DJIA: 17,745.98  -5.41 (-0.03%) | NASDAQ: 5,128.785  +17.052 (0.33%) | S&P 500: 2,108.63  +0.06 (0.00%) Markets status unavailable

  • Show Article Details

    "I was just at KFC (YUM) eating chicken and looking at stocks, and a beggar came in with outstretched hands. I gave him a chicken wing to eat. He sat down beside me and spouted off some impressive advice about the long-term moving averages of KFC (YUM) and McDonald's (MCD). 'This stock is going to rise,' he predicted.I was shocked. 'You understand that?' I asked him.The beggar replied, 'If I didn’t know that, how would I have gotten where I am today?' "Many jokes like this one are now circulating on Sina Weibo (WB), China's version of Twitter, about the country's notoriously volatile stock markets. Chinese stock markets surged 200 percent over the last year, lost nearly one-third of their value in the last month, and then rebounded strongly in the last few days — leaving investors with a range of emotions including discouragement, suspicion and cautious optimism.The markets have been giving Chinese investors panic attacks all week, with Shanghai falling 5.9 percent on Wednesday before bouncing back up on Thursday and Friday. More than half of all stocks on the markets have been suspended to dampen investor panic.That sentiment was on display on Chinese social media sites. Users of the most popular services — Weibo (WB) and Tencent's WeChat, which is like a souped-up version of the American mobile chatting app WhatsApp — posted some positive comments after government measures boosted the markets on Thursday. However, many people also posted many wry jokes about the market and veiled criticism of the government.China blocks foreign social media sites like Twitter and Facebook (FB) inside its borders, a policy that has allowed its own domestic versions of the services to grow. The government censors posts on social media, but somewhat selectively. One study by researchers at Harvard University in 2013 found that censors typically allow some criticism of the government, instead focusing their efforts on posts that might incite collective actions, like riots, political organization or demonstrations. Another collection of deleted social media posts by the China Media Project shows that censors have recently focused on deleting posts that criticize government officials by name.Information from Freeweibo.com, a site created by an online activist group called GreatFire, shows that censors have been removing posts about the stock market from social media."Has Chinese-style financial crisis arrived?" asked one deleted post. "The Chinese stock market is too dirty," said another censored poster, who was retweeting an article on the differences between the Chinese and American stock markets. "Chinese IPOs need approval, U.S. IPOs do not ... in the long run, the U.S. market is an accelerator for wealth creation, innovation and entrepreneurship, while the Chinese market is the perfect mechanism for interest groups to repeatedly ransack investors' hard-earned money," the article says.The opinions on Chinese social media sites should be taken with a grain of salt — as on any social media site, posters may alter their identities or have hidden motivations. In addition, the Chinese government is widely known to sway public opinion by employing Internet commentators, a group that is popularly dubbed "the fifty cent party," after the payment they reportedly receive per post. But in general, social media still provides an informative window into public opinion in a country where commentary is highly censored.Many of the most popular posts about the stock market were jokes — though some hit a little too close to home to be that funny. For example, this one, which describes the experience of some people who have found stocks to be a more profitable activity than working in China's slowing economy:“When the economy is doing well, the stock market drops. When the economy is doing poorly, the stock market shoots up. It seems like when the economy is doing well, we all go to work and earn money. When the economy is doing poorly, we all gather in the village entrance to gamble,” the post says.Chinese state media, waving the red flagThe market's bull run seems partly to be a product of government intention — the government changed regulations to allow investors to buy stocks with borrowed money and open multiple accounts in the last year. It's also partly a product of bigger economic trends — the property market, where Chinese traditionally store their wealth, slumped in the last year, leaving people eager for other profitable investments. And it's partially a product of mass psychology, with many new investors piling into the market to avoid being left out.A survey last year showed that that two-thirds of Chinese investors haven’t completed high school, and many people still trade on tips and rumors gathered from friends and neighbors. In Shanghai, for example, thousands of people are gathering at street stock market salons from the early afternoon until late in the evening to exchange tips and information, according to domestic media.Since share values began to fall in mid-June, the Chinese government has jumped in repeatedly to rescue the market, cutting interest rates, pausing initial public offerings, and allowing pension funds to invest more in stocks, among other measures. It also used a state-owned company to lend $42 billion to 21 brokerages so they could purchase blue-chip stocks.And the government sent out many rah-rah messages about the stock market through China's state-owned media. State media also reported that the government had launched an investigation into cases of people "maliciously" shorting blue-chip stocks.Not all media in China are state-owned; some are private. But all media companies occasionally receive directives from China's propaganda ministry on what they should and should not publish. The state-owned media companies, including People's Daily, China Daily and Global Times, are viewed as direct mouthpieces of the government.State media played a prominent role in stoking the stock market bubble in the first place. As David Wertime of Foreign Policy notes, Xinhua (XHFNF) published eight articles on the stock market in a space of three days in early September, and in March, People’s Daily issued a three-article series, “A Share Volatility [Is Part of] a Slow Bull; [Index] Expected to Challenge 4,000.”Directing the stock market may seem like an odd role for official media, but Barry Naughton, a professor of international relations at the University of California at San Diego, explains that it is a product of state media's desire to support the administration of Xi Jinping, the president of China and the secretary of the Communist Party."Chinese official publications definitely applauded the run-up to the stock market, and they were allowed to portray it as one of the channels that was contributing to greater wealth and to Xi Jinping’s China Dream," says Naughton, referring to Xi's plan to restore China to its historical wealth and glory.Naughton says Xi's administration has been marked by a deep bifurcation — pursuing some serious economic reforms, while also, at the same time, giving the propaganda and public security apparatus "full license to recreate some of the worst aspects of the Communist Party system.""That was incredibly irresponsible. It fueled the bubble at the worst time," he says. "And it meant that the regime was on the hook: When things started to correct, there was a sense among the political leaders that this is really bad, not just for the pure economic reasons, but because it presented a challenge to the official narrative of Xi Jinping’s being the face of a new, more successful and more confident China."A few voices at state-run media have been more critical: "Government cannot be market's babysitter," read an opinion piece in the state-run newspaper Global Times on July 4 that concluded "The future of China's stock market lies in further marketization, not a 'policy bull.' "But the majority have cheered the stock market rally on.“The national team is strong and powerful, and the government’s determination to maintain financial stability is firm,” said another commentary piece in Global Times entitled, “The national team will certainly win”:“Pessimism about the future is uncalled for,” cautioned another piece from the state-run Xinhua News Agency. "After rain and storms, rainbows appear," said an editorial by the People's Daily. On Friday, following a recovery in the market, China's Securities Times, the official paper of the securities regulator, carried reports from five major brokers claiming that the big stock market panic is over and that markets are set to rebound.Some Chinese responded on social media by calling on each other to keep buying stocks to save the market and the economy.But others seemed much more concerned about their life savings.The country "robbed 10 yuan from you and then returned 5. In the end you still said, 'I firmly believe in the country.' I can only laugh hollowly," one social media user said. "Investing in this market is like gambling in Macao," said another, referring to the city in China where gambling is legal.Others criticized the market through quips and jokes.“A person walks into a bookstore and says to the seller: “I want to buy a book with no killers, but a lot of bloodshed; with no love, but much regret; with no spies, but constant paranoia,” one joke goes.The bookseller says, “We just have the Chinese stock market.”Gu Jinglu in Beijing contributed to this article.






  • Show Article Details

    "I was just at KFC (YUM) eating chicken and looking at stocks, and a beggar came in with outstretched hands. I gave him a chicken wing to eat. He sat down beside me and spouted off some impressive advice about the long-term moving averages of KFC (YUM) and McDonald's (MCD). 'This stock is going to rise,' he predicted.I was shocked. 'You understand that?' I asked him.The beggar replied, 'If I didn’t know that, how would I have gotten where I am today?' "Many jokes like this one are now circulating on Sina Weibo (WB), China's version of Twitter, about the country's notoriously volatile stock markets. Chinese stock markets surged 200 percent over the last year, lost nearly one-third of their value in the last month, and then rebounded strongly in the last few days — leaving investors with a range of emotions including discouragement, suspicion and cautious optimism.The markets have been giving Chinese investors panic attacks all week, with Shanghai falling 5.9 percent on Wednesday before bouncing back up on Thursday and Friday. More than half of all stocks on the markets have been suspended to dampen investor panic.That sentiment was on display on Chinese social media sites. Users of the most popular services — Weibo (WB) and Tencent's WeChat, which is like a souped-up version of the American mobile chatting app WhatsApp — posted some positive comments after government measures boosted the markets on Thursday. However, many people also posted many wry jokes about the market and veiled criticism of the government.China blocks foreign social media sites like Twitter and Facebook (FB) inside its borders, a policy that has allowed its own domestic versions of the services to grow. The government censors posts on social media, but somewhat selectively. One study by researchers at Harvard University in 2013 found that censors typically allow some criticism of the government, instead focusing their efforts on posts that might incite collective actions, like riots, political organization or demonstrations. Another collection of deleted social media posts by the China Media Project shows that censors have recently focused on deleting posts that criticize government officials by name.Information from Freeweibo.com, a site created by an online activist group called GreatFire, shows that censors have been removing posts about the stock market from social media."Has Chinese-style financial crisis arrived?" asked one deleted post. "The Chinese stock market is too dirty," said another censored poster, who was retweeting an article on the differences between the Chinese and American stock markets. "Chinese IPOs need approval, U.S. IPOs do not ... in the long run, the U.S. market is an accelerator for wealth creation, innovation and entrepreneurship, while the Chinese market is the perfect mechanism for interest groups to repeatedly ransack investors' hard-earned money," the article says.The opinions on Chinese social media sites should be taken with a grain of salt — as on any social media site, posters may alter their identities or have hidden motivations. In addition, the Chinese government is widely known to sway public opinion by employing Internet commentators, a group that is popularly dubbed "the fifty cent party," after the payment they reportedly receive per post. But in general, social media still provides an informative window into public opinion in a country where commentary is highly censored.Many of the most popular posts about the stock market were jokes — though some hit a little too close to home to be that funny. For example, this one, which describes the experience of some people who have found stocks to be a more profitable activity than working in China's slowing economy:“When the economy is doing well, the stock market drops. When the economy is doing poorly, the stock market shoots up. It seems like when the economy is doing well, we all go to work and earn money. When the economy is doing poorly, we all gather in the village entrance to gamble,” the post says.Chinese state media, waving the red flagThe market's bull run seems partly to be a product of government intention — the government changed regulations to allow investors to buy stocks with borrowed money and open multiple accounts in the last year. It's also partly a product of bigger economic trends — the property market, where Chinese traditionally store their wealth, slumped in the last year, leaving people eager for other profitable investments. And it's partially a product of mass psychology, with many new investors piling into the market to avoid being left out.A survey last year showed that that two-thirds of Chinese investors haven’t completed high school, and many people still trade on tips and rumors gathered from friends and neighbors. In Shanghai, for example, thousands of people are gathering at street stock market salons from the early afternoon until late in the evening to exchange tips and information, according to domestic media.Since share values began to fall in mid-June, the Chinese government has jumped in repeatedly to rescue the market, cutting interest rates, pausing initial public offerings, and allowing pension funds to invest more in stocks, among other measures. It also used a state-owned company to lend $42 billion to 21 brokerages so they could purchase blue-chip stocks.And the government sent out many rah-rah messages about the stock market through China's state-owned media. State media also reported that the government had launched an investigation into cases of people "maliciously" shorting blue-chip stocks.Not all media in China are state-owned; some are private. But all media companies occasionally receive directives from China's propaganda ministry on what they should and should not publish. The state-owned media companies, including People's Daily, China Daily and Global Times, are viewed as direct mouthpieces of the government.State media played a prominent role in stoking the stock market bubble in the first place. As David Wertime of Foreign Policy notes, Xinhua (XHFNF) published eight articles on the stock market in a space of three days in early September, and in March, People’s Daily issued a three-article series, “A Share Volatility [Is Part of] a Slow Bull; [Index] Expected to Challenge 4,000.”Directing the stock market may seem like an odd role for official media, but Barry Naughton, a professor of international relations at the University of California at San Diego, explains that it is a product of state media's desire to support the administration of Xi Jinping, the president of China and the secretary of the Communist Party."Chinese official publications definitely applauded the run-up to the stock market, and they were allowed to portray it as one of the channels that was contributing to greater wealth and to Xi Jinping’s China Dream," says Naughton, referring to Xi's plan to restore China to its historical wealth and glory.Naughton says Xi's administration has been marked by a deep bifurcation — pursuing some serious economic reforms, while also, at the same time, giving the propaganda and public security apparatus "full license to recreate some of the worst aspects of the Communist Party system.""That was incredibly irresponsible. It fueled the bubble at the worst time," he says. "And it meant that the regime was on the hook: When things started to correct, there was a sense among the political leaders that this is really bad, not just for the pure economic reasons, but because it presented a challenge to the official narrative of Xi Jinping’s being the face of a new, more successful and more confident China."A few voices at state-run media have been more critical: "Government cannot be market's babysitter," read an opinion piece in the state-run newspaper Global Times on July 4 that concluded "The future of China's stock market lies in further marketization, not a 'policy bull.' "But the majority have cheered the stock market rally on.“The national team is strong and powerful, and the government’s determination to maintain financial stability is firm,” said another commentary piece in Global Times entitled, “The national team will certainly win”:“Pessimism about the future is uncalled for,” cautioned another piece from the state-run Xinhua News Agency. "After rain and storms, rainbows appear," said an editorial by the People's Daily. On Friday, following a recovery in the market, China's Securities Times, the official paper of the securities regulator, carried reports from five major brokers claiming that the big stock market panic is over and that markets are set to rebound.Some Chinese responded on social media by calling on each other to keep buying stocks to save the market and the economy.But others seemed much more concerned about their life savings.The country "robbed 10 yuan from you and then returned 5. In the end you still said, 'I firmly believe in the country.' I can only laugh hollowly," one social media user said. "Investing in this market is like gambling in Macao," said another, referring to the city in China where gambling is legal.Others criticized the market through quips and jokes.“A person walks into a bookstore and says to the seller: “I want to buy a book with no killers, but a lot of bloodshed; with no love, but much regret; with no spies, but constant paranoia,” one joke goes.The bookseller says, “We just have the Chinese stock market.”Gu Jinglu in Beijing contributed to this article.






  • Show Article Details

    NEW YORK — Wondering how to get in on the planned Albertsons IPO before it goes public? The New Hyde Park, N.Y. real estate investment trust is part of a consortium led by private equity shop Cerberus Capital Management LP that has been snapping up Albertsons stores for the past decade.

  • Show Article Details

    NEW YORK — From Facebook  to Fitbit (FIT), many novice investors get excited about the opportunity to invest in companies they know and love. What is an IPO? Private companies looking to expand their business can raise cash quickly by selling stock to the general public. To Invest in an IPO or Not. Before making a trade, find out what you’re buying. Do Your Homework.

  • Show Article Details

    Mexican construction conglomerate Elementia, part owned by billionaire Carlos Slim, soared as much as 10.5 percent on its Friday debut on the Mexican stock exchange after the shares were priced below the preliminary target range. Early on Friday, Elementia priced its initial public offering at 17 pesos per share, below the 20-25 peso range proposed in a preliminary prospectus last month.

  • Show Article Details

    Shares of Mexican construction conglomerate Elementia, part-owned by billionaire Carlos Slim, rose more than 7 percent to 18.3 pesos per share in their debut on Mexico's stock exchange in early trading on Friday. The company announced earlier on Friday it had priced its initial public offering at 17 pesos per share, below the range it had originally proposed.

  • Show Article Details

    Brokerage firm Sidoti Co. tightened the pricing guidance for its initial public offering and now expects to raise up to $33 million, the company said in a regulatory filing Friday. The New York firm, known for its practice of only publishing "buy" and "neutral" research recommendations on the mostly small-capitalization stocks it covers, intends to sell 3 million shares at $9 to $11 a share. Last month, Sidoti said it expected to price the offering at $8.50 to $11.50 a share.

  • Show Article Details

    Spanish-language network carrying debt of more than $10 billion. Spanish-language network Univision Holdings filed for an initial public offering of up to $100 million last week with plans to list under the ticker symbol "UVN" on either the New York Stock Exchange or the Nasdaq Global Market. The deal will mark a partial exit at the least for its owners, private-equity firms Madison Dearborn Partners, Providence Equity Partners, TPG and Thomas H. Lee Partners, as well as media mogul...

  • Show Article Details

    Mexican construction conglomerate Elementia, part-owned by billionaire Carlos Slim, will price its initial public offering at 17 pesos per share, the company said on Friday, below the range it had originally proposed. In a preliminary prospectus last month, Elementia said it planned to offer 201 million shares at a range of between 20 and 25 pesos per share.

  • Show Article Details

    Providence Equity Partners has put SRA on a path back to the public markets four years after taking it private. Fairfax, Va.-based SRA is a provider of IT services to the federal government.The Providence, R.I.-based private equity firm acquired SRA International for approximately $1.9 billion in a transaction that was completed in July 2011.

  • Show Article Details

    Believe it or not, the U.S. stock market had way more companies back when Mark McGwire was chasing homerun records. The number of publicly listed U.S. stocks peaked at a record 7,562 during McGwire's record-setting summer of 1998, according to the Wilshire 5000 Total Market Index. So what gives? This isn't a trivial problem that only matters to bankers on Wall Street.

  • Show Article Details

    BEIJING — For decades, the Chinese Communist Party has been able to keep control of democracy protests, dissidents, the legal system and the military, but it is now facing an even more intractable foe: a plummeting stock market.Invisible and fast-paced, mutinous market forces­ have defied the party-led government’s efforts to arrest the month-long slide in Chinese stock markets. If this continues, the slump in stock prices could slow the economy and undermine faith in the party’s leadership and power, experts on China and economics say.Only three months ago, the state-run People’s Daily opined that rising stock prices were the “carriers of the China Dream” and affirmation of President Xi Jinping’s signature vision for what he calls the great rejuvenation of the Chinese nation. But what had been hailed as a bull market has turned into a burst bubble.Shanghai’s main share index is down a third since its June peak. Trading in nearly three-quarters of listed shares was either frozen because of limit declines or completely suspended, and even the securities regulator was talking about a mood of “panic.”As the stock market collapsed, Chinese authorities have ordered brokerages and insurers to buy, barred insiders from selling, and tapped the nation’s sovereign wealth to prop up shares. The government also invoked patriotism, blamed foreigners and arrested what it called rumormongers.The Chinese stock swoon has been “a complete revelation of how unprepared the policymakers are for managing the transition to market-driven capital markets. That’s the question of the moment,” said Daniel Rosen, a partner at the Rhodium Group, a New York-based economic advisory firm. “The question for tomorrow is whether that immaturity applies to their ability to regulate other aspects of the economic transition as well.”[The politics of China’s stock market collapse]Xi’s aura of invincibility has taken perhaps its biggest hit since he came to power, experts say. While China’s economy can probably withstand the stock market crash, growth was already slowing and challenges continue to mount. The authorities’ clumsy response raises questions about their willingness to embrace tough economic reforms.“The intervention comes with some real costs that will not be easy to overcome,” said Scott Kennedy at the Center for Strategic and International Studies in Washington. “The scale and aggressiveness of these measures make a mockery of the leadership’s claim to allow the market to play a ‘decisive role’ in determining the allocation of resources and the direction of the economy.”Rosen added that the government “should not have maintained the support for markets once the inevitable correction began. They were spending their hard-won credibility in an effort doomed to fail.”How the stock market collapse has been handled so far and how it is handled in the coming days goes to the heart of reform in an economy that is a strange mixture of robust private enterprise and a legacy of central planning.For decades, some enthusiasts have argued that China was the exception to the rule: that its far­sighted leaders could make the transition to a more open economy while avoiding the debt trap that every other so-called miracle economy had fallen into since World War II. That idea could be the biggest casualty of the crash, both at home and abroad.“It is remarkable to us how analysts and investors around the world who deeply believe in the laws of economics and free markets have tacitly bought into the idea of Chinese exceptionalism,” wrote Anne Stevenson-Yang, director of J Capital Research.Like many skeptics, Stevenson-Yang argues that China’s engineered “economy-by-fiat” is becoming ever more wasteful in its allocation of resources and that Xi’s grand vision of regional economic dominance through a New Silk Road economic area was an example of overreach.[Putin: Russia and China can overcome any difficulty together]Before peaking on June 12, China’s stock market had risen by about 150 percent in a year, completely divorcing itself from increasingly worrying economic and corporate fundamentals.Frenzy gripped the nation; from high school students to farmers, ordinary Chinese citizens pooled ideas to take advantage of what looked like easy money. Thousands of people gathered in “street stock market saloons” in Shanghai from early afternoon until late in the evening to swap tips.According to the state-run Xinhua News Agency, 90 million people, more than the membership of the Communist Party, had trading accounts.Many people borrowed money to bet on an ever-rising market. By some accounts, the Chinese market became the most leveraged in history. But as the market has fallen, traders have been forced to unwind those leveraged positions and join the line of sellers.The authorities responded first by easing monetary policy, suggesting pension funds would invest more, cutting trading fees and even relaxing rules of using borrowed money to speculate in the markets. Opinion leaders took to social media to demand that investors buy shares “for the nation.” Elderly women burst into trading halls to sing patriotic songs.Then, with nothing working, they brought out the big guns. Last weekend, banks announced that the issuance of new shares through initial public offerings would be suspended, while 21 brokerages said they would contribute $19 billion to stabilize the market. The Shanghai composite index opened 7 percent higher Monday but immediately started to slide again.The market’s decline has now wiped out more than $3.5 trillion in market value in a month. By comparison, the bursting of the dot-com bubble in the United States in 2000 caused a loss of $5 trillion.[Hostile foreign forces blamed for bursting stock market bubble]When regulators posted comments on social media in an attempt to calm the market, they were greeted with thousands of abusive replies.“I am not a 3-year-old. How many more times are you going to lie to me?” said one social media user. “This is how you treat your own people,” said another. “Give me my money back,” a third simply wrote.Andrew Batson, the China research director at Gavekal Dragonomics in Beijing, said the scale of the government’s response was disproportionate to the scale of the problem. But having sold people on the idea that the market’s rise was an endorsement of its economic reforms and Xi’s vision of a “China Dream,” the government felt trapped, he said.“It has made an implicit promise to a lot of people that the stock market will keep going up, so they feel the need to show the government can deliver on its promise,” he said.Mufson reported from Washington. Gu Jinglu in Beijing contributed to this report.






  • Show Article Details

    BEIJING — For decades, the Chinese Communist Party has been able to keep control of democracy protests, dissidents, the legal system and the military, but it is now facing an even more intractable foe: a plummeting stock market.Invisible and fast-paced, mutinous market forces­ have defied the party-led government’s efforts to arrest the month-long slide in Chinese stock markets. If this continues, the slump in stock prices could slow the economy and undermine faith in the party’s leadership and power, experts on China and economics say.Only three months ago, the state-run People’s Daily opined that rising stock prices were the “carriers of the China Dream” and affirmation of President Xi Jinping’s signature vision for what he calls the great rejuvenation of the Chinese nation. But what had been hailed as a bull market has turned into a burst bubble.Shanghai’s main share index is down a third since its June peak. Trading in nearly three-quarters of listed shares was either frozen because of limit declines or completely suspended, and even the securities regulator was talking about a mood of “panic.”As the stock market collapsed, Chinese authorities have ordered brokerages and insurers to buy, barred insiders from selling, and tapped the nation’s sovereign wealth to prop up shares. The government also invoked patriotism, blamed foreigners and arrested what it called rumormongers.The Chinese stock swoon has been “a complete revelation of how unprepared the policymakers are for managing the transition to market-driven capital markets. That’s the question of the moment,” said Daniel Rosen, a partner at the Rhodium Group, a New York-based economic advisory firm. “The question for tomorrow is whether that immaturity applies to their ability to regulate other aspects of the economic transition as well.”[The politics of China’s stock market collapse]Xi’s aura of invincibility has taken perhaps its biggest hit since he came to power, experts say. While China’s economy can probably withstand the stock market crash, growth was already slowing and challenges continue to mount. The authorities’ clumsy response raises questions about their willingness to embrace tough economic reforms.“The intervention comes with some real costs that will not be easy to overcome,” said Scott Kennedy at the Center for Strategic and International Studies in Washington. “The scale and aggressiveness of these measures make a mockery of the leadership’s claim to allow the market to play a ‘decisive role’ in determining the allocation of resources and the direction of the economy.”Rosen added that the government “should not have maintained the support for markets once the inevitable correction began. They were spending their hard-won credibility in an effort doomed to fail.”How the stock market collapse has been handled so far and how it is handled in the coming days goes to the heart of reform in an economy that is a strange mixture of robust private enterprise and a legacy of central planning.For decades, some enthusiasts have argued that China was the exception to the rule: that its far­sighted leaders could make the transition to a more open economy while avoiding the debt trap that every other so-called miracle economy had fallen into since World War II. That idea could be the biggest casualty of the crash, both at home and abroad.“It is remarkable to us how analysts and investors around the world who deeply believe in the laws of economics and free markets have tacitly bought into the idea of Chinese exceptionalism,” wrote Anne Stevenson-Yang, director of J Capital Research.Like many skeptics, Stevenson-Yang argues that China’s engineered “economy-by-fiat” is becoming ever more wasteful in its allocation of resources and that Xi’s grand vision of regional economic dominance through a New Silk Road economic area was an example of overreach.[Putin: Russia and China can overcome any difficulty together]Before peaking on June 12, China’s stock market had risen by about 150 percent in a year, completely divorcing itself from increasingly worrying economic and corporate fundamentals.Frenzy gripped the nation; from high school students to farmers, ordinary Chinese citizens pooled ideas to take advantage of what looked like easy money. Thousands of people gathered in “street stock market saloons” in Shanghai from early afternoon until late in the evening to swap tips.According to the state-run Xinhua News Agency, 90 million people, more than the membership of the Communist Party, had trading accounts.Many people borrowed money to bet on an ever-rising market. By some accounts, the Chinese market became the most leveraged in history. But as the market has fallen, traders have been forced to unwind those leveraged positions and join the line of sellers.The authorities responded first by easing monetary policy, suggesting pension funds would invest more, cutting trading fees and even relaxing rules of using borrowed money to speculate in the markets. Opinion leaders took to social media to demand that investors buy shares “for the nation.” Elderly women burst into trading halls to sing patriotic songs.Then, with nothing working, they brought out the big guns. Last weekend, banks announced that the issuance of new shares through initial public offerings would be suspended, while 21 brokerages said they would contribute $19 billion to stabilize the market. The Shanghai composite index opened 7 percent higher Monday but immediately started to slide again.The market’s decline has now wiped out more than $3.5 trillion in market value in a month. By comparison, the bursting of the dot-com bubble in the United States in 2000 caused a loss of $5 trillion.[Hostile foreign forces blamed for bursting stock market bubble]When regulators posted comments on social media in an attempt to calm the market, they were greeted with thousands of abusive replies.“I am not a 3-year-old. How many more times are you going to lie to me?” said one social media user. “This is how you treat your own people,” said another. “Give me my money back,” a third simply wrote.Andrew Batson, the China research director at Gavekal Dragonomics in Beijing, said the scale of the government’s response was disproportionate to the scale of the problem. But having sold people on the idea that the market’s rise was an endorsement of its economic reforms and Xi’s vision of a “China Dream,” the government felt trapped, he said.“It has made an implicit promise to a lot of people that the stock market will keep going up, so they feel the need to show the government can deliver on its promise,” he said.Mufson reported from Washington. Gu Jinglu in Beijing contributed to this report.






  • Show Article Details

    BEIJING — For decades, the Chinese Communist Party has been able to keep control of democracy protests, dissidents, the legal system and the military, but it is now facing an even more intractable foe: a plummeting stock market.Invisible and fast-paced, mutinous market forces­ have defied the party-led government’s efforts to arrest the month-long slide in Chinese stock markets. If this continues, the slump in stock prices could slow the economy and undermine faith in the party’s leadership and power, experts on China and economics say.Only three months ago, the state-run People’s Daily opined that rising stock prices were the “carriers of the China Dream” and affirmation of President Xi Jinping’s signature vision for what he calls the great rejuvenation of the Chinese nation. But what had been hailed as a bull market has turned into a burst bubble.Shanghai’s main share index is down a third since its June peak. Trading in nearly three-quarters of listed shares was either frozen because of limit declines or completely suspended, and even the securities regulator was talking about a mood of “panic.”As the stock market collapsed, Chinese authorities have ordered brokerages and insurers to buy, barred insiders from selling, and tapped the nation’s sovereign wealth to prop up shares. The government also invoked patriotism, blamed foreigners and arrested what it called rumormongers.The Chinese stock swoon has been “a complete revelation of how unprepared the policymakers are for managing the transition to market-driven capital markets. That’s the question of the moment,” said Daniel Rosen, a partner at the Rhodium Group, a New York-based economic advisory firm. “The question for tomorrow is whether that immaturity applies to their ability to regulate other aspects of the economic transition as well.”[The politics of China’s stock market collapse]Xi’s aura of invincibility has taken perhaps its biggest hit since he came to power, experts say. While China’s economy can probably withstand the stock market crash, growth was already slowing and challenges continue to mount. The authorities’ clumsy response raises questions about their willingness to embrace tough economic reforms.“The intervention comes with some real costs that will not be easy to overcome,” said Scott Kennedy at the Center for Strategic and International Studies in Washington. “The scale and aggressiveness of these measures make a mockery of the leadership’s claim to allow the market to play a ‘decisive role’ in determining the allocation of resources and the direction of the economy.”Rosen added that the government “should not have maintained the support for markets once the inevitable correction began. They were spending their hard-won credibility in an effort doomed to fail.”How the stock market collapse has been handled so far and how it is handled in the coming days goes to the heart of reform in an economy that is a strange mixture of robust private enterprise and a legacy of central planning.For decades, some enthusiasts have argued that China was the exception to the rule: that its far­sighted leaders could make the transition to a more open economy while avoiding the debt trap that every other so-called miracle economy had fallen into since World War II. That idea could be the biggest casualty of the crash, both at home and abroad.“It is remarkable to us how analysts and investors around the world who deeply believe in the laws of economics and free markets have tacitly bought into the idea of Chinese exceptionalism,” wrote Anne Stevenson-Yang, director of J Capital Research.Like many skeptics, Stevenson-Yang argues that China’s engineered “economy-by-fiat” is becoming ever more wasteful in its allocation of resources and that Xi’s grand vision of regional economic dominance through a New Silk Road economic area was an example of overreach.[Putin: Russia and China can overcome any difficulty together]Before peaking on June 12, China’s stock market had risen by about 150 percent in a year, completely divorcing itself from increasingly worrying economic and corporate fundamentals.Frenzy gripped the nation; from high school students to farmers, ordinary Chinese citizens pooled ideas to take advantage of what looked like easy money. Thousands of people gathered in “street stock market saloons” in Shanghai from early afternoon until late in the evening to swap tips.According to the state-run Xinhua News Agency, 90 million people, more than the membership of the Communist Party, had trading accounts.Many people borrowed money to bet on an ever-rising market. By some accounts, the Chinese market became the most leveraged in history. But as the market has fallen, traders have been forced to unwind those leveraged positions and join the line of sellers.The authorities responded first by easing monetary policy, suggesting pension funds would invest more, cutting trading fees and even relaxing rules of using borrowed money to speculate in the markets. Opinion leaders took to social media to demand that investors buy shares “for the nation.” Elderly women burst into trading halls to sing patriotic songs.Then, with nothing working, they brought out the big guns. Last weekend, banks announced that the issuance of new shares through initial public offerings would be suspended, while 21 brokerages said they would contribute $19 billion to stabilize the market. The Shanghai composite index opened 7 percent higher Monday but immediately started to slide again.The market’s decline has now wiped out more than $3.5 trillion in market value in a month. By comparison, the bursting of the dot-com bubble in the United States in 2000 caused a loss of $5 trillion.[Hostile foreign forces blamed for bursting stock market bubble]When regulators posted comments on social media in an attempt to calm the market, they were greeted with thousands of abusive replies.“I am not a 3-year-old. How many more times are you going to lie to me?” said one social media user. “This is how you treat your own people,” said another. “Give me my money back,” a third simply wrote.Andrew Batson, the China research director at Gavekal Dragonomics in Beijing, said the scale of the government’s response was disproportionate to the scale of the problem. But having sold people on the idea that the market’s rise was an endorsement of its economic reforms and Xi’s vision of a “China Dream,” the government felt trapped, he said.“It has made an implicit promise to a lot of people that the stock market will keep going up, so they feel the need to show the government can deliver on its promise,” he said.Mufson reported from Washington. Gu Jinglu in Beijing contributed to this report.






  • Show Article Details

    BEIJING — For decades, the Chinese Communist Party has been able to keep control of democracy protests, dissidents, the legal system and the military, but it is now facing an even more intractable foe: a plummeting stock market.Invisible and fast-paced, mutinous market forces­ have defied the party-led government’s efforts to arrest the month-long slide in Chinese stock markets. If this continues, the slump in stock prices could slow the economy and undermine faith in the party’s leadership and power, experts on China and economics say.Only three months ago, the state-run People’s Daily opined that rising stock prices were the “carriers of the China Dream” and affirmation of President Xi Jinping’s signature vision for what he calls the great rejuvenation of the Chinese nation. But what had been hailed as a bull market has turned into a burst bubble.Shanghai’s main share index is down a third since its June peak. Trading in nearly three-quarters of listed shares was either frozen because of limit declines or completely suspended, and even the securities regulator was talking about a mood of “panic.”As the stock market collapsed, Chinese authorities have ordered brokerages and insurers to buy, barred insiders from selling, and tapped the nation’s sovereign wealth to prop up shares. The government also invoked patriotism, blamed foreigners and arrested what it called rumormongers.The Chinese stock swoon has been “a complete revelation of how unprepared the policymakers are for managing the transition to market-driven capital markets. That’s the question of the moment,” said Daniel Rosen, a partner at the Rhodium Group, a New York-based economic advisory firm. “The question for tomorrow is whether that immaturity applies to their ability to regulate other aspects of the economic transition as well.”[The politics of China’s stock market collapse]Xi’s aura of invincibility has taken perhaps its biggest hit since he came to power, experts say. While China’s economy can probably withstand the stock market crash, growth was already slowing and challenges continue to mount. The authorities’ clumsy response raises questions about their willingness to embrace tough economic reforms.“The intervention comes with some real costs that will not be easy to overcome,” said Scott Kennedy at the Center for Strategic and International Studies in Washington. “The scale and aggressiveness of these measures make a mockery of the leadership’s claim to allow the market to play a ‘decisive role’ in determining the allocation of resources and the direction of the economy.”Rosen added that the government “should not have maintained the support for markets once the inevitable correction began. They were spending their hard-won credibility in an effort doomed to fail.”How the stock market collapse has been handled so far and how it is handled in the coming days goes to the heart of reform in an economy that is a strange mixture of robust private enterprise and a legacy of central planning.For decades, some enthusiasts have argued that China was the exception to the rule: that its far­sighted leaders could make the transition to a more open economy while avoiding the debt trap that every other so-called miracle economy had fallen into since World War II. That idea could be the biggest casualty of the crash, both at home and abroad.“It is remarkable to us how analysts and investors around the world who deeply believe in the laws of economics and free markets have tacitly bought into the idea of Chinese exceptionalism,” wrote Anne Stevenson-Yang, director of J Capital Research.Like many skeptics, Stevenson-Yang argues that China’s engineered “economy-by-fiat” is becoming ever more wasteful in its allocation of resources and that Xi’s grand vision of regional economic dominance through a New Silk Road economic area was an example of overreach.[Putin: Russia and China can overcome any difficulty together]Before peaking on June 12, China’s stock market had risen by about 150 percent in a year, completely divorcing itself from increasingly worrying economic and corporate fundamentals.Frenzy gripped the nation; from high school students to farmers, ordinary Chinese citizens pooled ideas to take advantage of what looked like easy money. Thousands of people gathered in “street stock market saloons” in Shanghai from early afternoon until late in the evening to swap tips.According to the state-run Xinhua News Agency, 90 million people, more than the membership of the Communist Party, had trading accounts.Many people borrowed money to bet on an ever-rising market. By some accounts, the Chinese market became the most leveraged in history. But as the market has fallen, traders have been forced to unwind those leveraged positions and join the line of sellers.The authorities responded first by easing monetary policy, suggesting pension funds would invest more, cutting trading fees and even relaxing rules of using borrowed money to speculate in the markets. Opinion leaders took to social media to demand that investors buy shares “for the nation.” Elderly women burst into trading halls to sing patriotic songs.Then, with nothing working, they brought out the big guns. Last weekend, banks announced that the issuance of new shares through initial public offerings would be suspended, while 21 brokerages said they would contribute $19 billion to stabilize the market. The Shanghai composite index opened 7 percent higher Monday but immediately started to slide again.The market’s decline has now wiped out more than $3.5 trillion in market value in a month. By comparison, the bursting of the dot-com bubble in the United States in 2000 caused a loss of $5 trillion.[Hostile foreign forces blamed for bursting stock market bubble]When regulators posted comments on social media in an attempt to calm the market, they were greeted with thousands of abusive replies.“I am not a 3-year-old. How many more times are you going to lie to me?” said one social media user. “This is how you treat your own people,” said another. “Give me my money back,” a third simply wrote.Andrew Batson, the China research director at Gavekal Dragonomics in Beijing, said the scale of the government’s response was disproportionate to the scale of the problem. But having sold people on the idea that the market’s rise was an endorsement of its economic reforms and Xi’s vision of a “China Dream,” the government felt trapped, he said.“It has made an implicit promise to a lot of people that the stock market will keep going up, so they feel the need to show the government can deliver on its promise,” he said.Mufson reported from Washington. Gu Jinglu in Beijing contributed to this report.






  • Show Article Details

    There's a huge drama unfolding in China. Local stock markets, which rose to dizzying heights over the past year, are rapidly falling back to Earth. And the Chinese government is trying to restore investors' faith in the markets with a truly mind-boggling package of counter-measures.It has been called the biggest stock market bubble since the dot-com boom, and some say its effects could be bigger than the crisis in Greece. China represents more than 16 percent of the global economy, after all, while Greece is merely 0.38 percent. Here are the seven biggest questions and answers about what's happening right now, and what could come if the boom goes bust.(1) What's happening now? China’s stock markets took another dive on Wednesday, with the Shanghai market falling 5.9 percent. [On Thursday, the Shanghai rebounded 5.8 percent.]China has two main stock exchanges that have been around since the 1990s: One in Shanghai, and the other in the southern city of Shenzhen, on the mainland across from Hong Kong. Both have both fallen sharply since hitting a peak on June 12. The Shanghai Composite Index has lost 32 percent of its value in less than a month, while the Shenzhen Composite Index has dropped 40 percent.Here's a look at the two exchanges as of Wednesday.Altogether, more than $3 trillion in share value has evaporated since mid-June — more than the value of France’s entire stock market.The drop hasn't erased all of the gains markets have made in the last year. Both markets are still up more than 70 percent from mid-2014. But it was enough to spook investors, companies and the government alike.The drop spurred 500 listed companies to halt trading on Wednesday to stem further losses. In total, at least 1,300 companies have suspended trading — over half the listed companies in China. The suspensions caused the stock sell-off to spill over to blue chips -- investors couldn’t sell off small cap stocks, so they had to sell blue chips to meet margin calls and limit their exposure.All of these suspensions are slowing the market crash, at least for now. But once these stocks resume trading, the market could drop further.(3) How has the government responded?The Chinese government denounced the market movement as panic selling, and responded to the drop in a way that many analysts saw as a huge overreaction.Working through various agencies, the government cut interest rates for the fourth time this year, paused new initial public offerings, capped short selling, changed the rules to allow pension funds and the social security fund to invest more in stocks, and ordered state-owned companies and controlling shareholders not to sell their shares. It changed the rules so that investors can, for the first time, use their houses as collateral to borrow money to buy stocks.Most significantly, it used a state-owned securities financing company to lend $42 billion to 21 brokerages so they could purchase blue-chip stocks — on top of $20 billion that brokerages said they would buy over the weekend. As Gwynn Guilford of Quartz notes, taken together China’s response was bigger than TARP, one of the U.S. government’s prime responses to the financial crisis.And of course, it sent out many cheerful messages about the stock market through the state-owned media.China "capable, confident" of stabilizing capital market: People's Daily http://t.co/SkEsP3qZwi pic.twitter.com/M0CXnNuLnf(4) How did we get here? China’s stock markets have had an incredible run. In just 12 months, they rose enough to create $6.5 trillion in value — enough to pay off Greece’s debt 20 times over. No other stock market has ever grown that much in dollar terms.The boom has been fueled by novice investors rushing into the market. The number of newly opened trading accounts surged to a new record earlier this year. Many of these new investors are uneducated and inexperienced. A survey last year showed that that two-thirds of Chinese investors haven’t completed high school. Even Chinese farmers are giving up tending their fields in order to tend their stocks.The real mystery of the Chinese stock market boom is its disconnect with the real economy. While the stock market has surged, the Chinese economy has finally begun to slump after decades of strong growth. The Chinese economy grew 7 percent year-over-year in the first quarter, its slowest pace since 2009. Imports plummeted 18.1 percent in May, and analysts expected them to contact further in June. In recent years the government has boosted growth by encouraging heavy investment in infrastructure and property. But as those projects are completed, the same investments are doing less to drive economic growth.The Chinese stock market bubble has been driven by a few factors -- including an expansion in lending and poor prospects in alternative investments, like the property market.(4) What role does lending play?One way money has flowed into the stock market is through margin lending, or allowing brokers to lend their clients money to buy stocks. China has relaxed its regulations on margin financing over the last five years, and it now plays a bigger role in the Chinese market than it has in perhaps in any other market in history.The rise in margin lending has deeper roots: the huge expansion in money in China after years of interest rate cuts and easy monetary policy. Even after the U.S. government has been printing money for years, China's money supply is still significantly larger than America's -- even though the U.S. has a larger economy. All that money has to go somewhere, and much has poured into the stock markets.As Scott Kennedy of the Center for Strategic and International Studies wrote in a recent note, “Over a quarter of China's stock market capitalization is now supported through margin financing, turning an equity market into a de facto debt market.”(5) What about the property market? There’s another clear reason that the stock market began rising in late 2014. The price of property, the traditional way for many Chinese households to invest, started to slump, due to a slowing economy and excess inventory.China's property market slump may seem far away now, but not so long ago it was a huge deal. Property has long been a primary store and generator of wealth for the Chinese middle and upper classes, since the country’s underdeveloped financial sector offers few other investment opportunities. Selling land to property developers has also been a primary source of funding for most city and village governments, which mostly don't have the authority to levy their own taxes or issue bonds. McKinsey has estimated that, excluding the financial sector, almost half of China’s debt is directly or indirectly related to real estate, about $9 trillion.When the property market started to slump, it put much of the country's wealth at risk. In 2014, Morgan Stanley Economist Andy Xie compared the Chinese stock and property markets to a horror movie. “People like to watch, but don’t want to be in it,” he said.The Chinese housing market has been undergoing its sharpest correction in a decade, as Kent Troutman of the Peterson Institute of International Economics shows in the chart below.The property market has actually showed signed of reviving in recent months (which may be pulling some money out of stock markets) but investors still don’t see property as a good financial investment. When people don't want to invest in housing, some naturally turn to equities. “You squeeze one side of the balloon and the air goes to the other side of the balloon,” Chovanec says.(6) How do Chinese stock markets differ from the U.S.? China's recent history as a capitalist economy is pretty short -- it really only started opening up to trade and investment in the 1980s, and its stock markets started in the 1990s.Its financial markets are much less developed than those in the U.S., and involve fewer people and a smaller percentage of total assets (that's one reason why the property market has historically been so important). China’s free-float, the amount of value available for trading on stock markets, is about one-third of its gross domestic product, compared to more than 100 percent of GDP in most developed economies. More than half of Americans have some investment in stocks, whereas the figure in China is only about 6 percent.China's financial markets are also mostly closed off to those outside the country: Foreigners own only about 1.5 percent of all Chinese shares, according to Capital Economics.Finally, professional money managers play a more prominent role in the U.S. than they do in China. Unlike developed stock markets, where institutional investors account for the bulk of trades, retail investors (a.k.a. average people) account for about 85 percent of stock trades in China. Since retail investors typically have shallower pockets than professional money managers, China's stock market ends up being a lot more volatile.(7) What are the risks? It's not clear what will happen next. The Chinese government has put a huge amount of money and energy into turning the market around. The drop in the market so far this week shows that investors don't believe the government yet, but perhaps they can be convinced in the future.There are a few other interesting, potential casualties of the latest market drop. Some analysts say that the Chinese government's repeated pledges to boost the market and subsequent failures to do so could damage its credibility and lead to a crisis of confidence. Even if that doesn't happen, the government's latest measures are definitely calling into question its 2013 pledge to let the market play a "decisive" role in governance -- the central promise of its economic reform agenda.A dip in the market could slow specific reforms. Joyce Poon of GaveKal Dragonomics said in an interview that one of the Chinese government's goals in stoking the stock market boom is to create an environment where certain companies — specifically, big state-owned companies in non-essential sectors like health care, retail, hotels and low-end technology -- can restructure, carry out mergers and acquisitions, and sell stakes to private shareholders. In order to privatize state assets, people must want to buy them, says Poon. If the market continues to decline, some individual investors will lose their savings. But since average Chinese people aren't that exposed to stocks, the wealth effect from a stock market crash would be somewhat limited.Since foreigners own such a small percentage of stocks, the possibility of contagion outside the market is low. But a stock market bubble could threaten the Chinese economy in other ways.The bigger risk lies in the debt that investors and companies have borrowed. Margin debt, which has more than tripled in the past year, in particular greatly increases the pressure to sell in a slump. If the value of a share falls below a certain level, investors will get a margin call, meaning they need to either deposit more money in their account, or sell shares to make up the difference.This dynamic means that a dip in prices in China could quickly spark an even bigger sell-off, as investors sell stock to pay their brokers. Some Chinese companies have even pledged their own shares as collateral for bank loans -- meaning that, if their share price falls enough, they may default on their loans. This leverage could threaten the stability of banks and brokerage firms.You might also like:-Meet the world’s biggest stock market bubble since the dot-com boom-How China used more cement in 3 years than the U.S. did in the entire 20th Century-China’s increase in debt is massive and unsustainable






  • Show Article Details

    Fairfax-based IT contractor SRA International has filed for an initial public offering worth up to $100 million, the company said Wednesday.This is the second public offering for SRA, which went private in 2011 after it was bought by Providence Equity Partners, a private equity firm, for nearly $2 billion. Despite the move, the company’s fortunes suffered. It racked up debt worth $1.3 billion from the deal and lost a lucrative contract after years of legal battles. Intense competition in the government contracting world also hit the company’s IT business. SRA has since reduced its net debt and implemented strategies for a turnaround under chief executive William Ballhaus. The company recorded sales worth $1.03 billion as of the first quarter, down from $1.04 billion a year ago, while it posted losses of $80 million, up from $78 million a year ago.






  • Show Article Details

    The New York Stock Exchange reopened Wednesday after an unprecedented, nearly four-hour halt in trading that authorities said was caused by a major technical glitch. The freeze in trading at one of the world’s largest exchanges was highly unusual. A U.S. official told The Washington Post that there was “no indication” that the problems were the result of a cyberattack. The person, speaking on condition of anonymity, added that the incident “seems like a technical issue.” Stocks stopped trading just around 11:32 a.m. Eastern time and resumed trading three hours and 38 minutes later at 3:10 p.m. The NYSE said that all orders made during the freeze would be canceled. But trading continued on other exchanges, and Nasdaq officials said at noon that the index’s trading systems were operating normally.[What average investors should know about the New York Stock Exchange closure]In a statement during the halt, the NYSE said: “We’re experiencing a technical issue that we’re working to resolve as quickly as possible. We’re doing our utmost to produce a swift resolution & will be providing further updates as soon as we can.”U.S. markets had dipped slightly before the outage amid worries that falling Chinese stocks would ripple throughout the global economy.They ended the trading day in negative territory. The Standard & Poor’s 500-stock index fell about 1.7 percent, and the Dow Jones industrial average closed down about 1.5 percent.Wednesday was a day for technical problems. The outage at the NYSE came just hours after United Airlines temporarily grounded its flights due to what the company said was a “network connectivity issue.” NBC News quoted two unnamed U.S. officials as saying that there was no indication that the market shutdown was related to the grounded airplanes.And at about the same time as the NYSE freeze, the Web site of the Wall Street Journal went down. The site was back up by 1:30 p.m. “Well, I’d like to know some more information,” Sen. Charles E. Schumer (D-N.Y.) told reporters at the Capitol. “To have three outages in three important places in the same day raises a lot of questions. I haven’t gotten answers yet.” Asked about the “coincidence” of three major technical failures in a single day, FBI Director James Comey told the Senate Judiciary Committee that the incidents had “obviously that caught my attention.”“We’re not big believers in coincidence either. We’ve been in contact with all three companies to see what’s going on,” Comey said. “We do not see any connection to a cyber breach or a cbyer attack…It does appear that it’s not a cyber intrusion.”The NYSE problems came at a time when regulators have struggled to cope with the technological revolution that has transformed trading from a human-centric endeavor to one driven by computers.One of the most high-profile events came in May 2010 “flash crash,” when the stock market plunged nearly 1,000 points in minutes, then jumped back up. Other glitches followed, including the runaway trades linked to faulty computers at Knight Capital in 2012. Technical problems halted trading in Nasdaq-listed stocks for more than three hours in 2013. Facebook’s debut on the Nasdaq exchange was delayed considerably in May 2012 when technical issues marred the company’s initial public offering. [A very brief history of stock markets being shut down]This appeared to be the first time the NYSE had come to a standstill since June 1, 2005, when trading was stopped four minutes before closing “due to a systems communications problem,” according to the NYSE.Ted Weisberg, who has traded on the exchange floor for nearly five decades, said his brokerage firm, New York-based Seaport Securities, was able to keep trading on other exchanges, which were not affected by the glitch.“It’s not the first time, and it won’t be the last time,” Weisberg said. “You rely on computers, and computers break.”At the White House daily briefing, press secretary Josh Earnest said homeland security adviser Lisa Monaco and White House Chief of Staff Denis McDonough briefed President Obama on the technical problems at the stock exchange. He said Monaco told Obama during the stoppage that “at this point there is no indication that malicious actors are involved in these technical issues.” Earnest said NYSE officials have been in close touch with the Department of Homeland Security, the Securities and Exchange Commission and the Treasury Department and that the NYSE was “working feverishly to resolve the situation.” Obama asked his aides to keep him updated through the day.More broadly, Earnest said: “The administration is keenly aware of the risk that exists in cyberspace right now. There are a number of steps this administration has taken to improve communication between the private sector and the federal government in terms of safeguarding cyberspace.”“At this point it’s unclear what kind of impact this glitch will have” on investors, Earnest said. After the problem is resolved, the administration will “take a closer look” at the impact. “At this point, it’s too early to offer an assessment about that.”Earnest said Obama was also briefed on United Airlines’ technical problems, but he said he did not know whether Obama was told of the Wall Street Journal’s Web site crash.The SEC, whose job it is to police the markets, issued a brief statement from its chairwoman, Mary Jo White. She stressed that while the NYSE was in limbo, stocks continued to “trade normally through other trading venues.”David Nakamura and Ellen Nakashima contributed to this report.