China: Cautionary Tale

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5675198/Chinas-banks-are-an-accident-waiting-to-happen-to-every-one-of-us.html

China's banks are an accident waiting to happen to every one of us


It's not just quantity of loans that is important, it's quality too (as we have just learned). Chinese equity markets have rebounded smartly from their recent lows, due in large part to easy money. It may be best to take a breather. Pundits first claimed that the economic crisis would be contained in the U.S., not spreading to the faster growing emerging markets. This was a faulty premise, these emerging markets depend on the U.S. for exports. It seems highly unlikely to me that these same economies can recover without a significant recovery in the U.S.