Just when you thought it was safe to buy the 12% collapse (the biggest since Lehman) in Chinese stocks, they re-plunge another 3-4% with no dip-buyers evident. The drivers are twofold: first, China PMI beat expectations modestly (uh oh no more QDII, QE, PSL, etc.); and second – and much more critically – The PBOC Operations Office has called for stricter regulation of brokerage liquidity (implicitly clamping down on the seemingly infinite expansion of margin lending required to fuel the boom).