What's Going on in China?

Walter Kurtz at Pragmatic Capital has been watching short-term interest rates in China and is sounding the alarm.

This graphic is the equivalent of the US Federal Funds rate (or the overnight rate banks charge each other). One of the classic signs of an impending recession is when short-term interest rates are higher than long-term rates. It's a sign a central bank is stiffening; although in this case it may be that their central bank is simply looking the other way. 

You do hear stories of empty cities built with cheap money and that Chinese authorities want to curtail this speculative activity. This is one way to do it.

Now, can they do it without triggering a recession. This bears watching.