The imminent default of the most indebted property developer, Evergrande, has triggered much debate amongst risk folk. Will there be spiralling of property prices started by dumping stock at fire-sale prices? Who is going to buy them? Are they catching a falling knife? The answer is that we do not know how things will unfold. We can only draw from history, consider other crises, and see if we can stitch together a stress test.
(Apologies to scholars of Nietzsche for this title)
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