Kiss of the Dragon

Forty seven deadbeats living in the back streets
North east west south all in the same house
Sitting in a back room waiting for the big boom
I'm in a bedroom waiting for my baby
--Escape Club

My friend Vitaliy skillfully sketches structural problems growing in China. What I particularly like about his analysis is that it comes from someone who grew up in a similar authoritarian regime. He has first hand experience of big-time capital misallocation by central planners.

What I wish Vitaliy would have done was sketch the consequences, not just for China but for the world, if (when) this bubble pops.

Nonetheless, his missive heightens my sense that China is a train wreck in the making. The impact of such a crash will certainly resonate globally.