> Margin debt, for instance, has increased significantly in China It is even more insidious than that. Chinese companies have pledged their stocks as collatera

> Margin debt, for instance, has increased significantly in China It is even more insidious than that. Chinese companies have pledged their stocks as collateral for loans so the whole thing is a pile of circular promises, one built on top of the other. This is the real reason why the Chinese authorities suspended so many shares from trading before they stabilized the market. If the shares had continued to go down, it would have resulted in a massive credit crisis since billions and billions in loans would go into default. For more details see: http://www.bloomberg.com/news/articles/2015-07-08/this-is-why-so-many-chinese-companies-are-suspended http://www.bloomberg.com/news/articles/2015-07-08/this-is-wh...