The red vertical dotted lines on this chart identify the start and end of the recent slide in US market. The market in China was one of the few that felt no pain during this precipitous slide south.
Soaring High: If you have the chart link above open, you'll see the SSEC has gained nearly 450% in a little over two years. That's near enough to a gain of 200% per annum! No wonder Chinese investors (gamblers?) are so enamored with their market. It's easy to make money (and heaps of it) when the only way is up.
Jumping In: Stories abound of retired folk investing all their life savings in the market, and hairdressers etc giving up their day-jobs to play the market full-time. To retain staff, some companies have moved to giving extended breaks to enable staff to both trade and work. Everyone is jumping in, and it doesn't seem to matter what method you use - lucky numbers, lucky company names, new IPO's, anything - so long as you bet on the market going up it seems you're guaranteed to win. What a fun ride!
The First Bubble Is The Worst Bubble: In the US in 1929, things were similar - everyone who could be in the market was. Most had little in-depth knowledge of investing or the risks involved. Indeed most were simply gambling, although they wouldn't have said so. They were simply following the strident urgings of their favorite advisers. For the US, this was their first real, personal experience of a stock-market bubble.
Now it's the turn of the Chinese investor/gambler to experience their first bubble, and the consequences when it bursts may be very similar to the Great Depression in the US.
It's probably fair to say the vast majority of Chinese now playing their local stock market are as naive as American investors were back in the 1920's. And sadly they'll (eventually) get hurt as badly too. Eventually this market bubble will burst too, and wipe away 80-90% of its value, just like the DJI did all those years ago.
How High Can It Fly? If the ultimate high-point for the SSEC is comparable to that of the DJI at its peak, then it could climb a lot higher yet. It is currently trading in the 5100 - 5500 band, but could push to 6500 - 8000 if it is to mimic the Dow's 1920's rise.
Mind you, given the SSEC index has already gained over 2000 points so far this year, the next 1500 or so could easily be chalked up by early 2008. So it's likely we're much closer to the end of this awesome ride than the beginning.
This Is Not 1929: Left to their own devices, it's likely the Chinese would buy their market all the way up to the 6500-8000 range. But this is not 1929 and China, like all other countries, is part of the global village with huge dependencies on the rest of the world - and certainly not the least on USA. So the one thing that might throw a spanner in the works, is events unfolding elsewhere in the world.
The Last Puff: Bubbles get bigger and bigger with each puff of air blown into them. While we can't say for sure how big China's market bubble will get before it bursts, we can be certain we're much closer to the final puff that bursts the bubble than we are to the first puff that launched this crazy, fun ride to the stratosphere.
Shock Waves: Back in Feb/Mar of this year, when global markets fell in response to a down-day in the SSEC of over 9% market commentators published dire warnings regarding the bubble in China. Then a strange thing happened. When the markets re-gained their composure and headed north again, comment on China's bubble dried up and eventually got replaced by a chorus of economists and analysts trumpeting that western markets would withstand a collapse in China's market without much impact - after all western investment in the China market only accounts for about 5% (as at 2005) of the value of that market.
I wonder if they'd be so confident now that we have this emerging mortgage/credit/liquidity/capital crisis swirling all around us? The ramifications of a market collapse in China will be far more far-reaching than just the stock market. OK, "ramifications" is a very generic term - so you'd like something more specific? This is just one example scenario of many I could list: loss of savings and jobs rapidly escalates with the collapse and the local Chinese economy tanks. Civil unrest and anger threatens civil war. To try to save the crumbling economy the Chinese government has no option but to repatriate most of those trillions of USD they hold - in order to invest in the local economy with a huge program of public works that keeps employment humming and minimizes (or at least "limits") the fallout from the crash. What would that do to the USD?
The time to think about these issues is NOW! It may take a while for the shock waves to reach all of us, but reach us they will.
View the complete version of this article, including the chart of the SSEC Index here:
Edinburgh has some of the best nightlife and much of it is geared especially toward the student population that congregates there after hours. This beautiful and historic capital of Scotland has also been home to the massive MTV awards after party that rocked the city and is just a symbol of the high-powered party atmosphere the city represents. From the Bow Bar that offers 140 different malts to the favorite hangout of Prince William, the Opal Lounge, Edinburgh provides a rich tapestry of variety ranging from old world pub to sophisticated night club.
Some of the most popular locations for student revelry are Market Street, George Street, Lothian Road, and Grassmarket. The various establishments that inhabit these areas offer hen and stag nights as well as a marvelously eclectic diversity of musical styles for every party student's taste. Students can relax in comfort in the upper class elegance of the Opal Lounge on George Street or tear it up at in the wild nightclub atmosphere of the Cas Rock Caf?.
Partying in the vicinity of Cas Rock Caf? brings students to the gothic styled Witchery by the Castle where they can enjoy delicious foods while being regaled with historical tales of ancient times, castles and sorcery. For a more modern twist to an evening out a party night at Cabaret Voltaire or the Liquid Room in the old town atmosphere of Grassmarket is a top choice for many area students.
Edinburgh offers the finest in modern entertainment, old world charm, and historical settings that provide an exciting backdrop for student activities and relaxation. There are festivals and concerts at Ocean Terminal as well as many other fairs and world renowned entertainment. Edinburgh is celebrated for its yearly Edinburgh International Festival, a fair full of arts, local crafts, and world famous entertainment.
When it comes to musical entertainment MTV is the epitome of cultural success and the most famous MTV after party was held in Edinburgh because this Scottish city knows how to party with the best of them. Massive conferences and parties are often held at the Corn Exchange in Edinburgh. There are so many wonderful things for students to do after their studies in Edinburgh they will never run out of fun new adventures.
Studio 24, The Opium, and Why Not are hot spots for university students to kick back after a long day of studies and Lothian Road offers many cinemas, pubs and eateries for excellent entertainment options for students. PoNaNa is home to Thursday night "Bounce" parties for local students as well as "Mash Up Mondays" where partiers are regaled with DJ Duels, and a mix of various styles of music to dance away the night to. For a real thriller evening students can journey to the Espionage lounge just off Grassmarket and enjoy five floors of high powered James Bond styled atmosphere.
No matter what your taste in music and fun you will find it all in Edinburgh after hours. Study during the day and party all night in the historical capital of Scotland.
Both Murray Nickel & Gen Wright are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Murray Nickel has sinced written about articles on various topics from Investing and Trading, Home Improvement and How to Sell on Ebay. Murray Nickel is a mathematician, statistician, and professional trend trader. He offers a for global market indexes and index ETFs,. Murray Nickel's top article generates over 1600 views. to your Favourites.
Gen Wright has sinced written about articles on various topics from Terrier Dogs, Acne Treatment and Lose Weight. Khalid Al-Khames is a graduate from Edinburgh. After finishing his degree in 2007, Khalid decided to setup StudentsUncovered.com, an student portal packed full of useful information. For further information on Edinburgh's nightlife, visit. Gen Wright's top article generates over 1220000 views. to your Favourites.