Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Evergrande teeters on edge of default as $148M payment falls due

reuters.com

Post reply on HN
Print view View original

101–110 of 408 posts

Re: Evergrande teeters on edge of default as $148M payment falls due

#101

Post by whimsicalism »

gpm wrote: post #62
xxpor wrote: post #44

Earlier quoted context omitted.

A) What do you propose the US do? B) Why should the US do anything? If your risk profile when dealing with Chinese companies doesn't include the risk that the CPC will change the rules of the game later to benefit the domestic economy, you're a sucker.

A) I'd suggest that there are a wide variety of options here, reciprocal actions are common in diplomacy, so for instance the US could default on an equal amount of US debt that China holds, or perhaps pass a law that in the case of the bankruptcy of US companies bonds owned by Chinese nationals at any time after the proposal of said law (to avoiding them just selling them) are void. Of course these options (and prob…

The United States government defaulting on any amount of its debt would be really really really stupid policy.

> Because transfer of wealth from US investors to China harms US interests, the US government exists to serve US interests and part of that is standing up for their nationals in international trade.

I am not convinced apriori that this is the case, and don't feel comfortable having politicians who definitely have no clue whether that is the case making the calls.

Re: Evergrande teeters on edge of default as $148M payment falls due

#102

Post by Swizec »

qnsi wrote: post #47

This is not even frontpage of ft, bloomberg etc. Bloomberg Europe TV station talks about Johnson & Johnson factory problems in China but not Evergrande. My reading from above pieces of information: it's not that important yet. Maybe they will pay late again as they did previously when they were late one day.

For what it's worth, the Economist has been showing this in their daily "5 most important stories today" section of the app for the past month or two. Comes up at least once a week.

Maybe the typical Economist readership cares more about this. I for one did not quite grok the importance or the implications, but it's been interesting to hear about.

Re: Evergrande teeters on edge of default as $148M payment falls due

#103

Post by pezzana »

> Shares of developer Fantasia Holdings (1777.HK) plunged 50% on Wednesday after it said there was no guarantee it would be able to meet its other financial obligations following a missed payment of $205.7 million due on Oct. 4.

Watch the US bond market closely. Today saw a sharp selloff on the 10-year maturity, a favorite "asset" of foreign governments and companies. When those organizations get into trouble, they sell treasuries to raise cash. "Trouble" often comes in the form of dollar-denominated debt which must be serviced in dollars.

As the dollar rises, borrowers of dollar-denominated debt must raise more local currency to buy the dollars to service their loans. That puts further upward pressure on the dollar, distressing foreign usd-debtholders even more. It's called a "short squeeze":

https://www.lynalden.com/global-dollar-short-squeeze/

The entire world (including the US federal government) has taken a short position on the US dollar by assuming obligations requiring them to pay later in dollars. Ask any Ape on WallStreetBets what happens to shorts during a short squeeze, and you'll get the same answer: they get rekt.

The dollar spiked past a key technical level today.

https://www.tradingview.com/chart/?symbol=DXY

In 2020, a similar dynamic took hold, with stocks, bonds, and gold falling in price as the dollar surged. We may not be there yet, but the scramble for dollars in China (and possibly all of Asia) is just starting.

Re: Evergrande teeters on edge of default as $148M payment falls due

#104

Post by rapsey »

DebtDeflation wrote: post #84

Speaking of misleading headlines: https://www.nytimes.com/2021/11/10/business/evergrande-bond-... https://archive.md/cPsjv "China Evergrande meets a Wednesday payment deadline for two of its bonds." On multiple levels, too. "It was not immediately clear whether it had made payment on the third bond, which matures in 2024, or if all of the investors in the other two bonds had received payment." So basically they MIGHT…

No they are not afraid of China. They are afraid of people panicking in the US/EU.

Re: Evergrande teeters on edge of default as $148M payment falls due

#106

Post by mschuster91 »

shmatt wrote: post #72
_xnmw wrote: post #65

Earlier quoted context omitted.

A) Fight back by limiting Chinese expansion with US financial influence. Sanctions, etc. B) The US should do something, because if they don't, China will continue to take advantage of US ineptness. States have powers which investors simply don't have.

US government ineptness? Or US citizen ineptness. It's not the government buying this debt Now what, the government stops people from trying to make a quick buck on a high risk investments? We can start from stopping Americans from paying 7 figures for digital drawings of monkeys

> We can start from stopping Americans from paying 7 figures for digital drawings of monkeys

NFTs are even more moronic than that: they are nothing more than links to external content - Tweets, images, videos, whatever. Meaning that everyone who wants to see and reproduce the content you paid a million dollars for only has to download and dump the corresponding blockchain... and also meaning that you are the proud owner of a bit of nothing when the external hosting service goes down.

If you ask me, NFTs are a combination of tulip mania, scams and good old-fashioned money laundering using art.

Re: Evergrande teeters on edge of default as $148M payment falls due

#107

Post by DebtDeflation »

DebtDeflation wrote: post #84

Speaking of misleading headlines: https://www.nytimes.com/2021/11/10/business/evergrande-bond-... https://archive.md/cPsjv "China Evergrande meets a Wednesday payment deadline for two of its bonds." On multiple levels, too. "It was not immediately clear whether it had made payment on the third bond, which matures in 2024, or if all of the investors in the other two bonds had received payment." So basically they MIGHT…

Apologies for responding to my own post, but if you do a Google news search for Evergrande the first link that pops up is:

https://www.forexlive.com/news/!/evergrande-met-todays-bond-...

The title on Google News is "Evergrande Met Today's Bond Payment Deadline" but if you click to the article the headline changes to "Evergrande met at least part of today's bond payment deadline".

What is going on here?

Re: Evergrande teeters on edge of default as $148M payment falls due

#108

Post by whimsicalism »

JumpCrisscross wrote: post #92
boringg wrote: post #79

Earlier quoted context omitted.

In the long run China has a lot of power here. This might be a correction in how they set up their economy but I don't think anyone doubts that China is an economic superpower. The thing is investing in China a foreigner is a complete dice roll where you have no real power and no visibility into what you are investing in.

> I don't think anyone doubts that China is an economic superpower They are, but the foundation is rickety. Xi is a dictator. That increases the odds of catastrophic failure. Were an economic collapse to become protracted, it's not hard to imagine separatist movements and competing power sectors turning to violence as a political tool.

People have been talking about the "rickety foundation" of China for decades. I'm sure when they have an economic downturn sometime in the next two decades, those people will all come out to crow about how they had been right all along.

To me, they seem to be building on top of a more modern infrastructure base and do not have the super-prevalent NIMBY problems that exist in the West.

Re: Evergrande teeters on edge of default as $148M payment falls due

#110

Post by csours »

DebtDeflation wrote: post #84

Speaking of misleading headlines: https://www.nytimes.com/2021/11/10/business/evergrande-bond-... https://archive.md/cPsjv "China Evergrande meets a Wednesday payment deadline for two of its bonds." On multiple levels, too. "It was not immediately clear whether it had made payment on the third bond, which matures in 2024, or if all of the investors in the other two bonds had received payment." So basically they MIGHT…

To some extent, markets follow Looney Tunes logic - if you don't look down you aren't falling yet.
Post reply on HN