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by LurkingPenguin 1684 days ago
> It'll sting some emerging market investors, but I don't think you'll see a massive knock-on here.

China has basically been the single biggest driver of global growth over the past decade. Its highly overleveraged real estate market is a huge threat to its overall economy, and that has plenty of potential to create a massive knock-on.

https://www.reuters.com/article/us-economy-global-kemp-colum...
2 comments
whimsicalism 1684 days ago
> China has basically been the single biggest driver of global growth over the past decade. Its highly overleveraged real estate market is a huge threat to its overall economy, and that has plenty of potential to create a massive knock-on.

I think what Western observers are missing is that this was an intentional "let fail" in order to prevent this structural weakness from becoming too big of a problem.

China is basically euthanizing this industry because they perceive it as a structural weakness.

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LurkingPenguin 1684 days ago
> I think what Western observers are missing is that this was an intentional "let fail" in order to prevent this structural weakness from becoming too big of a problem.

I think what you're missing is that China isn't even out of the first inning on this one.

Evergrande hasn't even failed yet. It's a slow-moving trainwreck and the contagion is only just starting to spread.

https://www.reuters.com/world/china/chinas-state-council-hel...

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jerf 1684 days ago
Leverage in the US is very high too. I'm thinking the next crisis will in the end be known as the Leverage Crisis, because it's leverage that will take what was already going to be a big financial crisis into financial catastrophe. It really wouldn't take much to tip us over right now because the ever-rising stock prices are encouraging everyone and their duck to leverage to the max, further pushing up prices... it's not a good cycle.
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