The worry is that large parts of China now resemble Arizona, Florida, and Nevada circa 2007, when the great Greenspan-Bernanke real-estate bubble was going “pop.” “Signs are mounting that the housing market in a number of cities is not just cooling but actually cracking,” Wei Jao, an economist at Société Générale, wrote recently. According to a lengthy report from China in Thursday’s F.T., which quoted Jao, developers are already slashing prices by up to forty per cent in selected areas. But that hasn’t been sufficient to prevent some of them from having trouble keeping up interest payments on the loans they took out to finance construction. And that, in turn, is raising concerns about the Chinese financial institutions that did much of the lending, such as banks, “shadow banks,” and trust companies. (Shadow banks are unregulated finance companies that borrow and lend at interest rates higher than those available in the regular banking system.)

To some observers, particularly fans of Hyman Minsky, the late Keynesian economist, it looks suspiciously like China may be approaching a Minsky moment—that dreadful instant at which most of the participants in the boom recognize that the game is up, credit stops flowing, one or more financial institutions moves to the verge of collapse, and panic ensues. Figures released last month show that credit from China’s shadow banks has virtually dried up. In January, about a hundred and sixty billion dollars’ worth of new loans were issued through shadow banks; in February, virtually none were.