This will be the third (and last?) comment on not only the recent volatility in the stock market over here, but the insipid press coverage.

To start off, let’s recap. After a near nine point drop on February 27, everyone freaked out and started opining on the meltdown of the Chinese economy. A few cooler heads noted that this was profit-taking and a correction in a bubblish market, but they were drowned out to some extent, particularly in the West, by talking heads that look for any little sign of the economic demise of China.  I’ve already covered all that stuff in previous posts.

Freefall theorists have been looking at the market on a daily, or sometimes hourly, basis for vindication of their views. The three-point drop on March 1 was another sign of the end of days.

A little perspective. First, let’s all enjoy reading Fareed Zakaria’s article on why this is not the end of the world. Good piece as usual from a grown-up. Some good background too on the misconceptions about the role of the stock market in China. Here’s also an interesting forecast from Goldman Sachs, as reported in Xinhua. Pretty rosy scenario.

Second, just for the record, let’s look at some numbers. Eeeek! I promise, very little pain involved here. This is just the closing value of the Shanghai Composite Index from February 1 to March 6, thank you Yahoo! Finance.

6-Mar-07    2,840.18
5-Mar-07    2,785.31
2-Mar-07    2,831.53
1-Mar-07    2,797.19
28-Feb-07    2,881.07
27-Feb-07    2,771.79
26-Feb-07    3,040.60
16-Feb-07    2,998.47
15-Feb-07    2,993.01
14-Feb-07    2,905.09
13-Feb-07    2,831.87
12-Feb-07    2,807.17
9-Feb-07    2,730.39
8-Feb-07    2,737.73
7-Feb-07    2,716.18
6-Feb-07    2,675.70
5-Feb-07    2,612.54
2-Feb-07    2,673.21
1-Feb-07    2,785.43

Don’t see anything dramatic? Good for you, there isn’t anything too exciting to see. Certainly no meltdowns. Let’s pull back a little more to look for a trend:

OK, now we’re looking at December ‘06 to the present. Looks pretty good, huh? Big time gains over this period, which prompted a lot of folks to talk about bubbles and the need for a correction (I could have taken that out further in time, by the way and the trend holds). Looking at that curve, there is plenty of additional room, perhaps, for additional corrections to occur. I don’t know what the fundamentals are here, just looking at the overall trend, which is positive.

Can we stop talking about a financial catastrophe now? Please don’t make me blog on this again, I’m obviously not a stock market guy.