As the past trading week drew to a close, the People’s Bank of China was getting increasingly nervous about the money evaporating from Chinese stocks. The central bank decided it was time for an about-face, quickly moving to ease credit. Just a week or so earlier, China’s central bank had quietly drained some funds from the country’s financial system, another step in the dance between the PBOC and investors. Its objective, according to banking executives and officials close to the central bank: to take some heat out of the country’s feverish stock market by preventing banks flush with cash from funneling money into stocks. But the effort had gone awry, sending a signal to investors that Beijing’s recent easing cycle was coming to an end. Chinese equities plunged in the following days, culminating in Friday’s 7.4% decline, their biggest one-day drop in years. Panic selling even spilled over to […]