East Asia Popping Bubbles

ZH: South Korea Unexpectedly Hikes Rates On Growing Housing, Debt Bubble Fears

Overnight, South Korea became the first major Asian economy to raise interest rates since the start of the pandemic, as record household debt and soaring housing prices outweighed fears over Seoul’s struggle to contain the Delta coronavirus variant. In the closely watched decision on Thursday, the Bank of Korea raised its benchmark rate by 25bps to 0.75%, increasing the seven-day repurchase rate 25 basis points from a record low of 0.50% with a majority vote.

Reuters: China's property crackdown stalks credit markets

China's push to wean property developers from excessive borrowing is spilling over into loan losses at banks and pain in credit markets as cash-strapped builders fall into distress, raising the risk of fallout rippling across the economy.

Debt and land-buying curbs and hundreds of new rules are hitting developers far harder than they had expected, setting off a scramble to sell assets as well as a steady drumbeat of bankruptcies, defaults and cut-price takeovers.

The regulatory push is the latest in years of efforts to reduce risks in the real estate sector and, as with crackdowns roiling the internet and education sectors, has not been formally announced.

China's economic outcomes aren't always intentional, but the CCP is clearly risking a financial event with current policies. A good question is whether, fresh off their coronavirus "victory" —being seen as handling the virus far better than the USA— China isn't also aiming for a global financial panic "victory?" The CCP would maintain political control through a panic or global recession with its crackdown on corporations already in full swing, while the floundering Baizuo administration in Washington descends into utter chaos as the wheels fly off the economy, stock and crypto bubbles simultaneously.