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Macro matters: The post-2008 crash?
HOME > PAST ISSUE > COVER STORY [Premium content]August 2007
It’s August 25, 2008, a day after the Beijing Olympics have ended. The Shanghai Composite Index has closed at 2,657, the same level as it was at the beginning of 2007. Olympics-mania is dissipating, investors are pulling out as quickly as they piled in, and the markets are collapsing.
This apocalyptic scenario has been painted by China Cassandras predicting a long-anticipated meltdown. But a post-Olympics crash is highly unlikely, according to economists.
“Retail investors at the moment are very much in euphoria and the Olympics story will sell,” said Tai Hui, an economist at Standard Chartered in Hong Kong. “But I don’t think you will suddenly wake up one morning [after the games] and [find that] everything [is] lost.”
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