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Pastimes : Psychology and Investment Behavior

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From: cgcoss2/17/2015 1:56:31 AM
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Globally, the scariest figure by far has to be that China’s debt has quadrupled since 2007. This was driven by real estate and shadow banking, up to 282% of GDP. If you want to put this in perspective, this figure is larger than the United States or Germany.

McKinsey’s three warnings on China are as follows: half of all loans are somehow linked to China’s overheated real-estate market; unregulated shadow banking accounts for nearly half of new lending; and the debt of many local governments is probably unsustainable. The only good news is that China’s government is believed to have the capacity to bail out the financial sector if a property-related debt crisis develops.

247wallst.com
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