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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

#131

Post by miohtama »

colechristensen wrote: post #104
i_am_jl wrote: post #75

Earlier quoted context omitted.

I'm very naive about all of this, can I ask what this means? 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 a…

From CNN: >the implications for the company’s vast business in mainland China are unclear. >Hong Kong and the mainland city of Shenzhen — where Evergrande is based — have a mutual insolvency recognition agreement, but it’s “effectively inoperative” and courts in the city are “extremely unlikely” to recognize the offshore liquidator, Silvers said. What we have here is a complex set of semi-international legal issues o…

China is not a rule of law country. It really does not matter what laws or treaties say, as Xi can just snap fingers and the law will be different.

Re: Real estate giant China Evergrande will be liquidated

#132

Post by thriftwy »

miohtama wrote: post #130
chasd00 wrote: post #94

Earlier quoted context omitted.

> Does China just tell Evergrande's creditors "too bad"? that sounds inline with standard operating procedures.

It also means that foreign direct investments to China will dry up. However they’d likely dry up any case due to US vs. China trade war.

That's the US, when they see money to be made in next quarter they go for it regardless. Not going to dry up.

Re: Real estate giant China Evergrande will be liquidated

#133

Post by thriftwy »

toomuchtodo wrote: post #51
NicoJuicy wrote: post #50

Earlier quoted context omitted.

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...

I'm not sure why won't the old ones buy units for the young ones. Hey, they can even pool!

Re: Real estate giant China Evergrande will be liquidated

#134

Post by Animats »

colechristensen wrote: post #104
i_am_jl wrote: post #75

Earlier quoted context omitted.

I'm very naive about all of this, can I ask what this means? 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 a…

From CNN: >the implications for the company’s vast business in mainland China are unclear. >Hong Kong and the mainland city of Shenzhen — where Evergrande is based — have a mutual insolvency recognition agreement, but it’s “effectively inoperative” and courts in the city are “extremely unlikely” to recognize the offshore liquidator, Silvers said. What we have here is a complex set of semi-international legal issues o…

South China Morning Post is trying to figure it out.[1] "A Hong Kong court on January 29 ordered the liquidation of China’s property giant Evergrande, but the firm said it would continue to operate in a case that has become a symbol of the nation’s deepening economic woes." "Given that most of the company’s assets are onshore, we do not think that offshore bondholders would receive substantial recovery proceeds from the liquidation. In addition, it is unclear whether the Hong Kong court’s liquidation order could be enforced onshore; there has been some mutual recognition of bankruptcy proceedings between Hong Kong and mainland courts, but the enforcement is difficult in practice." Reads like their reporter called up the usual suspects for comments.

There's nothing at all about Evergrande in China Daily, which means there's no official position yet.

[1] https://www.scmp.com/business/china-business/article/3250215...

Re: Real estate giant China Evergrande will be liquidated

#135

Post by thriftwy »

onlyrealcuzzo wrote: post #86
HWR_14 wrote: post #84

Earlier quoted context omitted.

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 illega…

What's wrong with Russian bonds? That land is unlikely to be going away, may contain even more mineral wealth and is climate change resistant.

Re: Real estate giant China Evergrande will be liquidated

#137

Post by 10u152 »

Kon-Peki wrote: post #127
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.

> Who wants to buy a half-finished building abandoned during construction This is actually not a big deal at all if you are following modern high-rise construction techniques.

The problem is can you trust the structure/QA process, is the documentation in place etc. Otherwise it’s a liability nightmare

Re: Real estate giant China Evergrande will be liquidated

#138

Post by loeg »

littlestymaar wrote: post #129
loeg wrote: post #45

Earlier quoted context omitted.

De-pegged is just any value less than $1. If USDT is 50% collateralized, maybe it is worth $0.50, which is de-pegged but not worthless.

De-pegged (I means really de-pegged, not a transient .97c a dollar on exchanges like it happened) means it's not fulfilling its promise, hence the trust is lost. Also, Tether would try to save face, by honoring USDT redemption at 1$ as long as they can, which drains their reserves. So if they aren't able to do it anymore, it means that they don't have anything left, and USDT is now worthless. These things are highly…

Sure. People disinclined to trust Tether's word are already out of USDT. Clearly, a lot remain. Some of those people might attempt to profit from arbitraging a de-pegged Tether (maybe at $0.97 rather than $0.50 but it's the same principle).

Re: Real estate giant China Evergrande will be liquidated

#139

Post by loeg »

miohtama wrote: post #130
chasd00 wrote: post #94

Earlier quoted context omitted.

> Does China just tell Evergrande's creditors "too bad"? that sounds inline with standard operating procedures.

It also means that foreign direct investments to China will dry up. However they’d likely dry up any case due to US vs. China trade war.

A little bit, maybe, but probably not entirely. The joke is that debt investors have no memory. For example, Argentina has defaulted many times in recent memory but was still able to market a 100-year bond in 2017 (which it has already defaulted on).

Re: Real estate giant China Evergrande will be liquidated

#140

Post by berserk1010 »

lucubratory wrote: post #136
berserk1010 wrote: post #114

Earlier quoted context omitted.

What can I say, all I know about/care about is Chinese economy. I do provide a lot of valuable facts/links to the site

You provided a link to a Medium post.

Author is a data scientist pretty fluent in Chinese matters. You take what you can get out of censored dictatorship like China.
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