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Liang Wenbo of China looks confused in his first round match against Ding Junhai of China in the Betfred World Snooker Championships at the Crucible Theatre on April 21, 2009 in Sheffield, England.
Stock markets in China went into free fall in June, pausing only briefly after massive government intervention. Then on Monday the slump resumed, as the Shanghai Composite tanked 8.5%.
Markets are only slightly lower Tuesday but after a hugely volatile session.
In a note sent to clients on Tuesday morning Reid, Deutsche Bank's head of global fundamental credit strategy, reflects on just what the hell is going on over there. And his conclusion is, well, we just don't know.
Here's Reid on Monday's slump:
There was no obvious explanation for the timing or magnitude of the slump. It ceased to be a free market a long time ago so analysing it is tough. Does the slump really reflect concerns over weaker economic growth when the dramatic bubble ascent occurred at a time of sharply weaker growth in the first half? It all seems pretty random to me.
The conventional wisdom behind the slump is that it has been caused by huge numbers of retail investors being forced to sell shares to pay back borrowed money. But Reid is right that there's no obvious cause to Monday's slump.
Reid isn't the only one to make the point about China's stock markets ceasing to be a free-market. Patrick Chovanec, chief strategist at Silvercrest Asset Management, recently tweeted that China has "destroyed its stock market in order to save it."
Both are saying that the level of government intervention to stop the slump has been so great that stock markets are no longer functioning freely.