61–70 of 364 posts
Earlier quoted context omitted.
Ooh! I got this one. They do not.
The bigger question is if China is going to prioritize local debt holders over overseas debt holder (everyone should take a massive haircut though), and what happens to the apartments they've sold but not built yet (since Chinese banks have lent money to people to buy those).
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.
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.
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…
I'm sorry - but any foreigner who lent Evergrande money thinking this wasn't a huge risk is a moron.
> This will accelerate the real estate price decline in all parts of China, on top of the 30-40% drop we're seeing in Tier 1 cities, on top of the 50-60% drop we're seeing in non-Tier 1 cities.
According to "official" sources - property prices aren't even down 5%. Where are you seeing that they're down 30-40% in Tier 1 cities?
It would take the median couple >7 years saving 100% of post-tax income to afford a downpayment on the median 100 m^2 condo. If you assume even 3% interest - thereafter - the monthly payment would be >80% of their COMBINED post-tax income.
China's property prices have astounded me since 2000 - and yet they continued to rocket higher for a solid two decades.
People are NUTS in the US at Price to Income levels of 4:1 - when this is some of the lowest Price to Income for housing in the world. We consider places like Vancouver and London and Sydney ludicrous bubbles - and yet they are usually below 10:1. China was at 11:1 in 2000 and climbed to 17:1 by 2020: https://lipperalpha.refinitiv.com/2020/06/chart-of-the-week-... Places like Shanghai have ratios of 38:1 and higher.
Great news. Hopefully this causes bitcoin and crypto to crash all the way below $10,000.
However, it is possible that they have spent the last two years rotating out of Chinese bonds into T-bills. In fact, it's pretty likely that they have tried to do that; the question is how well they've been able to.
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 t…
Great news. Hopefully this causes bitcoin and crypto to crash all the way below $10,000.
I think if it had happened two years ago, this would have been the result, because at that time Tether was mostly in Chinese bonds (rumor has it), and Tether supported a large part of total bitcoin trade volume. However, it is possible that they have spent the last two years rotating out of Chinese bonds into T-bills. In fact, it's pretty likely that they have tried to do that; the question is how well they've been a…
Earlier quoted context omitted.
Wait until buyers stop making mortgage payments on half completed units.
My impression was this had already started a while back.
> ANZ’s senior China economist Betty Wang believes the scale of the problem is much bigger. She estimates that 1.5 trillion yuan ($223 billion) of mortgage loans, or 4% of banks’ total outstanding mortgage loans, could be affected by the movement.
> “What concerns us is if more home buyers cease payment, the spreading trend will not only threaten the health of the financial system but also create social issues amid the current economic downturn,” she wrote in a report on Thursday.
https://www.cnn.com/2022/07/14/economy/china-property-crisis... (2022)
Earlier quoted context omitted.
Ooh! I got this one. They do not.
I wonder what the approximate shortfall is.