Are You or Is Anyone You Know, A Short Seller?

Bloomberg: Man Group’s China Chief Said to Assist Police in Probe

Chinese authorities took Li Yifei, chairwoman of hedge fund Man Group Plc’s China unit, into custody to assist with a police probe into market volatility, according to a person familiar with the matter.

Li assisting with the investigation doesn’t mean she is facing charges or has done anything wrong. She has led Man Group in China since November 2011, according to her profile on LinkedIn. The person asked not to be identified because the probe isn’t public.

A call to China’s Ministry of Public Security rang unanswered Monday. Rosanna Konarzewski, head of communications for Man Group, declined to comment. Li’s mobile phone was turned off when called today.

There was no malicious short-selling when the Nasdaq collapsed in 2000, or in 1929 when the stock market collapsed. Authorities in China blew a bubble and now it has burst. They should have left well enough alone and today everyone would be a bull on China because the market would be up maybe 20% in past year, or at the very least, the volatility would be contained at much lower levels. Instead, they created instability by creating short-term speculative demand.

China's response is not unique. When the efforts of central bankers begins to fail and uncontrollable chaos begins in the financial markets, there may be literal civil war in some nations as factions fight to blame or avoid blame for the collapse.