And while US equities futures were looking grim overnight, China at least started off on the right foot, rising a little over 2% in early trading following China's scramble to stabilize markets as it knows the alternative could very well be (deadly) civil unrest.  And then something unexpected happened: the market did not follow the Chinese central bank script. In fact, as noted earlier, stocks plunged tumbling as much as limit down for CSI-300 futs, and the SHCOMP crashing the most since 1996.

This was not supposed to happen: in fact, with China unleashing the bazooka of the double rate cuts, it was virtually assured that at least China's stock would rise as the rest of the world tumbled on Greek worries. That it did not was the biggest red flag, far more so than what the Greek referendum reveals this weekend, as it means that after Sweden last week, now China has lost control!

According to Paul Chan, chief investment officer for Asia ex-Japan at Invesco in Hong Kong, "China's fourth interest-rate cut since November failed to stabilize the stock market as it was seen as a stopgap measure to stem a slide in share prices rather than an effort to revive the economy." He added that "It seems like policy makers are more worried about the stock market than about the real economy. The economy is slowing down and they are so much behind the curve in terms of easing. But as the stock market corrected, they jumped in, putting in all the policies. It gives people a sense of panic."