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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

#81

Post by onlyrealcuzzo »

brianwawok wrote: post #76
onlyrealcuzzo wrote: post #64

Earlier quoted context omitted.

> 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…

Your math just says the median person doesn’t buy a condo. If only the top 10% can afford them, that’s still a huge pool of people. Pretty sure median US income can’t afford a condo in NYC.

At the end of the day - prices need to be supported by incomes (buyers or renters) or magic beans.

Re: Real estate giant China Evergrande will be liquidated

#82

Post by yorwba »

berserk1010 wrote: post #66
NicoJuicy wrote: post #56

Earlier quoted context omitted.

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…

You would have to know mandarin (to read through government economic reports), and have access to Douyin videos. And these videos get taken down by the authorities fairly quickly

There's probably a dozen people reading this thread who know enough Mandarin to handle a few short Douyin videos if you could provide us with links.

Though as a platform it lends itself well to amplifying extreme claims backed by speculation that play into people's fears, so unless the accounts in question have a history of well-sourced factual reporting, I'd be rather skeptical.

Re: Real estate giant China Evergrande will be liquidated

#83

Post by r00fus »

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…

> 1.) Why did it take Evergrande 3 years to liquidate?

Because this isn't "the West". China/CCP is specifically unwinding this slowly to avoid cross-market contagion.

Re: Real estate giant China Evergrande will be liquidated

#84

Post by HWR_14 »

onlyrealcuzzo wrote: post #64
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…

> 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…

The foreigners probably loaned money to Evergrande a long time ago, before the issues started appearing.

Re: Real estate giant China Evergrande will be liquidated

#85

Post by timmytokyo »

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.

Tether is an unaudited black box, so no one really knows what their reserves are composed of. Tether's also been caught lying about their reserves numerous times [1], so it would be insane to think they're a credible store of value. Given their history and opaqueness, it's reasonable to assume shenanigans.

[1] https://www.dirtybubblemedia.com/p/examining-tethers-secret-...

Re: Real estate giant China Evergrande will be liquidated

#86

Post by onlyrealcuzzo »

HWR_14 wrote: post #84
onlyrealcuzzo wrote: post #64

Earlier quoted context omitted.

> 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…

The foreigners probably loaned money to Evergrande a long time ago, before the issues started appearing.

The issues were apparent since 2000.

The vast majority of Evergrande's outstanding foreign debt is from >2012.

BlackRock, HSBC, and UBS poured in about $3B of the $25B in 2021 alone...

And, I'm sorry - if you didn't see a risk doing that in 2021 - you're gonna lose all your money sooner or later.

In BlackRock's case - it was primarily for 401k-ers for exposure to Chinese bonds. I think the US should've made it illegal - and probably will soon - to offer a product like that.

Why anyone in the US would want exposure to Chinese bonds that don't even have good yields for "diversity" is incredible. Up next - Russian and Venezuelan 100-year bonds at 0% interest!

Re: Real estate giant China Evergrande will be liquidated

#87

Post by chasd00 »

datadrivenangel wrote: post #55
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.

my guess is the CCP will declare it a mild economic correction and anyone saying otherwise will be jailed.

Re: Real estate giant China Evergrande will be liquidated

#89

Post by seanmcdirmid »

dageshi wrote: post #74
seanmcdirmid wrote: post #35

Earlier quoted context omitted.

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).

Is there that much chinese debt owned by overseas investors? I'd always thought the chinese deliberately insulated their financial system as much as possible to avoid foreign influence over their economy.

Enough of it:

https://www.reuters.com/business/china-evergrande-offshore-b...

About $2b worth out of $300b of debt, so not that much, although I'm not sure if this is just one group of many.

Re: Real estate giant China Evergrande will be liquidated

#90

Post by HWR_14 »

dheera wrote: post #29
HPsquared wrote: post #26

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.

Why would the USDT tell anyone if they were no longer backed 1:1?
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