Quote:Will the Bankruptcy of China's Evergrande Group Set off a Chain Reaction to Financial Armageddon?
Quote:Evergrande Group, one of China's largest real estate conglomerates, filed for Chapter 15 bankruptcy in New York Friday after failing to make interest payments on $84 million in off-shore bonds. The company reported liabilities of $340 billion against $256 billion in assets. Evergrande Group has been a darling of those tempted to invest in China. Over the past few years, it has branched out from real estate into ventures such as professional sports, entertainment, and finance.
Quote:Chapter 15 bankruptcy is similar to Chapter 11, where the debtor is asking for protection against creditors while it attempts to un-f*** its business model and continue with operations. Except with Chapter 15, the company is based in a foreign country and has assets in the United States.
This is not a trivial action. Evergrande's debt represents 2% of China's GDP. When you consider that real estate comprises 30% of that GDP, you can see the magnitude of the problem.
Quote:How did Evergrande go bankrupt? In the words of Ernest Hemingway, "Gradually, then suddenly."
In recent years, Evergrande has become an emblem of China’s real estate crisis.
In 2021, under the weight of $300 billion in liabilities, Evergrande defaulted on its debts, sparking a string of defaults at other building companies. Analysts described the Chinese government’s approach to Evergrande as a “controlled demolition,” in which authorities allow the company to continue operating as they guide it through a gradual collapse.
Last month, the company disclosed losses of $81 billion over 2021 and 2022.
Since China’s real estate debt crisis began in mid-2021, companies accounting for 40 percent of Chinese home sales have defaulted, according to Reuters. As a result, many homes have been left unfinished and suppliers and creditors left unpaid. Real estate is responsible for a quarter of economic growth in China; property investment declined 7.9 percent in the first half of 2023.
Country Garden, another major developer in China, recently missed payments on its multibillion-dollar debt, further rattling home buyers in the world’s second largest economy.
Quote:How did Evergrande go bankrupt? In the words of Ernest Hemingway, "Gradually, then suddenly."
In recent years, Evergrande has become an emblem of China’s real estate crisis.
In 2021, under the weight of $300 billion in liabilities, Evergrande defaulted on its debts, sparking a string of defaults at other building companies. Analysts described the Chinese government’s approach to Evergrande as a “controlled demolition,” in which authorities allow the company to continue operating as they guide it through a gradual collapse.
Last month, the company disclosed losses of $81 billion over 2021 and 2022.
Since China’s real estate debt crisis began in mid-2021, companies accounting for 40 percent of Chinese home sales have defaulted, according to Reuters. As a result, many homes have been left unfinished and suppliers and creditors left unpaid. Real estate is responsible for a quarter of economic growth in China; property investment declined 7.9 percent in the first half of 2023.
Country Garden, another major developer in China, recently missed payments on its multibillion-dollar debt, further rattling home buyers in the world’s second largest economy.
Quote:As creditors have already seized a $1.6 billion high-rise in Hong Kong owned by Evergrande as well as the Evergrande headquarters and the personal mansion of Evergrande's Hong Kong chairman, its overseas creditors may be less than inclined to cut a deal when they are uncertain about the ability of Evergrande to survive in China.
Keep an eye on Country Garden; it is following the same glide path as Evergrande. It, and several other real estate investment groups, may fail even if Evergrande survives, but they will definitely fail if Evergrande goes under.
For a look at the bigger picture, I'd recommend this video.
Quote:Keep in mind the data used in this video are official Chinese numbers, which means they are a) fake and b) when the fake data produced by a totalitarian state is bad, rest assured that the real numbers are worse.
Inevitably, this bankruptcy — and those waiting in the wings — will have a huge impact in Europe, which before COVID had started to resemble a Chinese satrapy. It will also hit Wall Street, where money managers never seem to have the curiosity to ask what they are investing in so long as the quarterly gains are there.
In a worst-case scenario, this sh**show will finish its gestation period just about when the presidential primary season starts to gain intensity.
~1.5 yrs. ago, somebody asked me why I saw deflation coming down the long term row-add ... it's coming boys and gals ... one can only rob peter to pay paul for so long before the proverbial hits the fan...
Evergrande and muh Gina's zealous attempt to take over the world's currency
Not a bad reaction, problem is they not only own trillions of our debt, they own our White House as well.
China devalues again or defaults on what they owe, we’ll see a global depression.
Gonna need a LOT of resets.
Anyone else remember Zimbabwe when people used their dollars for wallpaper cause it was cheaper than buying actual wallpaper? They were printing trillion dollar notes for regular citizens?
Anyone else recall the old saying “being sold down the river”?
Yea, we’re being sold down the river by our new overlords.
And, yes. I know what the term came from. Spare it, you get the point.
RE: Evergrande and muh Gina's zealous attempt to take over the world's currency
I was just explaining to someone the other day why I have zero fear the China’s currency will replace the dollar on the world stage. Short answer - their whole economy is a scam and a scam only works until it suddenly doesn’t, then it explodes instantaneously.
China has been playing the real estate shell game for more than 30 years. It’s accomplished by government control of everything and then reporting total BS. China can print unlimited Yaun in complete secrecy and use those funds to buy real estate around the world, use it to bribe other countries with infrastructure projects, and buy hard assets around the world. They can do this because the government controls all the banks.
Only 11% of their debt is held outside the country. Keep in mind that the 11% figure is only that high because they lie about what their real total debt is. Since they don’t run around borrowing money like we do they face very little regulatory scrutiny.
Since the government has 100% price control within China they can keep inflation wherever they want it on all but imported goods.
Just think of it like this, you have a printing press in your basement, you always pay in cash and no one is curious because you must be rich since you never have to borrow money. They finance the construction of cities no one lives in to boost GDP to inflate their economic profile, they lend money to third world countries taking their national assets as collateral, but the money is no different than those trillion dollar Zimbabwe notes, just with a craftier game plan.
RE: Evergrande and muh Gina's zealous attempt to take over the world's currency
Yet another currency in free fall. In twenty years people will be laughing at old articles that talked about China taking over the world, kinda like we used to worry about Japan taking over the world in the 1980's. As pointed out above, the Chinese economic system is a joke. They litereally built empty cities in the middle of nowhere just to keep up the employment numbers. Given that China's demographics mean their population will almost be cut in half as early as 2050----those cities recently built empty cities will always be ghost towns. You always know when China is in trouble---they have a habit of stopping the public release of economic numbers that might cause problems....like now.
(This post was last modified: 08-21-2023 12:17 AM by Attackcoog.)
RE: Evergrande and muh Gina's zealous attempt to take over the world's currency
Ive been watching Joe Blogs for a few years now. He is good. He was calling out and detailing the Chinese real estate stuff about three years ago.
I got ahold of some short plays with US-based investments that tied in to Countrywide and/or Evergrande about two years ago. Did okay with them.
To Coog -- its not just that they are empty cities, but the methods they use to operate are sick. They literally sell their stuff to Chinese citizens on ground breaking, and use those proceeds to finish up their project 3 projects ago. Literally a cash flow shell game.
They went pro offering foreign bonds about 3 years ago.
The Chinese internal national sales/ debt default by Evergrande and Countrywide is thought to be on the order of 4-5x *more* than the foreign funds that are in default.
China effectively nationalized Evergrande last year, and has arm bent Evergrande's previous and ongoing contractors to finish up the current domestic projects. Effectively forcing those building contractors to bite the losses.
The goal is to keep the populace from going beserk --- if you remember the bank riots/ demonstrations last year their -- that was sparked by Evergrande selling pipe dreams and the Chinese populace paying mortgages on projects that dont even necessarily exist. The Chinese govt has stepped in there to make sure that Chinese customers who are paying Evergrande for non-existent places will get places --
I dont expect *any* foreign debt holder of Evergrande or Countrywide to see *anything* back. Since those two are effectively run by the Chinese government, the Chinese government will run any foreigner over to make sure that their populace who was fleeced doesnt pay -- trying to keep the rebellion spirit down as much as possible.
Quote:Will the Bankruptcy of China's Evergrande Group Set off a Chain Reaction to Financial Armageddon?
Quote:Evergrande Group, one of China's largest real estate conglomerates, filed for Chapter 15 bankruptcy in New York Friday after failing to make interest payments on $84 million in off-shore bonds. The company reported liabilities of $340 billion against $256 billion in assets. Evergrande Group has been a darling of those tempted to invest in China. Over the past few years, it has branched out from real estate into ventures such as professional sports, entertainment, and finance.
Quote:Chapter 15 bankruptcy is similar to Chapter 11, where the debtor is asking for protection against creditors while it attempts to un-f*** its business model and continue with operations. Except with Chapter 15, the company is based in a foreign country and has assets in the United States.
This is not a trivial action. Evergrande's debt represents 2% of China's GDP. When you consider that real estate comprises 30% of that GDP, you can see the magnitude of the problem.
Quote:How did Evergrande go bankrupt? In the words of Ernest Hemingway, "Gradually, then suddenly."
In recent years, Evergrande has become an emblem of China’s real estate crisis.
In 2021, under the weight of $300 billion in liabilities, Evergrande defaulted on its debts, sparking a string of defaults at other building companies. Analysts described the Chinese government’s approach to Evergrande as a “controlled demolition,” in which authorities allow the company to continue operating as they guide it through a gradual collapse.
Last month, the company disclosed losses of $81 billion over 2021 and 2022.
Since China’s real estate debt crisis began in mid-2021, companies accounting for 40 percent of Chinese home sales have defaulted, according to Reuters. As a result, many homes have been left unfinished and suppliers and creditors left unpaid. Real estate is responsible for a quarter of economic growth in China; property investment declined 7.9 percent in the first half of 2023.
Country Garden, another major developer in China, recently missed payments on its multibillion-dollar debt, further rattling home buyers in the world’s second largest economy.
Quote:How did Evergrande go bankrupt? In the words of Ernest Hemingway, "Gradually, then suddenly."
In recent years, Evergrande has become an emblem of China’s real estate crisis.
In 2021, under the weight of $300 billion in liabilities, Evergrande defaulted on its debts, sparking a string of defaults at other building companies. Analysts described the Chinese government’s approach to Evergrande as a “controlled demolition,” in which authorities allow the company to continue operating as they guide it through a gradual collapse.
Last month, the company disclosed losses of $81 billion over 2021 and 2022.
Since China’s real estate debt crisis began in mid-2021, companies accounting for 40 percent of Chinese home sales have defaulted, according to Reuters. As a result, many homes have been left unfinished and suppliers and creditors left unpaid. Real estate is responsible for a quarter of economic growth in China; property investment declined 7.9 percent in the first half of 2023.
Country Garden, another major developer in China, recently missed payments on its multibillion-dollar debt, further rattling home buyers in the world’s second largest economy.
Quote:As creditors have already seized a $1.6 billion high-rise in Hong Kong owned by Evergrande as well as the Evergrande headquarters and the personal mansion of Evergrande's Hong Kong chairman, its overseas creditors may be less than inclined to cut a deal when they are uncertain about the ability of Evergrande to survive in China.
Keep an eye on Country Garden; it is following the same glide path as Evergrande. It, and several other real estate investment groups, may fail even if Evergrande survives, but they will definitely fail if Evergrande goes under.
For a look at the bigger picture, I'd recommend this video.
Quote:Keep in mind the data used in this video are official Chinese numbers, which means they are a) fake and b) when the fake data produced by a totalitarian state is bad, rest assured that the real numbers are worse.
Inevitably, this bankruptcy — and those waiting in the wings — will have a huge impact in Europe, which before COVID had started to resemble a Chinese satrapy. It will also hit Wall Street, where money managers never seem to have the curiosity to ask what they are investing in so long as the quarterly gains are there.
In a worst-case scenario, this sh**show will finish its gestation period just about when the presidential primary season starts to gain intensity.
~1.5 yrs. ago, somebody asked me why I saw deflation coming down the long term row-add ... it's coming boys and gals ... one can only rob peter to pay paul for so long before the proverbial hits the fan...
y'all ain' seen shite, yet!
News travels in seemingly unrelated ways but for the discerning can reveal agendas.
Global depopulation and the collapse of the Western currency due to a major Chinese international player are unrelated except that both ties directly into the consumption of major commodity assets. China for decades has been hording precious metals and rare earth minerals. While Western markets are in disarray it would be the perfect time for Chinese military incursions into the Middle East for oil and into Africa for rare earth minerals. If it is synchronized with a move by Russian and N. Korea we could see it push into Europe and possible attempts to move into Australia or South America. Certainly, Taiwan and Japan could be in jeopardy. They might even claim to make such moves to help quell civil unrest resulting from the financial collapse and use that a rouse to go after the commodities they want.
The key world operative over to the population issue is "sustainable resources" it makes murder sound so much more responsible, doesn't it!
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Evergrande and muh Gina's zealous attempt to take over the world's currency
