China's Bull Market in Conspiracy Theories

China's financial world has officially entered the paranoia zone. As the Shanghai stock market experiences its worst three-week rout since 1992 -- in defiance of government efforts to reverse the plunge -- government officials are blaming shadowy conspiracies for the sell-off.

One narrative whipped up by state-run media has nefarious overseas forces driving down shares to embarrass President Xi Jinping and stymie China's development. Another conspiracy theory suggests that rumor-mongers are driving shares lower in order to profit from short selling. That's prompted regulators to pledge a crackdown on "vicious" short sellers: Just ask Morgan Stanley, the recent subject of "hidden agenda" allegations by mainland media for voicing bearish views on the trajectory of Shanghai shares.