While the U.S. saw their home prices plunge and begin to recover, China and Canada have still been in what's been considered a housing price bubble. China even more worrisome when you consider their large shadow banking system (alleged to be 25-30% of their entire financial system) which runs behind the scenes and basically ignored by larger banks. They are, after all, providing a service to small business and investor but at risk and what cost?
(China home price index to the left - Canada's home pricing index to the right. )
In 2013 Fitch estimated China's shadow banking system represented an astounding 60% of GDP. Yep, 60% and no one's paying attention to the children in the playground? Mind blowing. For all the complaints here in the US over government regulation, they are there when we need them; pulling on the reigns and don't wait until the child runs into traffic in front of a truck. Well, they usually don't.
In any case, China's credit-market gauges are triggering al
