Amid the usual perma-bull prognostication, nonsense, fraud and rampant willful blindness in the investment community, Chinese stocks closed today at 2147, the lowest level since Feb 2009 and now a full 35% lower than the latest “recovery” peak at 3300 in July 2009. (Hey wasn’t that 1.3 billion population the commodity bulls talk about supposed to have prevented this? Where are a billion+ consumers when you need them?)
This is the same index that was above 6,000 at the peak of the credit bubble in October 2007 before falling 72% in one year to bottom at 1671 in October 2008. Worth noting is that the Chinese economy has been leading the global economic cycle for the past several years and its stock market has led other global stock markets by several months. In the last recession, the Shanghai market bottomed October 2008 some 5 long months before North American stock markets hit bottom in March 2009. If the Shanghai were to bottom any time soon, that would still suggest a few more months of potentially nasty decline in global stocks before the present cyclical bear market has run its course.