Suppose Evergrande isn’t another Lehman

Suppose that the conventional wisdom is right and that Evergrande isn’t another Lehman moment. That still won’t mean that things are OK

Some of us still remember the Japanese bubble economy — or as the Japanese themselves called it, the “babaru economy” — of the late 1980s, when prices of many assets, above all commercial real estate, went completely crazy. 

At one point it was widely claimed that the land under the Imperial Palace was worth more than the whole state of California. 

Then everything crashed.

The bursting of the Japanese bubble didn’t lead to a financial meltdown. But it was followed by a prolonged period of economic weakness

Paul Krugman NYT 24 September 2021

https://www.nytimes.com/2021/09/24/opinion/china-evergrande-japan.html

Evergrande - China will almost certainly avert a Minsky crisis, but...

Ambrose Evans-Pritchard Telegraph 22 September 2021

https://englundmacro.blogspot.com/2021/09/evergrande-china-will-almost-certainly.html