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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

#241

Post by MiguelX413 »

ilikerashers wrote: post #237
EZ-E wrote: post #205

Earlier quoted context omitted.

> In the long term, the bursting of China's property bubble is probably good news, affordable housing is in the interest of everybody except property developers. I unironically think a property bubble pop is a great way to defeat the demographic slump in the long term. That and the recent crackdown/reforms on private education makes me think the party is aware that property bubbles and education costs are a liability

I wonder how much of the world's growth is squeezed by these kinds of inefficiencies. Property speculation keeps prices high, and people paying off mortgages in dead-end jobs. Education costs force parents into difficult decisions to move out of HCOL areas where they likely have higher-value jobs. Energy and Water costs spike while providing no societal benefit. The West is obsessed with keeping these in place, the r…

What does PE mean?

Re: Real estate giant China Evergrande will be liquidated

#242

Post by KaiserPro »

pmontra wrote: post #231
EZ-E wrote: post #205

Earlier quoted context omitted.

> In the long term, the bursting of China's property bubble is probably good news, affordable housing is in the interest of everybody except property developers. I unironically think a property bubble pop is a great way to defeat the demographic slump in the long term. That and the recent crackdown/reforms on private education makes me think the party is aware that property bubbles and education costs are a liability

The defaults changed, at least in the West. When I was little it was still married-with-children by default, probably at relatively young age, and people had to decide not to have children. That was in part helped by the lack of widespread use of contraceptives. The norm in my primary school was two or three kids per family. I remember only one classmate with no brothers or sisters. Of course zero children families w…

The "west" and china have _very_ different demographic pressures.

For example china famously had(has?) the one child rule. This meant a deliberate shift in how children were raised (all your eggs in one basket)

> Now the default is single-no-children and you have to make an explicit choice to marry (you used to be nudged into it by society) and to have kids, by stopping to use contraceptives and to do all the things that long time singles are used to do.

I suspect you probably want to look deeper into the causes of that more. Yes contraceptives have a role to play, but they are not automatic, they require a deliberate choice, sometimes daily (https://www.statista.com/statistics/573210/contraceptive-use... granted this is for the UK, and doesn't account for people not taking it. The point is that younger women are taking pills daily)

Why are people not having kids? the answers are more complex than you seem to be suggesting.

Re: Real estate giant China Evergrande will be liquidated

#243

Post by Kbelicius »

MiguelX413 wrote: post #241
ilikerashers wrote: post #237

Earlier quoted context omitted.

I wonder how much of the world's growth is squeezed by these kinds of inefficiencies. Property speculation keeps prices high, and people paying off mortgages in dead-end jobs. Education costs force parents into difficult decisions to move out of HCOL areas where they likely have higher-value jobs. Energy and Water costs spike while providing no societal benefit. The West is obsessed with keeping these in place, the r…

What does PE mean?

Probably Price-earning ratio (share price/earning per share)

Re: Real estate giant China Evergrande will be liquidated

#244

Post by KaiserPro »

i_am_jl wrote: post #75
loeg wrote: post #72

Earlier quoted context omitted.

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.

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…

Liquidate doesn't mean destroy, it means finding assets of value, dividing them up if that gets better value, and selling them to pay off as much debt as possible.

if Hengda is a going concern by it's self, then it might be sold off to a bunch of people to raise cash, or shares of it given to creditors to sell off them selves.

but then there is the concept of senior and junior debtors, and the like.

Re: Real estate giant China Evergrande will be liquidated

#245

Post by KaiserPro »

bArray wrote: post #239

> Months after China Evergrande ran out of cash and defaulted in 2021, investors around the world scooped up the property developer’s discounted I.O.U.’s, betting that the Chinese government would eventually step in to bail it out. One thing investors should always be clear about with the CCP - as a foreigner you will always be screwed over if it benefits the CCP. The CCP is extremely hostile, even having strained re…

> which should still be under partial UK control and therefore an attractive entry for foreign investment.

As a brit, much as my colonial arse would love this to be true, the lease expired and Britain never had any real control over HK post handover. The only power we had was economic, and we've well and truly fucked that. the UK of the 80/90s is not the UK of today. For better or worse.

Re: Real estate giant China Evergrande will be liquidated

#246

Post by SideQuark »

MiguelX413 wrote: post #241
ilikerashers wrote: post #237

Earlier quoted context omitted.

I wonder how much of the world's growth is squeezed by these kinds of inefficiencies. Property speculation keeps prices high, and people paying off mortgages in dead-end jobs. Education costs force parents into difficult decisions to move out of HCOL areas where they likely have higher-value jobs. Energy and Water costs spike while providing no societal benefit. The West is obsessed with keeping these in place, the r…

What does PE mean?

Private Equity

Re: Real estate giant China Evergrande will be liquidated

#247

Post by saiya-jin »

pmontra wrote: post #231
EZ-E wrote: post #205

Earlier quoted context omitted.

> In the long term, the bursting of China's property bubble is probably good news, affordable housing is in the interest of everybody except property developers. I unironically think a property bubble pop is a great way to defeat the demographic slump in the long term. That and the recent crackdown/reforms on private education makes me think the party is aware that property bubbles and education costs are a liability

The defaults changed, at least in the West. When I was little it was still married-with-children by default, probably at relatively young age, and people had to decide not to have children. That was in part helped by the lack of widespread use of contraceptives. The norm in my primary school was two or three kids per family. I remember only one classmate with no brothers or sisters. Of course zero children families w…

While I agree with that shrink part, you must be living in a bubble for the family part.

Literally all my colleagues in past 5 jobs (that few hundreds guys) have kids if they are over say 35. All colleagues of my wife. All of our friends. I cover western (Switzerland) and eastern Europe here. Same for Swiss colleagues and foreigners. Folks with nannies or family close but also raising their kids just by themselves, like us.

2 kids are standard, 3 are actually slowly becoming a norm. 1 is rare and more related to medical issues rather than an actual decision. From my own personal experience being raised as a single child, it sucks in many ways and will affect you negatively for rest of your life, regardless of all the love you received from parents (which of course helps but doesnt mitigate this).

Re: Real estate giant China Evergrande will be liquidated

#248

Post by saiya-jin »

bArray wrote: post #239

> Months after China Evergrande ran out of cash and defaulted in 2021, investors around the world scooped up the property developer’s discounted I.O.U.’s, betting that the Chinese government would eventually step in to bail it out. One thing investors should always be clear about with the CCP - as a foreigner you will always be screwed over if it benefits the CCP. The CCP is extremely hostile, even having strained re…

Neither China nor Russia are communist countries for very long time. Folks here with more experience can describe better than me what actual regime there is, to me it seems like some mixture of brutal capitalism and regulated markets, dictatorship of the elite, all drowning in corruption. What labels they put themselves on doesn't really matter, does it.

Re: Real estate giant China Evergrande will be liquidated

#249

Post by Anotheroneagain »

rightbyte wrote: post #240
Anotheroneagain wrote: post #238

Earlier quoted context omitted.

The problem gets deeper: This may sound insane, but I would argue that the productivity is way too high. There is too much stuff, which is too cheap, which makes it too hard to make money by actually producing anything. This it turn splits the economy into two groups: One that doesn't have money, live scrapping the bottom, and typically in debt. The other that does have money, with no good opportunities to invest, wh…

Ye the competition is too high in the base and the profit taken by middle men. However, I think covid changed that, where producers collectivly realized that if they just raise prices the middle men need to pay up. Being stuck in a sector that operates "efficiently" sucks. You want guilds, like lawyers and doctors, or inefficiency, like the financial sector.

No, not like that:

Evergrande is in the first group here, fruitlessly producing something of no real value, as there is too much of it.

The second group are those who invested in Evergrande itself, or the housing it built.

It sucks for everyone.

It sucks for Evergrande, as sooner or later it had to go bankrupt.

It sucks for those who invested in the housing, as it's clear that if they actually tried to sell or rent out the housing they would end up with some paltry sum.

It sucks for those who invested in Evergrande, as they're going to lose money.

It suck ls for those who can't afford a place to live because of the inflated prices.

I think there are really no winners here. No middlemen filling their pockets. It was a loss for everyone.

Re: Real estate giant China Evergrande will be liquidated

#250

Post by anon-sre-srm »

berserk1010 wrote: post #146
loeg wrote: post #139

Earlier quoted context omitted.

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).

miohtama is actually correct. Foreign investors have snatched back nearly 90% of the money they put into Chinese stocks this year (2023) https://markets.businessinsider.com/news/stocks/china-econom... Foreign investment in China turns negative for first time https://asia.nikkei.com/Economy/Foreign-investment-in-China-...

It's curious why any FDI happened, except small amounts of speculative investment. Property rights in China have always been highly precarious. It's a huge economy but the game is arbitrary and rigged.
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