I hope you're right. But reading about firms that are raising loans with their stock as collateral. .. shall we say while staying true to your point are perhaps nevertheless even more exposed than your model's worst case. Only time will tell.
Sure, you're right to be concerned, it's no picnic. Some companies will go bust, and some investors will lose their shirts. It will hurt. It's not yet a systemic risk though. Of course the more the Chinese government panicks and tries to manipulate the market back up again, the worse it will get but right now it doesn't have to be all that bad.
