In today’s NYT comes this sign of speculative excess in China: Day Trading Still Alive, Outsourced to China:
“By some industry estimates, as many as 10,000 people in China are doing speculative day trading of American stocks — mostly aggressive young men working the wee hours here, from 9:30 p.m. to 4 a.m., often trading tens of thousands of shares a day.
“Trading groups have exploded into China,” says Stephen Ehrlich, chief executive at Lightspeed Financial, a New York company that sells trading software to firms operating in China.
China prohibits its citizens from using Chinese currency to buy or sell shares of companies listed on foreign stock exchanges, though there appears to be no prohibition against trading stocks for an account owned by a foreign entity. That legal gray area has enticed several American and Canadian trading firms to set up shop here, at least partly to cater to wealthy clients seeking more diverse investment options.
Securities experts are puzzled by the operations. They question how the firms can profit by using inexperienced traders. They also wonder aloud whether the use of traders in China violates American and Canadian securities laws.
Hire a bunch of Chinese college kids, fund them and to teach them to day trade American stocks? Sounds like a terrific business plan! . . . I’m sure this won’t end badly . . .
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More Garbage for Our Dump of a Market
Source:
Day Trading Still Alive, Outsourced to China
DAVID BARBOZA
NYT, December 9, 2010
http://www.nytimes.com/2010/12/10/business/global/10daytrade.html
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