I think the biggest issue that Levine writes about today is the fate of the Chinese banks.  If you thought that the American banks were in bed with the government then you haven&#x27;t seen anything yet.<p>The worry is that the banks are currently propping up alot of companies that are for all intents and purposes already bankrupt.  The linked article mentions that about 10% of their loans could go bad which may wipe up to 3.5 trillion of equity away.<p>Most of these companies are limited to China with a bit of exposure due to their ADR&#x27;s trading in North America so there isn&#x27;t much direct market worry.<p>The real worry is that to prop up their own economy China may have to:<p>-  start selling US Dollar holdings to keep its own  at a rate that the rest of the world can&#x27;t absorb,<p>- have their economy grow at a zero rate, something that was almost unthinkable even 2 years ago.<p>Both of these have significant knock on effects for the rest of the world.<p>I have no insight to this myself, I&#x27;m not an economist but the guy really making noise about this is Kyle Bass who made alot of money off the 2008 crash but whose fund hasn&#x27;t done so well since then.<p>So you can either believe he knows what he&#x27;s talking about and get ready or assume he&#x27;s a &quot;one hit wonder&quot; who is unlikely to be right about such a big event again.<p>I will say this.  I talk to alot of people who would love to short China but are afraid of getting burned as there is really no way of predicting if the govnermnet will let some banks fail or if they will throw everything at the problem  to prop up their financial sector.<p>My suspicion is that they will follow the US example and throw billions at the banks in an attempt to right them.