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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

#181

Post by stickfigure »

whimsicalism wrote: post #115
jjoonathan wrote: post #70

Earlier quoted context omitted.

Which would challenge CCP legitimacy, which would push the CCP to rely on the time tested tactic of blaming someone else and going to war over it. I really, really hope I'm wrong about that.

The CCP has a long way to fall - it is much more popular among its populace than our government is and we aren't seeing substantial armed rebellion here yet. The dynamic in China is that the central government is overwhelmingly popular and the local governments are more derided.

Eh? We just voted the guys in charge out last year. No need for armed rebellion, but same results.

What happens in China when public sentiment shifts is anyone's guess.

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

#182

Post by baq »

HFguy wrote: post #136
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…

Rates went up because of the release of the inflation data. It wasn’t anything to do with what you are mentioning. Also, while the dynamic you describe is real (1) the mechanics are not similar to an equity short squeeze , not a good analogy and (2) unlikely this type of pressure comes from China. They need to hold/buy treasuries to manage their currency (ie keep it weak). If they don’t, their export competitiveness…

the fed are clowns. inflation data should have been priced in as anybody worth their salt (or indeed anybody doing any kind of shopping, which is everyone) knew that inflation would print above expectations, especially fed's. today's reaction was... panic of uninformed volume?

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

#184

Post by shagie »

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…

> for instance the US could default on an equal amount of US debt that China holds

https://constitution.congress.gov/browse/essay/amdt14_S4_1_1...

> The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

The US defaulting on any debt is unconstitutional.

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

#185

Post by baq »

AlexandrB wrote: post #114
riffraff wrote: post #94

Earlier quoted context omitted.

I'm personally looking forward to see if tether comes out of this with a hole in their books, due to common suspicion they hold a ton of Chinese commercial paper.

Even if they do, does it matter? Everyone already seems to be ok with Tether lying about the backing of USDT. I don't expect USDT holders to decide to sell based on loss of value in the assets backing USDT. Especially when Tether is so opaque that's it's hard to know what the real impact might be.

in a game of musical chairs everybody is having fun while the music is playing.

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

#186

Post by Arnt »

PicassoCTs wrote: post #177
raesene9 wrote: post #146

Earlier quoted context omitted.

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.

That only happens after default, and default happens when a loan can't be repaid. Evergrande wasn't bankrupt yesterday, so the bankruptcy rules don't apply today. They may tomorrow, for the loans that weren't repaid today (or in the past).

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

#187

Post by paulpauper »

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.

hmmm what is bitcoin doing on this news?

it's evident crypto is not a hedge against uncertainty or bad news, but rather is highly correlated with the stock market and overall US economy.

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

#188

Post by mym1990 »

yaacov wrote: post #134
jen729w wrote: post #129

Earlier quoted context omitted.

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!)

The limiting factor is inflation! If we get massive deflation from a “dollar short squeeze” (which I don’t actually think is likely but it’s what OP was suggesting) that means we need more inflation, which printing money would produce.

This is just treating a symptom, and not the underlying cause(whatever that may be).

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

#189

Post by mym1990 »

emkoemko wrote: post #69
duxup wrote: post #55

Earlier quoted context omitted.

What is the US supposed to do, prevent anyone from being exposed to this situation? That's a wide ranging / impossible mandate there.

how about not let people invest in companies that are Chinese? since the CCP bans them from being listed anyways, now when you invest in Chinese companies your investing in some fake company in the Bahamas ...

China markets are heavily intertwined with everything, not investing in Chinese companies will not protect you.

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

#190

Post by smilekzs »

thereddaikon wrote: post #127
whimsicalism wrote: post #119

Earlier quoted context omitted.

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.

FWIW, the quoted article is from Japan.
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