ALBERT EDWARDS: China’s stock market crash foreshadows how the ‘global equity Ponzi scheme’ will fall apart
AKIN OYEDELE
BusinessInsider.com
Jul. 10, 2015
Societe Generale’s Albert Edwards thinks there’s much more at stake with what’s happening to Chinese stocks.
In a note to clients Friday, Edward writes that apart from the stock market, what could also suffer is the reputation of Chinese authorities, who are taking drastic steps in what’s meant to be a free market.
Edwards notes, via Templeton Investment’s Mark Mobius, that what the government is doing would end up inspiring fear, not confidence, in the market, because it shows desperation.
And that loss of confidence could spread to the rest of the world, because the Federal Reserve and the European Central Bank have created similar stock bubbles, according to Edwards.
Here’s Edwards, who said his views are not shared by Societe Generale (emphasis added):
The same loss of confidence in the omnipotence of the Chinese authorities will surely ultimately swirl westward. The Fed and the ECB have created similarly grotesque stock market bubbles in an effort to shore up their anemic economic expansions. Do not be surprised when the S&P collapses in exactly the same way as the Shanghai stock exchange, and don’t expect the panic monetary measures that will be enacted (more QE) to prevent the ultimate denouement of this global equity Ponzi scheme.
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