Can There Be a Market Crash If China Doesn’t Come?

An idle question: Can markets crash and stay crashed these days if China’s don’t do the same? I see that the Shanghai Composite is up 6% since the beginning of August, and it hasn’t had a down day in the last six sessions.

I wonder. Thoughts?


  1. David Tan says:

    China is a rigged mkt.
    Might turn out like Japan in 1987. Nikkei kept going up & peaked in ’89, despite ’87 Crash in US, Canada, etc
    Watch for China CPI on Aug.13 (>5% would be trouble?). Also, ISI estimates Bank of China holding billions of overvalued ABS from US (nice ironic twist to the US-China trade imbalance)

  2. Interested Investor says:

    The Chinese markets are a) so isolated from western investors and b) so much smaller than their western counterparts, that any perceived influence that they may have on what’s currently going on in our neck of the woods is just that: perception.
    I firmly believe that the now infamous February selloff in US equity markets had very little to do with the brief Chinese correction. It certainly influenced traders over the short term (as regards broader market sentiment), but its actual effect on the balance of supply and demand of various internationally traded financial instruments was quite minimal.

  3. Mean Mister Mustard says:

    I actually think China’s markets are less ahead of their economy than the US’s markets. China is actually growing and putting a lot of money to good use. The US has mostly been inflating the prices of all assets, including truly goofy ones, e.g. real estate in Florida.