the markets would be the best course of action to prevent the stock market from crashing after a stellar rally left many dumbfounded as to the basis of such optimism.

This would definitely place the argument in favour of those who believe that data is skewed based on the fact that government has tried in vain to participate in the day to day activity but in the same breathe attempt to go unnoticed whilst doing so.
But nothing stopped the sellers this morning after a raft of data, namely industrial production and fixed asset investment both increasing by less than expected sending the major indices in China lower by over 4% only to retrace slightly into the close.

Government persistence to aiding the economy doesn't seem to be taking hold but as anyone who understands economics these things take time to feed through to the system. However what it has done is made the awareness around the problem stick out more vigorously than it had been over the last year.

My view is we've seen a dropoff in the amount of margin held in trading accounts which probably indicates the recent bout of volatility scared off the "coming of age" traders for the time being. By the phrase "coming of age" I mean the person who has no prior knowledge of a trading background but takes the risk of participating.

We've also seen a decrease in volatility from levels seen on the 24th August , but only for the time being although there does still remain at higher than usual levels.
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