XIN - China's Evergrande Crisis Is Just The Tip Of The Iceberg

• Financial assets crashed worldwide on Monday as the second-largest property developer Evergrande collapsed.
• China has been in a property bubble for years, with home price-to-income ratios over 30X and the development of numerous vacant cities around the country.
• The PBOC already has cut bank reserve ratios many times to avoid a systemic collapse of its property bubble and has limited liquidity creation avenues left.
• Evergrande's collapse has spread to another developer, Sinic Holdings, and others may follow suit due to massive debt levels across China's real estate industry.
• The unwinding of China's property bubble may catalyze a crash in the U.S equity market due to numerous risks facing the U.S financial system.

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