A report from the Wall Street Journal on China. "Chinese regulators made fresh attempts to calm frayed nerves in the country’s financial sector, as bank liquidity remained tight by some measures three weeks after authorities took over a struggling city lender. On Sunday, securities regulators summoned a group of large Chinese brokerages and asset-management firms to a closed-door meeting in Beijing and asked them not to cut off trading and other dealings with smaller banks and financial institutions, according to a meeting summary circulated among industry participants Monday."

"The memo said there had been some defaults in the repo—or repurchase agreement—market, where banks, brokers and other financial firms borrow cash for short periods by pledging securities against short-term loans. 'If such mistrust is allowed to continue to spread, it will eventually become systemic financial risk,' the memo said."

"On Sunday, the People’s Bank of China said that even though a small percentage of Baoshang’s clients didn’t receive a full guarantee on what they are owed, the takeover has helped prevent systemic financial risks and maintain social stability. If regulators had provided a 100% guarantee on all the bank’s liabilities, that would have used up a lot of public funds, the central bank said. That could lead to a moral hazard problem, it said, which could 'encourage the market to act aggressively.'"

The Hong Kong Standard. "A tough road lies ahead for the young, new CEOs of Bank of East Asia (0023). BEA's stock in particular, which fell over 9 percent last Friday, faces a tough test. The sharp fall in the local bank's shares resulted from a profit warning it issued last week, due to problems over its loan assets in the mainland. It's profit downgrade shows that the cracks in the mainland's real estate-driven economy are becoming more and more apparent."

"Guo Shuqing, the chairman of the China Banking and Insurance Regulatory Commission, warned about the 'over-financialization' of the mainland property industry and high household debt ratio. He said some citizens had invested half of their funds into real estate, but history has shown that people have always paid the price of being too heavily invested in the property market."

"I suspect the 'over-financialization' problem he spoke about refers to a housing bubble - similar to the Japanese asset price bubble in the early 1990s - though he did not make it too obvious. According to my observations there are serious oversupply problems in commercial properties, especially office buildings and hotels, in some tier-three and tier-four mainland cities, and the red-hot residential property market is now showing signs of cooling down."

The Malaysian Star. "The amount of housing loans given to some buyers during the hot property years starting from 2009/2010 are more than the current prevailing price, a source from a bank says. The difference between the loan disbursed versus current house prices is further amplified when the borrower defaults and foreclosure proceedings are initiated, the source says."

"'We expect the number of foreclosures to rise going forward,' the source says."

From ABC News in Australia. "Situations like Epping, about 20 kilometres north-west of Sydney's CBD, are unfolding in several parts of the city as Australia's property market slows. According to Steve Mann, the Urban Development Institute of Australia NSW chief executive, the number of 'deferred and abandoned' apartment projects in Sydney has increased 110 per cent in the past year."

"'That's 40,000 to 50,000 apartments,' he said."

"In Cronulla, another Sydney locale that has seen significant development, apartment prices have dropped by 12 per cent over the past year. Developments in areas more than 10km from city centres are seen as the most vulnerable, experts say, with many finding it more difficult to attain financial closure as investors are constrained and prices fall."

"'The market is very challenging for new developments,' Mr Mann said. 'We've also seen nearly two years now of price declines, record price declines, and that's very challenging in terms of jobs and supply of new construction.'"

"Terry Lewis, who has been living in the neighbourhood for 20 years, said it was a double-edged sword. 'Thousands of units have been built, too many I think,' he said. But he said it felt like 'a breather' to have no development on the site. 'As you can see, it's abandoned. Have a look. There's only bush turkeys [that live there] now.'"