Back in March, when not many outside of China had actually noticed the ridiculous Chinese asset bubble, and when the PBOC had yet to announce the arrest of malicious stock buyers (come to think of it, it still hasn't), we posted "That Ain't No Margin Debt: THIS Is Margin Debt" in which showed the catalyst behind China's unprecedented stock market move higher: a gargantuan increase in margin debt (a reorientation of shadow banking whose conventional conduits were closed since late-2014) which allowed every local illiterate tom, dick, farmer and grandma to participate in the great wealth transfer from the lower and middle classes to corporations and insider sellers.

But so what: the NYSE margin debt at half a trillion is greater, some say and indeed, in isolation China's stock market leverage was not a very useful indicator. So here it is in some truly sensation context thanks by Goldman Sachs:

The explosion in margin financing behind the recent astonishing run-up in Chinese A shares is a new twist on China credit concerns, a long-standing grey swan for Chinese and global growth. As of the beginning of June, the balance of margin financing outstanding was RMB2.2tn, an estimated 12% of the free float market cap of marginable stocks and 3.5% of GDP—easily the highest in the history of global equity markets. And these estimates do not take into account “hidden” leverage from other types of borrowing (i.e., consumer loans and trust products) where proceeds were used to invest in stocks, which we estimate at RMB 1tn to RMB 1.5tn, assuming effective system-wide leverage of 2.2x. We estimate that a significant portion of the hidden leverage has now been unwound and the reported official margin balance has dropped to RMB1.5tn. This unwinding has contributed to a dramatic correction in Chinese equity markets, erasing a sizable portion—though not all—of the stock gains this year. While a range of market-supporting policies (banning of selling from large stakeholders for a period of six months, suspending IPOs, relaxing the forced selling requirement of underwater margin positions, among others) finally halted the sell-off on July 9, questions remain about whether the equity market turmoil could threaten other Chinese assets, economic growth and broader financial market stability.

And here it is visually:

In other words, there is a lot more margin debt unwinding yet to come which also explains the unprecedented panic by Chinese authorities to step in and prevent the ongoing market crash at all costs...

... even if it means filling up China's prisons with malicious sellers who refuse to see how this epic, Frankenstein experiment in central-planning ends and, daring to break the law, sell.