The Unbearable Exuberance of China's Markets

Out-of-control margin lending is driving China toward a crash.

The good times can't last.

Source: ChinaFotoPress/ChinaFotoPress via Getty Images

Chinese investors are acting as giddy as Americans were on Dec. 5, 1996, the day Alan Greenspan made his infamous "irrational exuberance" dig at markets. Don't take my word for it. Here's what the country's securities regulator said Friday, the day the Shanghai Composite Index rallied to its highest close since May 2008: “Investors should be cautious about market risks,” the China Securities Regulatory Commission said on its microblog. “We shouldn’t be thinking if we don’t buy now, we will miss it.”

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