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

reuters.com

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

#121

Post by yaacov »

pezzana wrote: post #103

> 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 s…

Are you predicting large scale deflation? That’s the opposite of what we’re seeing now, but if it happens the fed can fix it by just printing money.

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

#122

Post by adventured »

baybal2 wrote: post #91
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…

> Is the financial press just afraid of upsetting China here? BlackRock is the biggest foreign owner of Evergrande bonds. Next there are Vanguard, and a few other equally big Western funds. https://www.reuters.com/business/finance/blackrock-hsbc-amon...

Where does the article say that?

It says: "BlackRock, HSBC among largest buyers of Evergrande debt"

Those are relatively recent purchases and they were tiny re BlackRock -

"BlackRock added 31.3 million notes of Evergrande's debt between January and August 2021, pushing its stake in the company to 1% of the assets in its $1.7 billion Asian High Yield Bond Fund, according to Morningstar."

1% of $1.7 billion, or $17 million.

That's equal to 1/100th of 1% of BlackRock's assets. And they've got $9+ trillion under management.

BlackRock has taken a hit on their equity in Evergrande, which is already largely toast:

"The data also shows that BlackRock, the world’s largest asset manager, has suffered a $95.3m book loss on its Evergrande holding, which at the start of the year stood at just over $111m."

https://www.fnlondon.com/articles/blackrock-vanguard-shareho...

The Financial Times in late September estimated BlackRock's total exposure to Evergrande at $400 million. At their scale they can take a $250-$400 million loss and shrug it off. Evergrande represents a several hundred billion dollar problem for China domestically, and that's before you get to the cascade risk for their property market (which represents 65-70% of all household assets in China).

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

#123

Post by kevingadd »

zaptrem wrote: post #100
spamizbad wrote: post #85

Earlier quoted context omitted.

A bunch of greedy US investors dumped money into quixotic Chinese companies and we should bail them out? Sounds politically toxic to me.

If a large group of innocent US citizens that ventured to China for tourism reasons were shot down by CCP police would you say the government should stay out of it, instead blaming them for trusting China?

Handing money to a foreign business because you see dollar signs that aren't there is not remotely comparable to getting killed by a police officer.

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

#124

Post by throwaway09223 »

rwmj wrote: post #111
pezzana wrote: post #103

> 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 s…

Is your theory that the US government will run out of dollars? How do you imagine that will happen - a paper shortage?

Paper money makes up only about 10% of the total money supply. The vast majority of USD is just represented by data in a ledger.

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

#125

Post by guiriduro »

throwaway09223 wrote: post #124
rwmj wrote: post #111

Earlier quoted context omitted.

Is your theory that the US government will run out of dollars? How do you imagine that will happen - a paper shortage?

Paper money makes up only about 10% of the total money supply. The vast majority of USD is just represented by data in a ledger.

Which is an order of magnitude easier to come by, proving OP's point.

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

#126

Post by paulpauper »

soperj wrote: post #93
paulpauper wrote: post #78

Any top 10 billionaire could write them a check for the amount owed without even breaking a sweat and thus stave off of billions of dollars of systemic damage. It goes to show how bailouts, despite being maligned by the public, do work.

They owe 300 billion. So no they couldn't.

This is doable by a large govt. $300 billion is 1/10 of covid aid and related stimulus. The point is that small, strategic payments can stave off much greater systemic damage, which is what a bailout does.

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

#127

Post by thereddaikon »

whimsicalism wrote: post #119
thereddaikon wrote: post #117

There has been talk for years about China's wild construction programs, creating entire cities that nobody lives in. It was obviously unsustainable. Could it be finally falling apart?

The follow up reporting (not widely circulated in the West) on this was that many of those cities have since been filled up and inhabited. https://asia.nikkei.com/Spotlight/Society/China-s-largest-gh... Wade Shepard, author of Ghost Cities of China: > Today, China’s so-called ghost cities that were so prevalently showcased in 2013 and 2014 (...) have filled up to the point of being functioning, normal cities I would…

Neither do you get one from China itself. Its hard to tell what is really going on when everyone has an agenda to warp reality.

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

#128

Post by boplicity »

pezzana wrote: post #103

> 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 s…

> The dollar spiked past a key technical level today.

I don't know much about "technical" forex trading, but I can say that USD/CNY didn't really change today, neither did USD/CAD, or USD/GBP. Everything is around where it's been over the past few weeks. Are you saying the real exchange rates will significantly change soon?

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

#129

Post by jen729w »

yaacov wrote: post #121
pezzana wrote: post #103

> 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 s…

Are you predicting large scale deflation? That’s the opposite of what we’re seeing now, but if it happens the fed can fix it by just printing money.

I’m far from an expert, but can the US Fed really print more money? Didn’t I hear that something like 30% of the USD in circulation today didn’t exist at the start of 2020?

It has to stop somewhere. Doesn’t it? (Genuine question!)

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

#130

Post by whatever1 »

pezzana wrote: post #103

> 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 s…

The US can keep issuing dollars for as long as they like. And you will buy these pieces of paper because they are backed by the US Military, the US Air Force and the US Navy.
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