Yeah, when you can buy a share of X in one market for 100 and the very same share of X in a captive market one province over for 200 it is just human psycology, a 100% premium over a free markets free market price discover is no bubble, right? By the way, the new China futures is based on the price of A shares in the free market not in the captive Shanghai market so don't expect it to trade like Shanghai or fall with the same magnitude that Shanghai will if there is ever and easy way to arb between the two markets.
Chinese goverment has reiterated for the second time within one week in all national media that all investors should bear the potential risks that buying stock can cause. Apparantly around 4000 points is the bottomline of the bubble the government would tolerate. I expect severe policy to be published this weekend, chinese government always make multiple warnings before they push out severe policies.
You're right, they do warn a few times and then over the weekend they seem to usually do their business. Is there anything similar to the VIX regarding Chinese stocks? Anyone?
No, not at this point. There is no option in China now, and the concept of trading volatility is literally unknown to the majority of the investors.
Did anybody happen to read the story on the front of today's journal regarding a "chinese investor" who invested 30k into a stock based on the price having a bunch of "8's" in it because the number 8 happens to be extremely lucky?? He's up 50k on the investment and he attributes it to the "8's"... i think he might be on to something.
does the chinese government have a web site or online media that you can look at for policy statements?
http://www.chinaview.cn/ Official website of People´s Republic of China in English - Xinhua Press Agency