"Large parts of the market are closed, and those stocks that are still trading are selling off regardless of support measures. Clearly something very serious is happening"

OK, its (really easy) competition time!

All you have to do is guess which stock market the above quote is referring to!

Yeah, I know .... too easy ...

More from the UK Telegraph:

  • Fears that the Communist Party may be losing control after stoking a series of epic bubbles in property, corporate investment and equities to keep up the blistering pace of economic growth
  • All of the year's advances have been wiped out
  • Chinese authorities appear to have been testing the waters to see what would happen if they stopped intervening. The market verdict was swift and brutal. "They have got themselves into a very difficult situation. They have put a lot of credibility on the line to shore up prices and this credibility has been badly damaged" (Mark Williams, chief Asia strategist at Capital Economics)
  • Chinese media reported on Monday night that the state regulator is ready to intervene with yet more stock purchases. It has already bought an estimated $250bn of equities and has borrowing lines for a further $450bn if necessary
  • Western banks say they are coming under heavy pressure from Chinese officials to refrain from negative comments. They are effectively gagged if they wish to do business in China.
  • "Large parts of the market are closed, and those stocks that are still trading are selling off regardless of support measures. Clearly something very serious is happening," said one economist.
  • The government's heavy-handed measures include a ban on short sales and on new share issues, as well as pressure on the 300 largest companies to buy back their own stock, and forced purchases of stocks by brokerage houses

David Cui, from Bank of America, said $1.2 trillion of stock holdings are being carried on margin debt. This is 34pc of the free float of the Shanghai and Shenzhen stock markets.

"When the market ultimately settles at a level that can be sustained on fundamental reasons, we expect that the financial system may wobble, due to high contagion risk," he said. "Most leveraged positions may suffer from losses ultimately, likely in trillions (of yuan). The risk is that the unwinding of the leverage will be disorderly: due to implicit guarantees behind most shadow banking products, investors could easily panic," he said.

Mr Cui said the brokers and trusts have barely 1.6 trillion yuan ($260bn) to absorb losses and may be overrun. "Given the particularly thin front line of the financial institutions, we suspect that it's a matter of time before banks may have to face the music," he said.

More at the article. Have a nice day. :-D