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Real estate giant China Evergrande will be liquidated

nytimes.com

21–30 of 364 posts

Re: Real estate giant China Evergrande will be liquidated

#21
post #4

I hope this event has limited international implications, but I'm afraid it may be a mess.

I remember reading a couple of analyses that suggested they were shifting a lot of the debt out of China, on to international investors, so thay'd be taking the hit. I guess they completed that process.

Edit: should have read the piece - it seems this is exactly what they did - dangled (or at least, failed to deny) the prospect a government bailout, to offload the debt to international speculators.

Re: Real estate giant China Evergrande will be liquidated

#22
post #4

I hope this event has limited international implications, but I'm afraid it may be a mess.

I remember reading a couple of analyses that suggested they were shifting a lot of the debt out of China, on to international investors, so thay'd be taking the hit. I guess they completed that process. Edit: should have read the piece - it seems this is exactly what they did - dangled (or at least, failed to deny) the prospect a government bailout, to offload the debt to international speculators.

Ooof you would have to be a massive fool to take on the debt hoping the Chinese government would pay you, a foreign debt holder, back.

Re: Real estate giant China Evergrande will be liquidated

#23

Earlier quoted context omitted.

Many of them aren't second homes. The ones in the ghost cities sure, but Evergrande has (had?) more legit projects that were designed as actual housing. In any case, given that the mainland stock market is pretty much known as a sham, real estate has been the only investment option for much of the middle class. Investors "eating" their losses basically means huge widespread social upheaval in China. Imagine everyone…

There is much about China that I don't understand, but I'm curious about the ownership in the "ghost cities". Given the ability of the CCP to significantly control major industries and movement of people, is it not possible that someone might buy an apartment in a "ghost city" while living in a rural area or renting in another city, expecting that people and jobs would flow to the city once it was completed? Basicall…

>Given the ability of the CCP to significantly control major industries and movement of people, is it not possible that someone might buy an apartment in a "ghost city" while living in a rural area or renting in another city, expecting that people and jobs would flow to the city once it was completed?

Seems like it?

https://en.wikipedia.org/wiki/Under-occupied_developments_in...

>Many developments initially criticized as ghost cities did materialize into economically vibrant areas when given enough time to develop, such as Pudong, Zhujiang New Town, Zhengdong New Area, Tianducheng and malls such as the Golden Resources Mall and South China Mall.[15] While many developments failed to live up to initial lofty promises, most of them eventually became occupied when given enough time.[6][16]

>Reporting in 2018, Shepard noted that "Today, China’s so-called ghost cities that were so prevalently showcased in 2013 and 2014 are no longer global intrigues. They have filled up to the point of being functioning, normal cities".[17]

>Writing in 2023, academic and former UK diplomat Kerry Brown described the idea of Chinese ghost cities as a bandwagon popular in the 2010s which was shown to be a myth.[18]: 151-152

Re: Real estate giant China Evergrande will be liquidated

#24
post #23

Earlier quoted context omitted.

There is much about China that I don't understand, but I'm curious about the ownership in the "ghost cities". Given the ability of the CCP to significantly control major industries and movement of people, is it not possible that someone might buy an apartment in a "ghost city" while living in a rural area or renting in another city, expecting that people and jobs would flow to the city once it was completed? Basicall…

>Given the ability of the CCP to significantly control major industries and movement of people, is it not possible that someone might buy an apartment in a "ghost city" while living in a rural area or renting in another city, expecting that people and jobs would flow to the city once it was completed? Seems like it? https://en.wikipedia.org/wiki/Under-occupied_developments_in... >Many developments initially criticize…

Kangbashi is never filling up like they planned, simply because coal is no longer booming like it once was. You can only do so much when the trend you were hoping for doesn’t pan out. It’s a district designed for a few million holding up at 50k or so.

Tianjin will always have a few ghost districts and skyscrapers. They eventually fill up after a decade or two or are razed for something else. It was like that when I first visited China in 1999 as well.

Re: Real estate giant China Evergrande will be liquidated

#29

Great news. Hopefully this causes bitcoin and crypto to crash all the way below $10,000.

What's the mechanism?

It was suspected that a lot of USDT is backed by Evergrande notes, though they have denied it. Evergrande liquidation may cause a USDT liquidation and cause USDT to lose peg. There are often idiots that will drag the rest of crypto including bitcoin with it, though.

Re: Real estate giant China Evergrande will be liquidated

#30
post #29

Earlier quoted context omitted.

What's the mechanism?

It was suspected that a lot of USDT is backed by Evergrande notes, though they have denied it. Evergrande liquidation may cause a USDT liquidation and cause USDT to lose peg. There are often idiots that will drag the rest of crypto including bitcoin with it, though.

5% on $100B can patch one hell of a balance sheet hole.
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