Default confirmed
China's second largest property developer Evergrande has finally defaulted on its debt mountain, and financial markets were a little spooked overnight, not for the first time.
Of course, one never knows what might happen when it comes to debt defaults and contagion, although there is likely to be a good deal of government intervention to restructure the debt.
Indeed given recent actions it wouldn't be surprising to see Chinese credit and real estate loan growth start to rebound from these lows.
In fact, if you look at a 6-month impulse things have arguably already been rebounding.
As for whether there will be direct fallout for Australian sentiment and the local real estate market, probably not (after all, the actual bankruptcy of Lehman didn't crash the Aussie market in 2008, following the various policy responses).
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