Outbreaks - 10 different Omicron subvariants have been detected in the PRC, the situation in Lanzhou does not seem to be improving and both Tianjin and Shanghai are doing more mass testing. It is getting harder to see how there is not another massive, disruptive test of “dynamic zero-Covid” in the near future, which in spite of all the tweaks to better balance anti-epidemic work with economic development still means large-scale lockdowns if things look like they may get out control.

Dealing with the mortgage strikes - I am skeptical the movement to withhold mortgages on stalled projects will lead to any significant systemic risks, but the government is moving to quickly to address the problems, from telling banks and local governments to figure it out, to censoring information about the mortgage strikes, to floating an idea of a temporary halt of mortgage payments in unfinished projects to mollify the aggrieved owners. I do think this mess will destroy any hope of a near-term rebound i…