Blaming the foreign investor and the short-seller seems to have become China’s go-to excuse for the recent uncontrollable state of affairs in the Asian economy. The latest from Albert Edwards criticizes China’s latest policy measures in unequivocal terms and lambastes its inability to learn from previous financial crises in the Asian region.
Albert Edwards yet again makes a full disclosure at the beginning of this report, saying that his opinion does not coincide with Societe Generale’s and he is merely a “teenage scribbler” who is presenting the alternative view.
China should have learned from Pakistan, says Albert Edwards
China’s attempts to control its stock market collapse by suspending trading were also criticized by the famous strategist. Edwards said China should have learned from the mistakes of its much-loved neighbor, Pakistan. In 1998, to curb the rapid fall in its KSE100 index in the aftermath of nuclear tests, officials placed a “floor” on trading, meaning trading would be suspended when the index touched a certain lower limit. When the ban was lifted, the KSE fell even more drastically than before.
U.S. and Europe will follow China’s example sooner or later
More importantly, in the report, Albert Edwards is not just critical of China, but he also predicts that Western countries are going to crash in the same fashion. He said that a re-rating of equity markets in the U.S. and Europe from their bubble-like valuations is going to happen sooner or later:
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