5 ms·

I think this is going to end up having some very broad ramifications. The last time a real estate started defaulting on it's debts it create a cascade that ulti

I think this is going to end up having some very broad ramifications. The last time a real estate started defaulting on it's debts it create a cascade that ultimately ended in the 2008 financial collapse.

jpgvm 5y ago
This is very substantially different. The real problem with 2008 was all the banks were leveraged to the tits on mortgage backed securities. Chinese banking system on the other hand is very conservative and the banks are state owned. The problem wasn't real estate developers getting shreked but rather the financial institutions the underpin everything suddenly facing massive liquidity crisis and enormous losses as MBS plummeted. I fully expect a bunch of over-leveraged Chinese RE developers to fold here but I don't expect further contagion unless there is something unaccounted for - like international institutions being overly exposed to bad Chinese RE debt or something.
- papito 5y ago
  Well, we are going to find out if Tether is exposed to it, won't we. Big, if true, and it would set off a nuclear bomb under crypto.
  - jpgvm 5y ago
    Eh, crypto imploding will have zero net impact on anything important. I understand why crypto crew care but I don't get why anyone else would.