Mish's Global Economic Trend Analysis Tue 2010-05-18 16:29 EDT
Canaries in Coalmine: China, Asia, not Participating in Euro Bailout Lovefest; Beginnings of China Credit, Real Estate Bust
Is China a canary in the coalmine of an impending global slowdown, or is China simply overloved as a beacon of growth as it was in 2008? I think it's both. China's property and infrastructure bubbles are massive; that is for certain. Moreover, China's biggest export trading partner is Europe, just as Europe is headed for numerous austerity programs. While it's doubtful the European austerity programs bring deficits down to where they are supposed to be, those programs will for a while cause a decline in European spending along with much social unrest. Can China take a double whammy like this without overheating? I think not. And China will have to show things down, whether it wants to or not. ... The "China Story" that most of the world is in love with is nothing more than excess credit finding a home in malinvestments just as happened in the US.
Asia; Begins; canaries; China; China credit; coalminer; Euro Bailout Lovefest; Mish's Global Economic Trend Analysis; participated; real estate bust.