Topic: false signal resulted rally in China, and it won't stop. (Read 17587 times)

All of those who can traded on ShangHai A-stock. It is like a VIRTUAL PUBLIC COMPANY on ShangHai A-stock market.

Which agencies support this function? I suppose not all of them or most of them?

Guys please read this man carefully. Ten times if you really want to understand china.
Mr. Zhang you must be born before 1978 right? You are too matured to be younger...

Start your favourite stock exchange software, type to invest in a virtual company whose code is 200004, the money will be back in your account in 4 days. This money, is lent to any bank who offers the rate of that time, but you are not told which bank has this money. 200028 lends the money for 28 days. There are half a dozen such 'virtual companies'. There is no advertisement or explanation on neither stock exchange agent's website nor in the software, only if you know the code, you can lend the money, anyone who can buy stock option can do so. A lot are doing this.

How exactly does one lend money to a bank in China? (I'm in the US)

You surly studied a lot on the facts, so much so that you may even been to China or studies China, but your thinking is western. You are thinking on the line that one event leads to another, with a set of rule, not on the line that how leaders will consider the issue. In fact you talk as if the leaders ain't present in the picture.

The essence is: It's people making decision on people's fate. You are thinking whether someone did something wrong. IMHO this is a typical western idea. Please keep talking like that, that helps China be more aware of your way of thinking which would helps us in the end. But things happens in China is thus colored in your view. Wise investors avoids this coloring. You can analyses things with this coloring, but how do you predict things with this coloring?

Let's look at Mr Zeng's case again and see the decision making process. Is he prosecuted because he is not innocent? I took it trivial and I didn't study if he is innocent; there are other frauds going on unpunished. This morning on my way to breakfast my breakfast shop is there no longer, 50 police man lines up blocking the way as the building being torn down. (It is true and it is exactly 2 hours ago, location is east to Xi'ErQi subway station, I was too cowardy to take a picture.) They call it removal of illegal building, but there is another one just next to it untouched. Everybody are illegal, who decided which one to survive? Is it by rule or by the thinking of someone powerful? 吸储 (accept saving from public) is a serious crime (for its potential of public rally), and I am a customer of exactly one of such 'illegal' business which just got an award from local government. Will this company no longer be tomorrow? Will the wheel of fate turn and their leader be in jail soon? Perhaps, that's why they offer 15% yearly return (some do 30% or more). If they collapse I will accept my lose, it is not because it is illegal, but that it is chosen for sacrifice.

In my post I never metiond Zeng is innocent. He sacrified in a power struggle; his innocence or lack of it is irrelevent. Truth is, somebody want somebody dead and he managed it. Perhaps the victim displeased a some powerful leader, or he needs to be out of a bigger picture. Whoever did it has the authority (not lawful authority) to sell the asset of the company and frame him, and even if the central government knows this leader crossed the line by causing public rally (not by being ruthless), the central government cannot punish the leader on the spot, fearing it be taken as a success of defense by the people. The wise memebers in the centrol government may even carefullly remove the leader who sacrified Mr Zeng a few years later after the event, but not on the spot, least that authoritive image be maintained.

Look at the recent scrutiny against Starbuck. Is Starbuck being really too expensive? No, the government is looking for a sign of obiedience, like the obeidience they obtained from BMW, apple and western milk vendors. Just sit and watch the event unfold, Starbuck will folllow the order and lower the price. Obey, you have chance to earn back the money later. If you talk about facts, whether or not Starbuck is too expensive or guilty, you are seeing the woods not the forest.

I am from desert area of China. In school days I used to defend myself with a pen kinfe. I fought my way to Beijing and survived, although my citizenship remains provincial I consider myself lucky. My friend briefly jailed for trying to report the event of Q-i-a-n-Y-u-n-h-u-i. Married raising a kid without own house, I actuallly learned my English from reading Shakespeare and Tennyson. I never had a chance to go to an English speaking country, twice I was denied of visa for flight risk, such is how western system of law and personal freedom entrusts me. Why do I mention this? Our world is different. The opulence the west enjoys, we work hard to gain equal footing. From grass root I know survival and I know it is not easy here. Now China talks loudly about justice-by-law, while to us it is just a fasionable new trend, and other trends has flown before, what doesn't change is that you obey whoever can hurt you without being punished - this rule works everywhere. Admittedly China has gone a long way and now that you are likely to stay out of trouble trying to be law-abiding (unlikely really law-abiding, because they outlawed too many), but you are not so sure, especially in the mine-field of public stability issue like 吸储 (accept saving from public). Our Econimist Mao Yushi 茅于轼 is a public figure. He operates microfinancing for rural development 10 years and in an interview he said that he still dare not 吸储 (accept saving from public) which is the key step for his dream of self-sustaining rural development, and who are you to think you are to enjoy a better fate than a well respected audacious figure like him, whom if prosecuted would backfire PR disaster to China government? If, BTCChina is hacked and stolen beyond what they can cover on their own, and crowds gather together to protest for the lose of their family saving, that converts the event from a tax and license problem to a stability problem, they can't be confident about their petty life. If, for another scenario they are caught in the picture of fight-againt-corruption and someone want a number of money laundry to sacrifice, they can't be confident about their petty life. In both senarios I don't even involve government's attitude towards non-fiat currency. And I am speaking of cmmon sense, BTCChina knows it, it just take some courage to speak it frankly.

The chief enemy of Chinese government is, frankly, Chinese people. So is the second and third enemy. U.S. lines up the fifth enemy of Chinese government. You are not that important in this decision making.

China blocks western news outlet and facebook; don't have any idea China is doing this to fight U.S., they do it to fight us the people.

This can be explained in a very Chinese backround -- it can only start in China in this half of 2013, but I don't have time today to write another 1000 words article, just to give you the briefest information: GC001(Shanghai A-share 204001) at peak was 10%-yearly-return yesterday, and peaked 57%-yearly-return in the last month, that means banks desperately need money, caught unaware of People's Bank of China's tightening policy. It means in China if you have money you can safely lend them to banks (NOT borrowing money from BANKS) and earn so high a profit that you have to risk a lot to earn in the west -- also means as individual if you have money now it is a bad idea to spend them (should invest). Exchanges can do this safe investment (bnaks back it with long-term People's Bank of China's bond), with precise proforlio management you don't even have a delay in your customers cash withdraw.

This special condition lasted since June. If Exchanges are using this strategy, they could have adopted it 4 months ago, so it can even be prudent decisions to change to 0% now. If central bank no longer tighten their policy, you still have a grace period to announce a fee as banks gradually returns you the money.

Above are my speculation. Not a fact, but better than wild guesses floating around.

Besides, the zeitgeist is greed, we believe in monoplay in China, and won't let waste such a chance to grow monoplay.

Lend your money to the banks (not diposite to the banks) and earn rich return (some days 57% annualised), sounds crazy don't you think? Welcome to China. I did exactly this thing, taking money out of Bitcoin exchanges and lending them to the banks, earned my 8% annualised return for a short 3 weeks, and just in these 3 weeks BTC roared from 128usd to 199usd (bitcoin price). Poor decision.

For exchanges to work in the real world, it has turned out that oversight is helpful, to prevent things like insider trading, or to have subsets of people with more information than the average customer. Without even any pretence of such oversight, and a 0% fee model, you can draw your own conclusions as to what is likely going on.

0% fees is fine if that's the way you want to play it -- but then, you need to do two things:
(a) impose some sort of control to provide a downside risk on each sale -- e.g. you can't flip again for X hours

(b) Improve transparency and put in place controls to prove to people that you are not succumbing to the temptation to self-trade or give tips to your friends. (I'm not necessarily accusing exchanges of doing this now -- but I believe they inevitably will in a competitive environment with these dynamics).

but with close to 20 exchanges in China, I don't believe ...

I honestly do not understand. Are you saying that the 0% fees chinese exchanges have employed are creating a speculative bubble?

Or is it that they are faking their volumes and prices? How are the exchanges making money in the present without fees?

Are you saying they are front running their traders to make money off them? I'd like to hear more about this please.

Every customer likes low commission rate, exchanges compete with each other by offering low rates.

They are fighting for market share, as long as there's no government subsidies involved, it's a normal free market.

It can be cruel, but that's the nature of Capitalism.

I fail to see the difference between an ultra low commission rate (e.g. 0.001%) and 0%, or the connection between 0% commission rate and all the bad things you warned about.

I honestly do not understand. Are you saying that the 0% fees chinese exchanges have employed are creating a speculative bubble? Or is it that they are faking their volumes and prices? How are the exchanges making money in the present without fees?

If you look carefully, you'll see what BTCChina has is "ICP Bei (备)", not "ICP Zheng (证)".

ICP Bei is compulsory for all non-commercial websites run by Chinese individual/company, ICP Zheng is for commercial websites.

Technically, it is illegal for BTCChina to make a profit. The government has every reason to shut it down at their will, although I believe it is unlikely to happen any time soon.

Interesting stuff. Let me know if you want to guest write an article. http://cryptolife.net

All these Chinese exchanges with 0% fee. The result... A game to shake people down.

Running a BTC exchange is a risky business. So are BTCChina et al a charity? Heck no, they're likely all making lots of money -- the future of BTC be damned.  If an exchange's main business is Fiat in, flip, then Fiat out... It is not an exchange, it is a game... A "pass the bag" gamble.

I hope investors can see the huge information asymmetry with big players they have in this giant game of chicken. The only winners can be the biggest holders already. There is even no pretense of self- regulation in the interest of users.

With 0% fee in a near-100% speculative environment like China, exchanges can only operate fairly if they publish more data --- e.g. Volume per user. Without this, you may as well be playing Russian Roulette.

This should be abundantly clear today. The question is, where do we go from here? Because this is not sustainable at all. Smaller players will lose all.

A potentially very valuable tool is being damaged in the pursuit of profit. After all, what use is a trustless payment system when it's exchange value can not be trusted?

All these Chinese exchanges with 0% fee. The result... A game to shake people down.

Running a BTC exchange is a risky business. So are BTCChina et al a charity? Heck no, they're likely all making lots of money -- the future of BTC be damned.  

I hope investors can see the huge information asymmetry with big players they have in this giant game of chicken. The only winners can be the biggest holders already.

With 0% fee, exchanges can only operate fairly if they publish more data --- e.g. Volume per user. Without this, you may as well be playing Russian Roulette.

This should be abundantly clear today. The question is, where do we go from here? Because this is not sustainable at all. Smaller players will lose all.