Leverage is rapidly unwinding across Chinese stocks: Margin debt on the Shanghai and Shenzhen exchanges fell -2.8% on Friday, or -$11.7 billion, to $405 billion, the largest daily decline since January 2016. This also marks the 4th consecutive daily decrease, totaling -$36.9 billion. This comes as the Star 50 Index, which tracks Chinese technology stocks, plunged -7.1% on Friday, its 2nd-largest daily drop this year, while the CSI 300 fell -3.6%. Memory chip stocks were at the center of the selloff after attracting the highest levels of margin borrowing. As a result, their sharp selloff triggered margin calls, forcing investors to sell and accelerating the broader market decline. Chip stocks have become a global amplifier of market volatility.(The Kobeissi Letter)