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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

#171

Post by ericmay »

JumpCrisscross wrote: post #23
bingohbangoh wrote: post #10

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

> is this still "the next Lehman brothers"? No, and it never was. With Lehman, the banks stopped lending to Lehman and then to everyone else. In China, Beijing can let Evergrande default while compelling lending to peripheral players. Thise players know this. The market knows this. That makes contagion risk de minimis . (For Western central banks, the analogous policy tool is “extraordinary measures,” i.e. committing…

Less a show of strength IMO and more of a using the fire extinguisher to put out a fire.

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

#172

Post by [deleted] »

rp1 wrote: post #42
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.

China has been waging economic warfare via equity markets for a while now. The U.S. hasn’t done anything to protect investors from billions in losses. Totally embarrassing.

[deleted]

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

#173

Post by kipchak »

xxpor wrote: post #158
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…

No comment on the content of the lynalden.com post (haven't read the entire thing yet), but for the love of pete, blog writers, please make sure you put a date on your posts. Especially when you're discussing something that involves current events.

I think she might just have forgotten to date this one? Most other articles back to 2020 seem to have publish dates. Either way this one seems to be from April 2020.

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

#174

Post by justicezyx »

rp1 wrote: post #77
uoaei wrote: post #53

Earlier quoted context omitted.

The government should do everything* to protect me, the citizen. *Except the things that make me confused and angry, even if they benefit other citizens. Welcome to neoliberal hell.

Neoliberalism is an economic policy, it has nothing to do with liberal politics.

It's naive to split economy and politics... Just like it's naive to split culture and engineering in a company.

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

#175

Post by riggins »

beambot wrote: post #167
riggins wrote: post #161

Earlier quoted context omitted.

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.

I assume you mean OP?

> The entire world (including the US federal government) has taken a short position on the US dollar

I read this as a prediction of some type of crisis.

Anyway, wrt the US Federal Government, having government debt is not that same as having a short position. For one, the US Fed govt's revenue (i.e. tax collection) is denominated in the same USD as the debt. So if USD goes up, tax collection go up.

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

#176

Post by Laforet »

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.

Much of their domestic debt has been quietly swapped for equity and commercial papers over the past few years. A tonne of unsecured debt that they have no intention nor ability to pay back.

The reason why Evergrande has accumulated so much foreign debt in the first place is because no domestic bank wanted to touch them with a ten foot pole. After all they have effectively defaulted once already by unilaterally declaring an equity swap on 130 billion CNY worth of maturing bonds in September last year.

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

#177

Post by PicassoCTs »

raesene9 wrote: post #146
DebtDeflation wrote: post #107

Earlier quoted context omitted.

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?

AFAIK the challenge is that Evergrande and its bond holders don't make public statements about the repayments, so it's unclear whether they've been made or not. However in this case it seems that a bondholder has explicitly stated that they have not been paid by the deadline https://twitter.com/dhthakur745/status/1458499174026997760?s... Which means that, if true, Evergrande have now defaulted.

So, the usual defaulting mechanism does not work. (Size of investment gives claim percentage, bank loans are fulfilled first).

Instead, its a quite bizarr negotiation process- local investors first, then citizens (to prevent a riot) - then if anything is left, the international investors.

If that is the full approach, then a massive retreat of investment out of china is to be expected.

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

#178

Post by ncallaway »

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?

It’s almost like those to situations are entirely different and so it’s completely reasonable that someone would have a different reaction to them.

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

#180

Post by tedunangst »

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/

Is blackrock leveraged 100x on evergrande bonds?
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