Red China Goes Redder, Stocks Tumble Despite Government Ban On Bearish Talk

Despite more liquidity injections (CNY35 billion 7day RevRepo), archaic deals for brokerages to manipulate their balance sheets, and local reporters noting China's propaganda ministry ordering state media to publish only positive opinions about the stock market, not to criticize, Chinese stocks are in red once again. The record streak of margin debt declines continues and although futures were driven up early on, any strength has been sold into as unwinds wreak havoc on the ponzi wealth creation scheme. All major indices are in the red with Shenzhen (home of the 500%-club) the worst, down around 2% (though as CNBC would say "off the lows").

Despite this...

 

Stocks can't catch a bid...

 

China Realized Volatility remains extremely elevated...

 

But VIX (implied volatility) has come off highs (though remains in a high risk regime)...

 

Seems like now - heading into the morning session close - would be a good time for some manipulation. But nope - it's getting worse...

 

Because if not this looks awfully ominous...

 

 

On a side note, Mizuho warns that since 2000, SHCOMP has never exceeded its recent high within 6 mos. of losing at least 15%; it will take longer for mainland investors to regain risk appetite.

 

Charts: Bloomberg