The Hang Seng Index is plunging downwards at a fast rate these days.
Today it dropped over 770 points to close at 16,822.15.
The fall of 4.4 percent, the lowest in 2.5 years was due to mainland financials and property companies. There are also fears the Chinese economy is going to hit a hard landing with no sign of the Chinese government injecting a stimulus package like it did in late 2008.
Even casino stocks fell, with Galaxy Entertainment losing 19 percent on fears of a credit squeeze on private firms on the mainland would affect gambling revenues. This is an interesting development as most believed up until now that gambling was recession proof.
While some investors are scared and are trying to cut losses, others are waiting for stock prices to fall even further.
It will be a good time to look for good deals, but my question is, as the economies in Europe and the United States need to become more fiscally responsible, from the countries right down to individuals themselves, doesn't this mean overall that GDP numbers will be falling as well? In that case would that mean we're not going to see stocks make people as wealthy as they did before?
In other words are we ever going to see the Hang Seng climb over 30,000 points like it did in October 2007?
Perhaps this explains why people are moving into property instead -- perhaps more of a sure bet.