We are especially concerned about the financial impact of the homebuyers’ ‘stopping mortgage repayments’ movement,” Ting wrote. “China’s property downturn may finally adversely affect onshore financial institutions after hitting the offshore high-yield dollar bond market.”
* * *
While rising non-performing loans for Chinese banks are “manageable” for now, “more risk events are likely to come, at the backdrop of China’s growth slowdown, residents’ expectation of worse future income, and shrinking property sales,” affecting China’s social stability, Jefferies’s Chen said.
At that point Beijing will be faced with a stark choice: inject a massive amount of liquidity into the market, or brace for the biggest fear for every Chinese politician: a middle-class insurrection. We doubt they will pick the latter.
And while the odds are low that this latest example of testicular fortitude demonstrated by millions of increasingly desperate Chinese citizens will be imitated in the US, the last thing the flailing US economy can afford is a similar self-imposed debt jubilee, one which will see the Fed injection trillions into the economy in no time.https://www.zerohedge.com/markets/china-verge-violent-debt-jubilee-thousands-disgruntled-homebuyers-refuse-pay-their-mortgageChiCom's capitulate and pump Yuan like drunken Fed bankers? Yup.
Contagion resisted? I never underestimate the rank stupidity of the criminally insane...
