BAML: Irrational exuberance is leading us to the to next crisis in China

BAML: Irrational exuberance is leading us to the to next crisis in China. Bloomberg reports that it is Amateur hour on the Chinese stock market as new stock accounts open at the fastest pace since 2007 and the Chinese equivalent of penny stocks are trouncing the benchmark index. But Bank of America Merrill Lynch analysts warn China is at mounting risk of a financial crisis this year as growth sputters and deflationary pressures trigger a wave of defaults. Loans have jumped to 100% of GDP in the past 5 years... which is more than twice the pace of growth in Japan over a comparable period before the Nikkei bubble burst in 1990, or in the US before the Lehman crisis in 2008. David Cui from BAML writes when the sell-off happens, we suspect that it will not be orderly. Full article: (VIEW LINK)


Livewire News brings you a wide range of financial insights with a focus on Global Macro, Fixed Income, Currencies and Commodities.

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.