Credit Suisse

• Greek PM keeps lid on party rebellion to pass bailout vote (Reuters)
• Greek Prime Minister Alexis Tsipras Remains Popular Despite Tough Bailout Deal (WSJ)
• Beijing's stock rescue has $800 billion bark, small market bite (Reuters)
• Capital exodus from China reaches $800bn as crisis deepens (Telegraph)
• Why Investors Shy Away From China’s $6.4 Trillion Bond Market (WSJ)
• Oil Rigs Left Idling Turn Caribbean Into Expensive Parking Lot (BBG)
• Bank of America replaces CFO in management shake-up (Reuters)
• The Financial Buzz? Pearson to sell Financial Times (Reuters)

A slow week devoid of virtually any macro news - last night the biggest weekly geopolitical event concluded as expected, when Greece voted to pass the bailout bill which "the government does not believe in" just so the ECB's ELA support for Greek depositors can continue - is slowly coming to a close, as is the busiest week of the second quarter earnings season which so far has been largely disappointing despite aggressive consensus estimate cuts, especially for some of the marquee names, and unlike Q1 when a quarterly drop in EPS was avoided in the last minute, this time we won't be so lucky, and the only question is on what side of -3.5% Y/Y change in EPS will the quarter end.

After investing $410 million in March 2013, two billionaires are about to make a $500 million return an investment they have held just over two years, with the blessing of a whole lot of debt investors. And all they had to do was pick up the carcass of a company which did nothing more than crush its unions.

• Stocks sour as Apple results leave bitter aftertaste (Reuters)
• Awkward Alliance Running Germany Exposed by Greek Crisis (BBG)
• Apple Faces Old Question of What’s Next After Record Profit (BBG)
• Lawmakers, White House Explore Tax Revamp for U.S. Firms Overseas (WSJ)
• Digital Misfits Link JPMorgan Hack to Pump-and-Dump Fraud (BBG)
• More Debt Traders at Risk as European Banks Report Results (BBG)
• Iran rejects sanctions extension beyond 10 years (Reuters)

If the US economy is truly firing on all four cylinders, then how are events such as the repeat bankruptcy of America's first national supermarket chain, supposed to happen?

The ongoing downshift in property construction will continue to undercut China's demand for commodities, raw materials and machinery, weigh on property as well as mining and industrial investment, and be a drag for overall GDP growth in 2016. The most direct and important channel through which this impact spreads is trade linkages, given China's role as the top exporter and second largest importer in the world.

Due to significant retail participation and the fact that the equity mania in China has served as a distraction for a nation coping with decelerating economic growth and a bursting property bubble, some (and we were among the first) began to suggest that the broader economy and indeed, social stability, may be at risk in China if stocks continued to fall. The extent to which this suggestion represented a real concern (as opposed to the ravings of a tin foil hat fringe blog) was underscored by the extraordinary measures China adopted in a desperate attempt to stop the bleeding and, later by several sellside strategists who began to warn about possible spillovers into the real economy. Now, with Beijing still struggling to restore the stock bubble, the first signs of knock-on effects are beginning to emerge.

After a brief "don't fight the PBOC" three days of releveraging, China margin debt declined once again to 4-month lows. An opening pop - as is now ubiquitous has faded in FTSE China A50 futures but CSI-300 futures (which expire today and are this subject to some 'odd' behavior) are holding modest gains, despite a quarter of Chinese stocks remain halted. For those tempted back in to the deep end of global equity risk, we offer what must go down as the Baghdad Bob quote of the year, from the Chairman of HKEX, "China's stock market is the safest in the world."

• Tsipras Braves Parliament on Aid as Greek Outlook Worsens (BBG)
• European markets rise before Yellen speech, Greek vote (Reuters)
• China’s Growth Beats Economists’ Forecast as Stimulus Kicks In (BBG)
• China stocks drop again, positive data shrugged off (Reuters)
• Yellen intensifies Republican outreach amid Fed probe, Senate bill (Reuters)
• Iran deal holds both promise and peril for Hillary Clinton (Reuters)
• Iranians Party Into the Night as Khamenei Backs Accord (BBG)

Just when the Chinese plunge protection team (and "arrest shortie" task force) seemed to be finally getting "malicious selling" under control, first we saw a crack yesterday when the composite broke the surge of the past three days as a result of yet another spike in margin debt funded purchases, but it was last night's reminder that "good news is bad news" that really confused the stock trading farmers and grandmas, which goalseeked Chinese economic "data" beat across the board, with Q2 GDP coming solidly above expectations at 7.0%, and retail sales and industrial production both beating, but in the process raising doubts that the PBOC will continue supporting stocks.

As $170 billion hedge fund Bridgewater noted, "new participants are now discovering that making money in the markets is difficult," and sure enough, as WSJ reports, Asian hedge funds have suffered steep losses in June. Several hedge funds were hit with losses on longs (unable to square positions due to suspensions) as well as a dearth of effective tools to short, or bet against, Chinese stocks as they dropped, highlighting the downside of investing in an environment where managing risks is difficult and government actions are unpredictable.As the world anxiously awaits tonight's Retail Sales, Industrial Production, and crucially #goalseeked GDP, Chinese big cap stocks are continuing losses from the last 2 days. The CSI-300 - China's S&P 500 - is now down over 7% from post-intervention highs on Monday.

"There’s been a colossal misjudgment of future demand. That long boom made it especially difficult for people to expect anything otherwise. Many bought the big story about urbanization, instead of thinking how things could go bad."

"With the drastic fall in share prices recently, social stability is clearly at stake," Credit Suisse says. With the bubble now finished it is only a matter of time before all the 'nouveau riche' farmers and grandparents see all their paper profits wiped out and hopefully go silently into that good night without starting mass riots or a revolution.

You might be tempted to suspect that the inevitable unwind of a completely unsustainable margin mania is to blame for the brutal selling that has cost Chinese shares some $3.5 trillion in market value over the last three weeks. But you’d be wrong, according to several Chinese newspapers.