Evergrande is Not Lehman. No CDO or Mortgage Backed Securities. This is Not a sudden event.
Further, the Guangdong Gov (shows you how localised it is) has been going through the books with Insolvency Specialists.
This means they have had time to update the Gov if it could cause a domino outcome.
Remember, the Chinese Gov is sitting on $3T in reserves, so if they need to rescue it, they could easily do it.
But I suspect they will let it deflate, so it will cool the highly speculative housing sector.
IMHO, it will cause some localised problems, and will be over in a few days once the market have priced it in. Of course, shorters who are hyping it up, will make a few coins during this time.
The banks, bond holders and investors will have to take a big haircut.
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