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

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

#331

Post by local_issues »

hulitu wrote: post #108

> China’s property giant Evergrande files for bankruptcy protection in Manhattan If it is "China’s property giant" why does it "files for bankruptcy protection in Manhattan" ? Why not in China ?

This is actually a great question! The United States bankruptcy court in the Southern District of New York is the best equipped place to manage a massive bankruptcy, likely on Earth. Every complex case you've heard of is managed there. It's a huge reason for NYC's success, and they know what they're doing.

If you need to wind down your car dealership, do it in Guangzhou or Monterry or wherever you happen to be. If you need to unwind GM or Enron, you'll do it in the Southern District Court.

https://en.wikipedia.org/wiki/United_States_Bankruptcy_Court...

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

#332

Post by local_issues »

raincole wrote: post #134
hulitu wrote: post #108

> China’s property giant Evergrande files for bankruptcy protection in Manhattan If it is "China’s property giant" why does it "files for bankruptcy protection in Manhattan" ? Why not in China ?

Bankruptcy is just you admitting to the court/gov you're not going to pay your creditors, and you're ready to face the legal consequence (like reconstruction). They filed bankruptcy in Manhattan because they are not going to pay their creditors in the US. That's it.

They filed in Manhattan in particular for very good reason - the venue is extremely good at huge, complex bankruptcies like this. It's non-trivial to unwind these financial obligations, and is really only done in NYC.

https://en.wikipedia.org/wiki/United_States_Bankruptcy_Court...

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

#333

Post by ethbr1 »

anovikov wrote: post #303
ethbr1 wrote: post #251

Earlier quoted context omitted.

Those are all countries in which I'd hazard a free and open election, without a thumb on the scales and voted in by all citizens, would topple their governments. Your description of Russia seems accurate, ~1995 to ~2010. However, policies appear to be changing into tighter, more direct state control of oligarchs, in an effort to ensure civil stability. Additionally, Putin is now 70... which is getting to the age that…

I don't mean oligarchs. I mean everyday men and women. People don't want to be politically active because they know that Putin allows and wants them to acquire wealth (and even has no problem with them exporting that wealth abroad); and they also know that the masses don't want them to be allowed that, and if Putin is out, most probably masses will have it their way.

Everyday men and women, which I take to mean middle class, aren't a threat or power base in modern Russia.

They don't have voting power.

They don't have demonstration power.

They don't have access to broadcast their free speech via mass media.

Short of outright rioting, there's little they can do that matters to the Russian government.

Which means than in a trade-off between {what the people want} and {what those with power want}, the people are going to be ignored.

> (and even has no problem with them exporting that wealth abroad)

"...discuss reintroducing some capital controls to help prop up the struggling rouble."

https://www.theguardian.com/business/2023/aug/16/putin-meeti...

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

#334

Post by Vt71fcAqt7 »

bradleyjg wrote: post #249
nologic01 wrote: post #228

Fears about the Chinese real estate sector have been around for at least a decade. The amount of stuff that has been erected is just mind-boggling and unprecedented in human history. You cannot "rightsize" an exponential process. But a spectacular bust to obliterate all speculative busts is not the deterministic outcome in this instance. The intermingling or state finances, state supported banks etc. is also a major…

The intermingling or state finances, state supported banks etc. is also a major characteristic of the Chinese system. In such a system you can push around and hide issues, redistribute the pain wherever it is politically acceptable and other such "conveniences". Japan famously has had decades of zombie conglomerates surviving despite insolvency. I don’t think state intermingling is necessary.

Who do you think was proping up those zombie conglomerates?

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

#335

Post by mensetmanusman »

worrycue wrote: post #185
BossingAround wrote: post #44

Earlier quoted context omitted.

If you're talking about the one-child policy, that has been repealed in 2016.

That's kind of late ... Wasn't anyone there keeping an eye on the birthrate?

Not if your paycheck is enhanced by keeping quiet.

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

#336

Post by vkou »

anovikov wrote: post #244
ethbr1 wrote: post #234

Earlier quoted context omitted.

For counterexamples of the primacy of money, see also: North Korea, Iran, Russia, Pakistan. You have to have bases of power, who are compensated and secured. It's less stable, but doable with the right mix of alternatives, to ignore "the people" as one of those bases of power.

Idk how you can include any of those but North Korea in the list (North Korea only exists because China secures it). Russia at least, is a good example of the opposite: give people chance to earn and invest money and enrich themselves and they will give no shit about even the most ridiculous things government does. Soviet Union has collapsed while having whole lot more economic power and raw output of just about ever…

> Soviet Union has collapsed while having whole lot more economic power and raw output of just about every industry, and was much more up to date technologically, but it deprived people of their basic instinct: to save and invest money and grow rich.

The Soviet Union pissed half of its economy away into its military, and the other half into its particular brand of waste, inefficiency, and corruption. It had a shortage of housing, basic consumer goods, and appliances - a shortage of material wealth, which became untenable by the time the fourth post-war decade rolled around, and everyone started wondering why the country has 12,000 nuclear warheads, but is still so goddamn poor.

If material wealth weren't the problem, or if Gorbachev didn't decide to stop imprisoning people for complaining about it, it would still be around today.

The world's three meals away from anarchy, if there were serious material shortages in the US today, nobody would give a crap about what monetary policy it follows, or whether or not you can save. King Bread is a ruler you swear fealty to, compared to him, King Dollar is something that comfortable philosophers build elaborate arguments for and temples to.

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

#337

Post by somenameforme »

satvikpendem wrote: post #319
vkou wrote: post #147

Earlier quoted context omitted.

> Systems of social security, healthcare, and the general economy will just collapse under that sort of pressure. Maybe we could buttress them by all the 4x to 10x productivity gains that automation has brought us. [1] Maybe we could cut back on all the useless, extraneous, low-to-negative ROI shit we're doing. We have options, here, that don't require a population ponzi scheme. (Also, you can't be blaming this situa…

> Remember, just a few decades, when somehow, a single working adult could comfortably provide for a whole family? Why can't he, anymore? What has changed? We are more productive per worker, we have more workers participating in the economy, but somehow, you think we can't provide for everyone. In Thomas Piketty's Capital in the 21st Century , he argues that the period you're talking about is an anomaly historically…

How does he respond to the 1971 [1] argument? That whole page is alluding to the ending of the Bretton Woods system. Until 1971 the USD was directly convertible to gold at a fixed rate. This was supposed to prevent bad economic behavior because if we weakened the dollar too much (by e.g. 'printing' money), then people/countries could 'bankrupt' the US by converting all their USD to gold. Of course we [shockingly] did print too much money, defaulted on our obligations, and gave the rest of the world a 4 finger salute. A famous quote from Nixon's treasury secretary at the time: "The dollar is our currency, but it is your problem."

I find the consumer price index 1775-2012 quite interesting. It's really easy to see how nearly everything listed there could be directly, and very likely causally, linked to giving the US government the power to start printing tens of trillions of dollars. Because that money invariably makes it to the most well off in society, even on the rare instance when it starts somewhat lower. If not one has to come up with an alternative explanation for what happened at that time, because it's like in 1971 that were just a button pressed saying, "start destroying socioeconomic stability."

[1] - https://wtfhappenedin1971.com/

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

#338

Post by HWR_14 »

throwaway2037 wrote: post #330
HWR_14 wrote: post #128

Earlier quoted context omitted.

What CoCo bond write down? Or do you mean those special bonds bank issues that go to zero before any other assets during a run?

Thanks for asking. Yes, exactly right. To be clear, I needed to Google the exact meaning of CoCo bonds. It would better to say AT1 bonds. Google defines AT1/CoCo bonds as: AT1 bonds are contingent convertable (CoCo) bonds that are designed to functon as both debt and equity. More: https://www.investopedia.com/terms/c/contingentconvertible.a... BTW -- The writedown is incomplete. There are numerous court battles in nu…

Those poor fools got a premium rate for this to happen. Like, the entire point of AT1 bonds is this can happen. Other banks have AT1 bonds, and I think they have also been written down.

Far from the Swiss government pulling a bait and switch, the point of AT1 bond is to have privatized safety net like how it is being used.

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

#339

Post by somenameforme »

lotsofpulp wrote: post #182
vkou wrote: post #147

Earlier quoted context omitted.

> Systems of social security, healthcare, and the general economy will just collapse under that sort of pressure. Maybe we could buttress them by all the 4x to 10x productivity gains that automation has brought us. [1] Maybe we could cut back on all the useless, extraneous, low-to-negative ROI shit we're doing. We have options, here, that don't require a population ponzi scheme. (Also, you can't be blaming this situa…

Expectations of comfort are always changing. Humans are a competitive species. If the expectation for quality of life for the vast majority is living off of 1 income household, then that is an acceptable quality of life. If that expectation for the vast majority changes to quality of life by living off of 2 income households, then a quality of life from a 1 income household is no longer sufficient. Also, expectations…

This [1] page shows changes in real average household incomes from 1965 to 2020, broken down by quintile. Keep in mind the sharp increase in the number of necessities in modern life as well as things like healthcare, education, and housing inflating in price way beyond the rate of nominal inflation. Economically, many people certainly had significantly better lives in the past. Of course that would also have been a life generally without mass computing, the internet, and other such things. And I did say "many people", as it seems the bare median has probably moved up just enough that they're probably better off, but it's really uncomfortably close when one thinks how much we 'ought' have improved.

[1] - https://www.advisorperspectives.com/dshort/updates/2021/10/2...

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

#340

Post by geysersam »

f154hfds wrote: post #321
geysersam wrote: post #302

Earlier quoted context omitted.

Innocent in what sense? In China it's not always enough to not break a law to be innocent. You might also have to act in the spirit of the law (as interpreted by the CCP) to be sure to not become the target of the justice system. This is very different from the western system. But I think most people would agree that sometimes complete "rule of law" can also lead to perverse outcomes where very immoral business behav…

I think this misses half of the purpose of 'rule of law'. Some laws are to protect interest of citizens in the state and the state itself, sure, and in that sense the importance of 'spirit of the law' could be cultural. But the other aspect of law is minimizing surprise. Efficiency of commerce depends on a certain amount of consistency around laws. The more consistent the interpretation around a body of laws the more…

Minimizing surprise is definitely more efficient. However, preventing bad actors from abusing the system also makes for a more efficient system because it reduces incentives to do zero sum or even negative sum investments (such as causing harm to others to increase your own profit).
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