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5.5
There were several factors that led to the recent reverse of "Chinese Fever" in the US stock market. The first and most counter-intuitive one, should be the contribution from American investment bankers. Wall street really endeavored in closing the IPO deals for Chinese companies and companies with related concepts. Besides, the alleged accounting fraud or dampened outlook gave us reasons to short these companies. The tightening of margin requirement reduced trading interests of both sides, so in a bearish market it meant further diving: any quick rebound would be dead cat bounce. and in the end, we were amused to see two items: 1. not all investment banks were calling for underweight, for example, piper jaffray. 2. GS unit did a "prepaid variable share forward sale" with a shareholder, if leveraged, such contract could be very nasty if you happened to stand on the wrong side.
thanks for carrying on for all of us.
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