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Real estate giant China Evergrande will be liquidated

nytimes.com

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Re: Real estate giant China Evergrande will be liquidated

#51

Post by toomuchtodo »

NicoJuicy wrote: post #50
toomuchtodo wrote: post #46

Earlier quoted context omitted.

Wait until buyers stop making mortgage payments on half completed units.

And the reserve requirements of banks were just lowered to help spur growth: https://www.reuters.com/world/china/china-will-cut-banks-res...

Pushing the string! Can't win against demographics, young folks can't find jobs [1] and China got old fast [2]. 30% of GDP is domestic real estate that is about to fall off a cliff [3].

[1] https://www.cnbc.com/2024/01/25/china-youth-unemployment-wil...

[2] https://en.wikipedia.org/wiki/Aging_of_China

[3] https://www.axios.com/2023/10/11/chart-chinas-real-estate-st...

Re: Real estate giant China Evergrande will be liquidated

#52

Post by kayodelycaon »

loeg wrote: post #41
threeseed wrote: post #37

This is only the Hong Kong business. Which is why it hasn't had the impact you would expect.

The Hong Kong business is the business.

CNN has quotes to the contrary. Most of their Chinese assets are owned by Hengda Real Estate Group, which is legally independent.

https://www.cnn.com/2024/01/29/business/evergrande-ordered-t...

Re: Real estate giant China Evergrande will be liquidated

#53

Post by datadrivenangel »

spywaregorilla wrote: post #27

Long time comin. Sounds like its only going to hit the non-china stuff though? How does that compare in terms of value? I would wager without much special insight that the bulk of their worst underwater assets are in china.

Contagion will be non-zero. World economy may not fall apart over this, but there will be some sympathy bubble bursting I think.

Re: Real estate giant China Evergrande will be liquidated

#54

Post by datadrivenangel »

rekttrader wrote: post #47
dheera wrote: post #29

Earlier quoted context omitted.

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.

USDT is the 25th largest holder of T-bills. This is a bit of bullshit fud.

If they only have 50% of the money they need, they're still missing half, even if that half is huge.

Re: Real estate giant China Evergrande will be liquidated

#55

Post by datadrivenangel »

berserk1010 wrote: post #49

A couple of things to note: 1.) Why did it take Evergrande 3 years to liquidate? In western countries, liquidation happens in a few months. One should note that Evergrande did not get that big by itself; obviously it had the support of CCP elites to secure huge bank loans. Therefore, when it went bankrupt, the delay was to allow these elites to pull money/liquidable assets out of Evergrande. Thus after 3 years, Everg…

It will be very interesting to see how the CCP navigates this coming recession.

Re: Real estate giant China Evergrande will be liquidated

#56

Post by NicoJuicy »

berserk1010 wrote: post #49

A couple of things to note: 1.) Why did it take Evergrande 3 years to liquidate? In western countries, liquidation happens in a few months. One should note that Evergrande did not get that big by itself; obviously it had the support of CCP elites to secure huge bank loans. Therefore, when it went bankrupt, the delay was to allow these elites to pull money/liquidable assets out of Evergrande. Thus after 3 years, Everg…

Some insights I didn't knew/consider, especially 2 and 3.

Can I ask the source of how you gained those insights?

Interesting to note: they have higher debt levels than the US ( GDP wise). If GDP would go down, that would mean a vicious circle and they wouldn't be able to "fund" their way out with low risk.

Which seems to indicate a lot of advantages to fiddle with the GDP growth numbers and explains limiting access to economic statistics: https://www.bloomberg.com/news/articles/2023-08-16/china-is-...

Re: Real estate giant China Evergrande will be liquidated

#57

Post by cko »

littlestymaar wrote: post #42
cko wrote: post #40

Earlier quoted context omitted.

If USDT can no longer be redeemed for USD, then people may buy BTC instead?

Why would someone accept your USDT and give you bitcoin if USDT is de-pegged and worthless?

Perhaps as the mass USD redemptions start to fail, there is a window of opportunity to buy BTC before exchanges put a stop to it.

Re: Real estate giant China Evergrande will be liquidated

#58

Post by The_Colonel »

threeseed wrote: post #37

This is only the Hong Kong business. Which is why it hasn't had the impact you would expect.

This reddit comment explains this quite well: https://old.reddit.com/r/Economics/comments/1adnx32/evergran...

> HK is sort of what NY is to the US. It is a peripheral region with some minor degree of autonomy but because it just so happens to house the Chinese version of Wall Street this means it’s judiciary is a little bit special when it comes to dealing with insolvency and other corporate issues.

This means that it very likely means liquidation in China as well.

Re: Real estate giant China Evergrande will be liquidated

#59

Post by rossdavidh »

toomuchtodo wrote: post #46
Animats wrote: post #43

That's going to be a tough liquidation. Who wants to buy a half-finished building abandoned during construction due to lack of a market? Such things have negative value.

Wait until buyers stop making mortgage payments on half completed units.

My impression was this had already started a while back.

Re: Real estate giant China Evergrande will be liquidated

#60

Post by loeg »

dheera wrote: post #48
loeg wrote: post #44

Earlier quoted context omitted.

Isn't the point of USDT that the vast majority of its holders are locked out of USD? They can liquidate to BTC but it is unclear that they can actually get USD out.

It would be nice if the market worked that way and every coin helped each other out as a "crypto team" to beat out fiat together, but the reality is BTC holders are probably going to be spooked and not give you much BTC for your USDT. And then everyone gets spooked of crypto as a whole and sells for fiat. Basically whenever "shit" happens all of crypto goes down.

I don't think this is responsive to my comment. You wrote:

> it's more likely people will get spooked of crypto and sell [USDT] for USD.

I don't think (the vast majority of) USDT holders can sell for USD fiat -- because they are locked out of the US financial system for one reason or another. That is, actually, the reason they are holding USDT instead. They can (try) to exit via BTC, and maybe they can cash out for some other fiat currency. Just not USD.

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