Summary:
During the regulatory meeting for the asset management industry held by the China Securities Regulatory Commission and the Fund Industry Association in Guangzhou, participants were organized to watch one.
A few months later, the stock market crash came!
Text:
Before the market collapses, there are signs, and the supervision also pays attention to the risks before the market collapses. Both the market and the regulatory layer have understanding people, but the complex system of the market still collapses.
In addition to showing that bubbles are inevitable (the surface is institutional design, and the backside is greedy human nature), it is also difficult to predict when it will collapse, and the critical point of complex systems is very difficult to grasp.
At the end of January 2015, during a regulatory meeting for the asset management industry held in Guangzhou by the China Securities Regulatory Commission and the Fund Industry Association, participants were organized to watch a Hollywood movie "Margin Call".
This film is based on the subprime mortgage crisis in 2008, which is very suitable for the theme of the conference. The Chinese translation is "Shanghai ultimatum" or "interest storm", which literally means to cover positions or increase margins.
There is also a Taiwanese translation titled "Confessions of a Black-Hearted Trader".
Before the Guangzhou meeting, the China Securities Regulatory Commission had paid attention to the risk of capital leverage and carried out a series of "counter-cyclical" controls since the beginning of 2015.
The measures it took:
first, to control on-site financing;
second, to increase the supply of new shares (after the second quarter, the supply of new shares was significantly accelerated);
third, to announce several batches of typical cases investigated and dealt with by the “CSRC Law Network Action”, and to punish market violations of laws and regulations. Create a high pressure situation. On January 16, the China Securities Regulatory Commission imposed penalties on 12 securities firms that violated the rules of the margin financing and securities lending business.
Judging from the regulatory dynamics that followed, after the bull market endorsed the market’s rise in the early days, it repeatedly turned the steering wheel in advance when it was about to collide with the market, and the regulators finally returned to the regulatory standard in the later stage.
In view of the "5.30" in 2007, the supervision method of "chicken crowing in the middle of the night" has been criticized by the market, and now it can be clearly seen that the regulators are keeping pace with the times. "Controlling leverage", "checking violations" and "increasing supply" were the three magic weapons for regulators to prevent and control stock market risks at that time.
The first two magic weapons do not need to be said much, the third magic weapon is more market-oriented behavior, and it can also be described as adding more water if there is too much water. The IPO issuance has increased from one batch in January to the current one in January. In the two batches, Guotai Junan's IPO was said to be accelerated to the front after a giant like China Nuclear Power could not suppress the enthusiasm of the market.
From this point of view, there is a good observation angle for the bull market process, that is, the completion of the total social financing target. The capital market is the place for the allocation of financial resources. When the difficulty of financing is no longer a problem, the restless market should take a break.
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