Stress Test Fever Catching On

This whole stress-test craze is sweeping the globe.  Days after Europe discovered that seven continental banks will have to pretend they're not bankrupt a while longer, another sovereign regulatory body decides it wants to join the fun.  China will now fake its way through stress tests:

China's banking regulator has run stress tests in the country's trust firms to see if they can withstand a downturn in the property sector, the Economic Observer reported on Saturday, citing unidentified industry sources.

Chinese developers have been using property trust products sold by the trust companies as a channel to raise funds for new projects.

It's not enough for the Chinese to copy the West's intellectual property.  Now they covet our innovative fraud-hiding regulatory games.  What's this world coming to nowadays?  Next thing you know, they'll be copying our provisions for backstopping mortgage underwriting with taxpayer guarantees just to keep their property market bubbling. 

Full disclosure:  Long FXI with short puts and short calls.