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China’s property giant Evergrande files for bankruptcy protection in Manhattan

cnbc.com

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Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#101

Post by AnthonyMouse »

satvikpendem wrote: post #73
AnthonyMouse wrote: post #24

Earlier quoted context omitted.

The problem with these terms is not that they have no meaning, it's that they have no context-free virtue. Prohibiting leaded gasoline is good and prohibiting housing construction is bad, even if they're both government regulations. Competitive markets are good and concentrated markets are bad, even if they're both markets. But people want to assign a label to the category instead of the instance, and then they fight…

Indeed, or put another way, nuance doesn't exist on the internet. I've seen this time and time again, where one party will blame something on capitalism or government regulation as some blanket statement, without saying which policies they're even talking about. At that point, it's a tribal opinion that was arrived at through emotional means, not logical means.

Better yet, sometimes that is what it is. For example, it's plausible that cost disease is largely a result of government regulation, but it's not a result of a specific government regulation, it's a result of the total number of regulations increasing over time like a ratchet when each one adds another tick to the cost of doing business.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#102

Post by starfallg »

louis8799 wrote: post #45

- Li Ka Shing, richest man in Hong Kong, just offered an immediate 30% off on his newest buildings for sale -> This also result in immediate sold-out with 22X over-subscription.

Hong Kong is a completely separate market to mainland China, the latter is further segmented by region/city. Li more or less withdrew from mainland China in the past decade or so.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#104

Post by RugnirViking »

AnthonyMouse wrote: post #29
ipnon wrote: post #5

There are many real estate giants and so-called "trust" companies who are incapable of repaying debt right now. Some of these companies have trillions in RMB on their balance sheets. The central bank can bail them out but at the expense of the assets of the middle and lower class. This would only further incentivize cash hoarding, and tighten the middle income trap. It is not an enviable situation.

Are they actually underwater or do they just have higher loan payments than rental income? If it's the latter, let them sell some properties or transfer them to the bank in lieu of loan payments.

there is deflation in china right now. Why would you buy a house today if the money you have today would buy a bigger house tomorrow?

As a result, nobody can sell. The only way to move any inventory is to dramatically slash the price. Everyone is doing this, so you gotta do it even more than the next guy (or just hold on to the property but what if you need the money/can't maintain the property?). I've heard of 2mn rmby apartments in beijing going for 100k

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#105

Post by ksey3 »

hurril wrote: post #95
throwaway2037 wrote: post #85

Earlier quoted context omitted.

Some of these companies have trillions in RMB on their balance sheets. I don't understand this sentence. It is nonsensical to use balance in this way. You wrote "trillions in RMB". Let's assume (your hand-wavy use of the term) balance sheet means: outstanding debt. Further, each 1T RMB is 137B USD. How many companies in the whole world carry more than this much debt? Let alone Chine property developers? Wildly overst…

Moral hazard and inflation. If I know that I will be bailed out with a certain probability, then my actual cost of capital is much lower (since I am not expected to pay the entire volume of interest.) For instance: why not make the investors whole again instead by giving them the "printed money" instead of going through the middle-man of propping up these failed giants?

In the US sure, where its blasphemous to slit the throats of the leisure classes for their excesses. In China they made Jack Ma disappear.

Through out history when it gets time for the Kings & Queens to waive the debt of the plebs away, cause they have nothing left to pay, the Rentier classes take the haircut.

In the US the rentiers have owned the Kings & Queens for a long time. To the point where any American institution cant touch them. This is not the case in China. There will be mass disappearances and cullings (already have been).

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#106

Post by throwaway2037 »

jamesaurichs wrote: post #18

Some real estate related news from China: - Country garden, China's second biggest property company after Evergrande, missed a mere 22.5M payments for dollar denominated bonds. It is trying to restructure a $340B debt owned. https://abcnews.go.com/Business/wireStory/chinas-government-... - Li Ka Shing, richest man in Hong Kong, just offered an immediate 30% off on his newest buildings for sale - One of China's bigges…

SCMP says CKC Holdings only reduced prices by 16% on less than 300 units in a single building in a non-premium location. The 30% figure only comes from shitty, click baity "news" sources. Property analysts felt that 16% cut was in line with the market. No one with deep understanding of that market is clutching their pearls too tight.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#107

Post by bufferoverflow »

matkoniecz wrote: post #77
bufferoverflow wrote: post #56

Earlier quoted context omitted.

Housing can't be inflated and unaffordable at the same time. Someone is buying properties, driving prices higher. Those someone can definitely afford housing.

> Those someone can definitely afford housing. By "unaffordable" people mean that median person/poor person has problem with paying for housing. Not that no one at all can afford it.

65.8% of Americans own a home as of 2022. Which covers the median person and some below that.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#109

Post by robjan »

blackoil wrote: post #93
jskrablin wrote: post #81

Earlier quoted context omitted.

It may work in short term but then you run out of population in long term. And suddenly any gains from short term improvement is under a big question mark.

Why does China need 1.5 billion people?

Future generations have to pay off the debt generated by the current generation. Same as everywhere. You can either grow the population or make the economy more efficient, China still has the latter lever available to pull.

Re: China’s property giant Evergrande files for bankruptcy protection in Manhattan

#110

Post by dmix »

throwaway4good wrote: post #82
oblio wrote: post #57

Earlier quoted context omitted.

> it was all about keeping asians down and dependent. Probably because of this. The US is allied to several prosperous Asian countries.

Who all got seriously smacked down when they got too independent (from the Vietnam war to the Plaza accord).

Neither the Vietnam war nor Plaza Accords were about "keeping Asians down". Unintentional side effects is not intention. A very important distinction.

Japan's recent Stagflation has plenty of obvious internal causes. Blaming the west for that is some weird cope.

China is an expert at manipulating their currency and internal markets for global advantage. Countries reacting to China's top-down aggressive self interest in a global market is only logical. Other countries engaging in those markets aren't there for charity and nor is China.

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