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Christopher Langner

Just Another Cash Crunch, But Bigger

The cause may be seasonal but the dangers are real.

In markets where investors are highly leveraged, things tend to happen slowly at first, then fast. China is having one of those moments, and as with the 2008 crisis, it can't be pinned on one event.

On Monday, the Shanghai Composite Index sank 2.5 percent, then extended that decline Tuesday before rebounding to close little changed. The one-year government note yield rose 7 basis points to 2.72 percent, on top of Monday's 15 basis-point increase. The root cause may be banks.