July 4, 2015 China’s government in a Freudian slip admitted they are manipulating the Chinese Stock market. The recession cycle has averaged about seven years and the last stock market peaks were in 2000 and 2007. So we are due for a major correction. Chinese stocks tumbled again losing more than 10 percent last week. After a slump of nearly 30 percent in Chinese stocks since mid-June, the China Securities Regulatory Commission (CSRC) regulator said it was investigating suspected illegal market manipulation aimed at heading off a full-blown stock market crash. Only legal Chinese government manipulation is allowed. After market close, a CSRC spokesman said China would cut IPOs to help stabilize prices. It also said China's official speculative margin lending for stock purchases would be quadrupled to $16 billion to expand speculation.

            A flurry of policy moves over the past week, including an interest rate cut and a relaxation of margin lending rules, failed to prevent the sell-off.  The People's Bank of China (PBOC) also provided 250 billion Yuan to ensure adequate liquidity in the system.  Fu Xuejun, at Huarong Securities Co, said that a market crash would be a disaster for the communists trying to control prices.  The Shanghai Composite Index shed 5.8 percent on Friday.  For the week, the CSI300 lost 10.4 percent and the SSEC fell 12.1 percent.  Chinese stocks had more than doubled between November 2014 and mid-June, fuelled largely by small inexperienced retail investors using margin accounts.  Sources said China suspended 19 accounts from short-selling for a month.  The government is encouraging more pension funds to invest in speculative stocks just when the market is at its seven year peak.

http://www.cnbc.com/id/102807689

http://www.reuters.com/article/2015/07/03/china-markets-idUSL3N0ZJ06N20150703