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Daily Archives: March 28, 2010

China to launch stock index future on April 16

Reports WSJ:

China said it will introduce stock-index futures April 16, ending years of preparations that signaled policy indecision over the financial derivatives designed for risk-hedging, but also seen as vulnerable to speculative forces.

The announcement by the China Financial Futures Exchange, which will host the index futures, will give investors a means to bet on the direction of major share indexes and also allow them to make money when the market falls. It is expected to boost demand for index heavyweights such as major blue chips when trading resumes Monday.

Investors have eagerly anticipated the launch, which will expand options in a market where, up to now, being bullish has been the only choice because there has been little to shield investors in the face of a sharp decline. However, Chinese investors’ lack of experience in dealing with risky investment tools such as margin trading and short selling, and the country’s perilous experience with futures trading, form a big question mark over the index futures’ ultimate fate.

full text here

Greenspan on current state of economy

A few interesting points to note:

1. (this is not new in his thinking) It’s not only real economy that drives equity market: but also it’s the other way around: equity market also drives real economy. The channel is stock prices help ratings of corporate debt.

2. He is very worried about US fiscal situation;

3. China is a bubble waiting to burst. But the impact will be uncertain.

Is Larry Summers quitting Obama?

Larry Summers may leave his current post at the end of the year.

Watch this video analysis: