A quite impressively ridiculous stock market bubble is frothing up on the Shanghai Composite in China.
The market is up by more than 50 per cent in this calendar year to date, and as the index approaches 5000 it is well over double the level it was at in May 2014 when the index was in the low 2000s range.
The history of stock bubbles suggests that the market could be absolutely anything from here, but when the tide does eventually turn, the correction will likely be swift and painful.
Indeed, even these lofty heights are not uncharted waters for China.
The long term chart shows that the stock bubble ended in tears last time, and in all likelihood it will do so again this time...eventually.