FAST FIVE: The Other US-China 'War': Plunge Protectors Versus National Team
The Other US-China 'War': Plunge Protectors Versus National Team As tensions increase between China and US over trade, democracy/Hong Kong, Taiwan, Huawei, and diplomatic travel, there is another 'struggle' going on that is all about appearance.
Notably, Bloomberg raises the specter of China's “National Team” – as state-backed funds are called – which is sometimes suspected of buying shares to ensure market stability around major events like legislative meetings or big anniversaries. “I wouldn't be surprised to see if the government asked banks or funds to not react to the news,” said Justin Tang, head of Asian research at United First Partners, who added that he does not see direct intervention as in the past.
“The government could be a quiet hand of the market in China.” However, one thing Bloomberg does not dare to mention is the US Plunge Protection Team appears to be have been just as active.
Source: Bloomberg Additionally, while Bloomberg notes the relative calm of China's markets, it has relatively exploded relatiove to the collapse in volatility in US markets.
No!” But do not for one second believe this is China only, given the charts above, it's clear that someone or something is desperate to keep US markets aloft.