Shanghai surprise

The big news out of China this morning is that share prices saw their steepest decline in eight months after rumors swirled that the government was about to clamp down on the excessive bank landing that has led to excessive speculation in stocks and housing.

Click to play in a new window

The Shanghai composite index was down almost eight percent earlier in the day before closing with a loss of about five percent following a huge public offering for China State Construction Engineering, the nation's largest homebuilder, where more than 4 billion shares changed hands - about four times the total trading in the Standard & Poor’s 500 Index.