71–80 of 364 posts
Earlier quoted context omitted.
I wonder what the approximate shortfall is.
300B of debt is the common number. shortfall unclear.
Earlier quoted context omitted.
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...
> Hong Kong and the mainland city of Shenzhen — where Evergrande is based — have a mutual insolvency recognition agreement, but it’s “effectively inoperative”
But China basically ignores HK in this.
This is only the Hong Kong business. Which is why it hasn't had the impact you would expect.
What is the expected impact? And for whom?
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).
Earlier quoted context omitted.
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...
Interesting. It's unclear how you liquidate the parent company without liquidating subsidiaries (who is going to buy Hengda RE?) and it seems like legally the HK decision should be binding: > Hong Kong and the mainland city of Shenzhen — where Evergrande is based — have a mutual insolvency recognition agreement, but it’s “effectively inoperative” But China basically ignores HK in this.
Evergrande has been ordered to liquidate, on paper this means that the Chinese subsidiary Hengda must also liquidate, but China's just... not going to liquidate Hengda? So instead of Evergrande's creditors dividing up Evergrande+Hengda's assets only Evergrande's assets are going to be liquidated? If that's right, how does that work? Does Hengda get bought and the purchase price distributed to creditors? Does China just tell Evergrande's creditors "too bad"?
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…
> This bodes very ill for creditors. Foreign creditors account only for $25B of the $300B liabilities for Evergrande. 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. Accordi…
Pretty sure median US income can’t afford a condo in NYC.
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…
> This bodes very ill for creditors. Foreign creditors account only for $25B of the $300B liabilities for Evergrande. 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. Accordi…
https://medium.com/alpha-beta-blog/even-beijing-home-prices-...
https://fortune.com/2023/08/17/china-home-sales-worse-than-o...
https://sccei.fsi.stanford.edu/china-briefs/tier-3-cities-ho...
My sources are from real estate agents in China.
Not sure why anyone would actually trust official numbers from China. China still claimed 5% gdp growth last year. pretty laughable.
Also, you can just watch what multinationals are doing. They have retail numbers from their Chinese stores. And it's pretty clear Japanese and Taiwanese and South Korean and American and European multinationals are all withdrawing.
Earlier quoted context omitted.
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...
Interesting. It's unclear how you liquidate the parent company without liquidating subsidiaries (who is going to buy Hengda RE?) and it seems like legally the HK decision should be binding: > Hong Kong and the mainland city of Shenzhen — where Evergrande is based — have a mutual insolvency recognition agreement, but it’s “effectively inoperative” But China basically ignores HK in this.
It's in no way a given that a subsidiary is insolvent just because the parent is.
This isn't unusual. E.g. when Commodore went bankrupt several subsidiaries continued to operate as long as they had stock, and the UK subsidiary even tried to organize a buyout of its parent.
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 i…
Though it's kinda funny to imagine the Dutch held onto NYC until the 1990s after which there was some sort of unification process.