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Evergrande shares plunge as much as 87% as trading resumes after 17 months

cnbc.com

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Re: Evergrande shares plunge as much as 87% as trading resumes after 17 months

#31

Post by rnk »

irjustin wrote: post #11
jldugger wrote: post #10

Earlier quoted context omitted.

In what sense was the Evergrande situation caused by geopolitics? I was under the impression causes and effects were wholly domestic.

This post screams agenda. What is "warning shot"? They shot themselves in the foot with a property bubble to anger the US!!?? I'd move on.

The US didn't have anything to do with evergrande afaik, and paying for property before it's built is a bad idea. But China can still try to deal with this by blaming the US for all ills and pushing for war with Taiwan to distract everyone - that works almost every time!

Re: Evergrande shares plunge as much as 87% as trading resumes after 17 months

#32

Post by xwdv »

irjustin wrote: post #7
xwdv wrote: post #4

Feels bad for the people paying mortgages for homes they’ll never get to see. They can’t just stop paying either. Doesn’t work that way.

Government needs to step in and investors need to write it as a total loss. Making people pay could collapse the entire economy.

No, investors cannot just write it off as a total loss.

Hard as it may be, it will be better to just burn an entire generation rather than draw the final curtain on the People’s Republic of China and possibly the world economy as we know it.

Re: Evergrande shares plunge as much as 87% as trading resumes after 17 months

#34

Post by throwawaymaths »

gonzo41 wrote: post #29
Mengkudulangsat wrote: post #16

Earlier quoted context omitted.

They are doing mortgage boycotts in China as a form of collective action. Very interesting to see how that plays out. [1] https://www.reuters.com/world/china/chinas-mortgage-boycott-...

In theory, being a socialist utopia, everyone should just get their house because of market failure which is outside of their control. (which is kind of what I think should have happened during the GFC, bank failure in your favour so to speak) But lets see how the utopia holds up to reality. Yay, we're living in interesting times.

In places those homes don't exist(https://www.reuters.com/world/china/unfinished-evergrande-ap...), or are of shoddy construction. Some have been torn down (https://www.cnn.com/2022/01/04/investing/evergrande-stock-ga...).

For many of those owners the house is not intended to be lived in but rather an investment vehicle. Somewhere i read that a majority of home owning families (sometimes extended families) in China have more than one home -- don't know if that's true.

Re: Evergrande shares plunge as much as 87% as trading resumes after 17 months

#35

Post by hojinkoh »

xwdv wrote: post #4

Feels bad for the people paying mortgages for homes they’ll never get to see. They can’t just stop paying either. Doesn’t work that way.

In the city I'm aspiring to buy a house (a.k.a. somewhere near Tokyo), you only need to put the down payment if the construction hasn't finished yet. There will be no mortgage until after the house is ready.

I kind of think this may be a slightly better model in terms of homebuyer protection... (May not sound good for the developer though)

Re: Evergrande shares plunge as much as 87% as trading resumes after 17 months

#36

Post by FooBarWidget »

rnk wrote: post #31
irjustin wrote: post #11

Earlier quoted context omitted.

This post screams agenda. What is "warning shot"? They shot themselves in the foot with a property bubble to anger the US!!?? I'd move on.

The US didn't have anything to do with evergrande afaik, and paying for property before it's built is a bad idea. But China can still try to deal with this by blaming the US for all ills and pushing for war with Taiwan to distract everyone - that works almost every time!

Okay so where is all the media blaming the economic issues on US? I sure haven't seen any on TV.

Re: Evergrande shares plunge as much as 87% as trading resumes after 17 months

#37

Post by jldugger »

ralph84 wrote: post #27
starfallg wrote: post #19

Earlier quoted context omitted.

The treatment of stakeholders have been different inside and outside of China. The assumption based on the experience so far is that inevitably overseas investors, such as US based entities, will lose out more. Chinese firms have been raising money in overseas markets and has been exporting risk in this way, the issue is how China's government will handle this against the opaque corporate structure behind these finan…

> inevitably overseas investors, such as US based entities, will lose out more As they should. US-based entities speculating in China thinking the CCP had their back falls squarely into play stupid games, win stupid prizes.

Well, caveat emptor but you can't exactly dunk on capital inflows consequence free.

Re: Evergrande shares plunge as much as 87% as trading resumes after 17 months

#38

Post by Leary »

NotYourLawyer wrote: post #30

Why isn’t it down 100%? According to the article, they’re in bankruptcy with way more liabilities than assets. Presumably the shareholders are getting wiped out.

Occasionally the equity holders get some value during the restructuring process.

Re: Evergrande shares plunge as much as 87% as trading resumes after 17 months

#39

Post by Animats »

NotYourLawyer wrote: post #30

Why isn’t it down 100%? According to the article, they’re in bankruptcy with way more liabilities than assets. Presumably the shareholders are getting wiped out.

Because it already crashed before the trading halt. It's down over 98% from peak.

Re: Evergrande shares plunge as much as 87% as trading resumes after 17 months

#40

Post by vkou »

jldugger wrote: post #37
ralph84 wrote: post #27

Earlier quoted context omitted.

> inevitably overseas investors, such as US based entities, will lose out more As they should. US-based entities speculating in China thinking the CCP had their back falls squarely into play stupid games, win stupid prizes.

Well, caveat emptor but you can't exactly dunk on capital inflows consequence free.

A truly developing nation can't, the economic powerhouse of the 21st century has a lot more latitude in this respect. As long as not every single investment in it goes tits up, there won't be any shortage of dumb FOMO money chasing growth.

(Look at the mountains of money piled into straight-up obvious crypto scams, at least China is full of real companies that are doing real business[1], even if sometimes that business goes to shit.)

[1] Like making all the things the world uses. And serving half a billion people living middle-class lifestyles.

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