China's Minsky Moment Risks are Increasing

Last year I warned (with the failure of a large "shadow bank") that China might be approaching a Minsky Moment. The Chinese economy has largely drifted since then with sluggish growth and declining consumer spending. And Chinese prices have continued their downwards trend despite the unveiling of a "big bazooka" of fiscal and monetary stimulus to reverse the trend. While Chinese stocks rebounded significantly over the initial announcement, investors found last Saturday's update less than satisfying and Chinese stocks gave up much of their gains.