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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

#161

Post by riggins »

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…

Name 1 example of a currency crisis where the debtor nation had debt denominated in their own currency.

I'll save you the time. There are no examples.

Every currency crisis has debt denominated in a foreign currency. - Germany in the 1930 (WW1 reparations were gold marks) - Argetina (foreign borrow and currency peg to USD). - Thailand. - Turkey (now, borrowed in Euro).

https://en.wikipedia.org/wiki/War_reparations "Germany agreed to pay reparations of 132 billion gold marks"

https://www.federalreservehistory.org/essays/asian-financial... "Heavy foreign borrowing, "

https://economics.rabobank.com/publications/2013/august/the-... "Argentina’s hard currency peg to the US Dollar, pro-cyclical fiscal policies and extensive foreign borrowing"

If you're going claim a coming currency crisis, test that assumption against the historical record at your earliest convenience.

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

#162

Post by rossdavidh »

dageshi wrote: post #18
bingohbangoh wrote: post #10

So is this still "the next Lehman brothers"? Or have we moved on to something else?

China doesn't have a convertible currency, it might cause turmoil in China but I don't see how it can effect the rest of the world much.

If Chinese billionaires have to start selling a lot of overseas real estate, equities, cryptocurrencies, etc. to pay off debts because the CCP put them in a small room with a terminal and said "pay off this debt or bad things happen to you", then it can absolutely affect the rest of the world.

Now, given how many things in the US are at terribly inflated prices, especially housing that people need to live in, maybe in the long run it's a good thing. But between here and there it could be quite turbulent.

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

#163

Post by draw_down »

dang wrote: post #28
polskibus wrote: post #3

original title is "Evergrande teeters on edge of default as $148 mln payment falls due". not exactly "defaults"

Yes - submitted title was "Evergrande defaults" and we've reverted it now. " Please use the original title, unless it is misleading or linkbait; don't editorialize. " https://news.ycombinator.com/newsguidelines.html

Assuming the original title is not editorialized seems a bit facetious. But whatever, rules are rules!

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

#164

Post by jacquesm »

ChuckMcM wrote: post #75
Specie33 wrote: post #26

Interesting about this is that Evergrande is defaulting only on foreign held debt. Not internal debt after a ccp mandate. If their economy continues its downturn then this precedent would hold for all debt. I would really watch personal funds and investments and insure they dont hold any chinese debt as an asset.

Mark Levine had some good thoughts on this situation, and it really does seem to encapsulate the entire Chinese "free market" experiment in a single entity. I hope that market regulators all around the planet are paying attention to the challenges of trying to "control" market movements in order to promote an agenda (whether it is protecting pension funds or national prestige). If you've got your "thumb on the scale"…

The same happened in reverse with the Euro and the Swiss Franc.

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

#165

Post by SilasX »

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…

And yet, a 1.56% yield for ten years (below its 18 month high) while inflation just hit 5.4%[0] doesn’t feel like a big selloff.

[0] or 6.2 or whatever depending on what version you use.

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

#166

Post by fny »

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…

I actually think NYT updated this headline too: I swear it said the opposite earlier today, but I can't find it on newdiffs.

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

#167

Post by beambot »

riggins wrote: post #161
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…

Name 1 example of a currency crisis where the debtor nation had debt denominated in their own currency. I'll save you the time. There are no examples. Every currency crisis has debt denominated in a foreign currency. - Germany in the 1930 (WW1 reparations were gold marks) - Argetina (foreign borrow and currency peg to USD). - Thailand. - Turkey (now, borrowed in Euro). https://en.wikipedia.org/wiki/War_reparations "G…

GP agrees with you: They're saying the currency crisis starting in Asia is USD-denominated (the international bonds in particular), which is creating a positive feedback loop when USD-RMB exchange rates spike. They're saying you might see this manifest as big movements in bond redemptions or sales as people scramble to secure USD.

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

#168

Post by itronitron »

bsanr2 wrote: post #60
WhisperingShiba wrote: post #36

Earlier quoted context omitted.

The economy is held up by belief, and while I'm sure there are some good intentioned people telling us this, there are certainly some people who are using this as an opportunity to change financial positions.

It's important to point out that DMSA's release alledges that media has been trading on rumors that Evergrande had made the earlier missed debt payments before the grace period ended, when in fact it it had not. Several commentators over the past few weeks have pointed out that all of the media reports saying that the payments had been made were circuitously cited; no one had heard from a creditor directly. Now we ha…

https://www.prnewswire.com/news-releases/evergrande-official...

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

#169

Post by tobltobs »

diveanon wrote: post #141

Who could have ever predicted this? Glad I’ve been building a solid crypto portfolio, looking forward to cashing in the last few years gains to buy some houses on the cheap again after the economy implodes.

Last time the economy imploded (March 2020) BTC also fall apart.

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

#170

Post by curuinor »

baybal2 wrote: post #140
adventured wrote: post #122

Earlier quoted context omitted.

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 mil…

Is it important, or the fact that a megafund like BlackRock makes completely hopeless C rated bonds from a very shady market 1% of their fund? 1% of a BlackRock fund is a megaton of money. Remember, LTCM went down after a few percent sell-off turning into an avalanche. And yes, this below is very appropriate. https://blackrockloveschina.com/

1.7 billion fund to blackrock is nothing to them, shove like 5-10 peeps to it, tops

also the vast majority of blackrock's holdings are unleveraged equity

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