Shanghai composite and Shenzhen composite down 7.4 and 7.9 percent respectively in one day.
The Chinese stock market has been one of the hottest tickets lately. The US stock markets might seem overvalued but in comparison to China with relatively new financial checks and balances, the US looks like a conservative old timer. Stocks in China are already deep into ridiculous pricing territory. You have an army of uneducated investors diving in hand over fist trying to get a piece of the action. In the US, there is little activity in the stock market from our massive low wage labor pool. In China, from poor to wealthy stock speculation is now taking the baton from the boring correcting real estate market. On Friday, all stock markets in China took it on the chin. The two largest exchanges with the Shanghai composite and the Shenzhen composite fell hard, 7.4 and 7.9 percent respectively. How bad is that? Imagine the Dow Jones Industrial Average losing 1,300 points in one day. That is how bad it was in China on Friday.
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