This: Justin China's biggest stock broker suspends short selling as markets tumble. You're not having a dream right now. Short Selling is currently getting banned in China Here are the details on the story: China's 6.3 tril stock selloff is getting uglier by the day. Property sector slump and geopolitical risk are negative.

China's valuation discount to India hit a record this week. It's to the point now that as the don't want to bury the lead here but short selling getting banned and they're basically running around trying to figure out how to stop this hemorrhaging. Just in China's largest brokerage, Cic Securities has banned short selling for some clients. According to Bloomberg, this comes as the Shanghai Composite Index their equivalent to the S&P 500 is having its worst start to the year.

Since 2016, China's stock market is down nearly 25% from its recent highs and 5% year. Today we're talking about this. Not even at the end of January, we're just over halfway done with January and it's down 5% That's not good. China's biggest broker curb short sales after stock rut.

Maybe it's not funny I Find it funny because it's the absurdity of just not the US market. But apparently Global markets get this. The short cell impact or the short cell ban is more so impacting retail. As in, it's basically impossible if you're in the Chinese markets to be a retail Trader to take a short position even if you think things are going to go down.

But guess who can keep shorting the big guys? How Wild Is that? that? The truly insane setup that we Comm see in the US markets where the big guys are treated better than the little guys is actually just a worldwide phenomena. So like I don't even know what to say about it. How in how just isn't that ridiculous that they're like oh, no, uh, we'll We'll stop the retail and then the big guys will do it. but we'll just increase their margin requirements.

It? it's absolutely insane. China's largest brokerage has suspended short selling for some clients in Mainland markets amid a deepening rut in the nation. Stock state owned Cic Securities has stopped lending stocks to individual investors and raise requirements for institutional clients Earlier this week, after so-called window guidance from Regulators Chinese shares have extended declines this year with no sign of let up after harrowing 2023 heading for their worst start to a year since 2016. While it's not immediately clear how many brokerages are restricting short sales, the move signals authorities' eagerness to put a floor under the market.

After earlier efforts including State buying of Bank shares failed to lift sentiment. So obviously if they can't step in and fix it, let's just blame retail. It's comedic. It's absolutely comedic.

But anyway, here's what Bloomberg had to say about the Banning of Short Selling in China. Probably too early to to try to see when or where the market will bottom. and yeah, I mean the the. the economy is still kind of slowly recovering.

but I think the confidence has not come back not only just in the investor side but also on the pirate entrepreneur. We have not been seeing the pirate investment be picking up in China and that's very important. So uh no wants to do private invest company some industry May benefit from the industrial policy telling from the government and they investor can still benefit from investing sub to some money in those Industries But having said that I mean the board Market I mean we need a more uh, structural Improvement and we haven't seen that yet. compared to the market, that is fairly pessimistic about any recovery Now in China I think that's probably gone too far I Think there is possibility that we will see modest fiscal and monetary stimulus through the year which can provide a flaw.

Um, but you can't ignore the debt overhang the property overhang. that's going to stay around the property sector and the shadow banking is just destroying their econ probably positive growth in a couple years they lot of L confidence investing into China at the moment I'm seeing with our Global Investors for sure. So on one hand side, they're looking into an economy which is doing more or less like supposed to, maybe a bit more deflation than what we would have liked There someone certain is around the the housing market that's that's clear. but I think what everybody's looking for is that policy signal that we're going to see rate Cuts We're going to see more fiscal spending and ultimately sort of a a bit of a bottom on under the market and I guess there was some speculation.

we were seeing a little bit of this yesterday with some potential buying an intervention yesterday in in the market so something of of a stabilized I think that's what we need at the moment. we have not really been calling for a big stimulus. we don't think they will do it and actually actually we don't think they should be. We know president hasf qu Simulus watch what happened in the US transformation of the economy.

So I think uh what we are looking from the government instead of looking for more candies from the government we really want to say uh can we actually go back to more like what China started in his reform back in early 1980s is more you know allow the P pate uh Enterprises entrepreneurs to the right incentive to to Really to do things to Freed them and give them incentive and also give the local government incentive for growth and um you know those are actually something uh probably uh slowed down a bit over the last one or two years and that probably need to come back and we are hopeful on that but we are not so sure I still think China's to be treated with caution I know it rebounded the most bullish view that we've had from many all invest second half last year. I Think the tower risks have receded, but you look at the sequential growth data earlier this week dropping from 1 a half% in quarter 3 down to 1% The property Market remains in a a problematic situation. We did see housing prices drop at the fastest rate since 2015, so the Peac Mill stimulus measures just aren't having the desired effect. They have certainly supported the downside risks, but where that upside comes from that that sustainable rebound it's not clear as yet.

And I think that's why investors are going to remain cautious at this point of time. You have to treat bounces like the one we saw yesterday. It may extend for a week or two, but until we see some broader stimulus measures more effective stimulus measures, you have to treat those rallies I believe as short covering rallies I Think valuations are very, very cheap. So it is interesting to look at upside.

We're looking at different structures as way that some of our clients can, but it's still not a market that has a huge weight in sort of a global balance portfolio and it doesn't seem to be one where you would really go and increase the risk sort of strongly just to put a bow on this. And maybe this is a little tin foil Hatty But I think this trajectory in this development is really supporting. Like I said my tin foil hat theory that I think within the next 10 to 20 years I don't think that China is going to remain the world's number two economy I Really don't believe that I think us us will remain Supreme just because of our global positioning. But I think what we are seeing is the early steps or the mid game steps of India becoming the number two and I actually don't even think China will fall to three I think it drops to four I think that there's going to be a South American country, Maybe Brazil becoming the number three individual economy.

so may some South American country. So basically I think it goes us China some South American country most likely Brazil and or then we're going to have China at number four. Um, so obviously feel free to bookmark this if you want, but it is a prediction for about 1 to two decades down the line. It's just when you have the banking issues, the shadow banking when you have the property issues, when you have just as the world is becoming more interconnected and people not really enjoying what the CCP is doing in the O their own country, you're going to have more just geopolitical dissent.

And then on top of that, The really scary thing for China is the way that their population lack of growth is playing out. It's it's going to become a topheavy society where most people are of older age and you get population collapse. So uh, I think they're really looking at some serious serious issues and that's kind of my thesis of why 10 to 20 years out I think China Falls all the way down to number four in terms of important Global Economies.