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Fault Lines

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The Chinese Real Estate Market

Here Is What's Going On In China: The Bronze Swan Redux. A month ago, when stock markets around the globe were hitting all time highs, we wrote "The Bronze Swan Arrives: Is The End Of Copper Financing China's "Lehman Event"?

Here Is What's Going On In China: The Bronze Swan Redux

" which as so often happens, many read, but few appreciated for what it truly was - the end of a major shadow leverage conduit (one involving unlimited rehypothecation at that),and the collapse of a core source of shadow liquidity. One month later, China's "Lehman event" is on the verge of appearing, and with Overnight repo rates hitting 25% last night, coupled with rumors of bank bailouts rampant, it very well already may have but don't expect the secretive Chinese politburo and PBOC to disclose it any time soon. So now that the market has finally once again caught up with reality, for the benefit of all those who missed it the first time, here is, once again, a look at the arrival of China's Bronze Swan.

From May 23:

Local Government Debt

Indicators of overinvestment / malinvestment. The Question of Structural Imbalances. Debt dynamics in the Chinese economy... The Chinese Shadow Banking System.