A recent FT article on Pre-Olympic warnings to China’s fund managers (h/t to The China Vortex) says that the China Securities Regulatory Commission (CSRC) warned fund managers "that companies should be cautious about holding public forums “which may cause market fluctuations”." The article aptly describes this as a "clumsy ... directive to manage the level of the stock market."
I've only got the one course in Corporations, but if China had SEC rules and any of these fund managers have a duty to speak, don't speak, and then make trades, they'd probably be up for 10b-5 liability for insider trading. A BIG criticism of China's markets is that they're opaque. Opacity creates greater uncertainty as investors are unsure about the true health of their investments. With the world in town for a couple of weeks, greater opacity seems a strange solution for stability.
H0pefully, China really is only jumping in bed with Henry Manne for the duration of the Athletic Festival Honoring Zeus.
5 comments:
I was thinking the same thing, what kind of system is it where fund managers have to keep their yaps shut so that no bad news gets out during the Olympics?
An authoritarian system where best intentions are difficult to impossible to implement by government directive. See Friedrich Hayek, Road to Serfdom.
On the other hand, such spending could easily continue under other systems. The NHS here in the UK is one of the world's largest consumers of medecines. Regulatory barriers are much more of a problem for the makers of pharmaceuticals than (non-exclusively) socialised welfare.
The post was mostly intended to be tongue in cheek with regards to the specific system, socialist or capitalist. If the NHS is buying drugs from the pharmaceutical companies at the full price, then the NHS is contributing to the innovation for cutting edge medical technologies by creating a demand for such. I suspect that they're not paying for the cutting edge or they're not paying full price. If so, then they're either not helping to subsidize the development of new drugs, or they are helping by allowing the developers to make as much money as possible through state-enforced price discrimination.
Beijing doesn't appear to be doing either, but I also think that the cost of innovation should fall on the richest societies. One only has to look at the respective casualty rates of construction workers in developing countries and developed countries to get a handle on the relative value of life. Those who value more will pay to develop the cures that will hopefully benefit all.
Ooops - looks like the comment ended up at the wrong place.
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