
It's fun until people start losing money
by
billdoskoch
on Thu 10 May 2007 05:21 PM EDT
From the BBC:
A fall in Chinese shares is a real possibility amid "risks of market euphoria", according to a report from Goldman Sachs.
It warns that optimism and speculative trading have pushed share prices ahead of market fundamentals.
If speculative activity continues among retail investors, it says that the market could develop into a bubble.
By all several accounts, there does seem to be an "atmosphere of irrational exuberance" in place in China. Shares can't soar forever, and given the simmering social unrest in China even with 10 per cent yearly GDP growth, I wonder what will happen if there's a market meltdown and a lot of this instant wealth disappears.