$148M correct? Seems small, like a fairly wealthy multi-billionaire could just pay that off in one fell swoop.
Evergrande teeters on edge of default as $148M payment falls due
191–200 of 408 posts
Re: Evergrande teeters on edge of default as $148M payment falls due
#192Earlier quoted context omitted.
Do you mean Matt Levine? If not, could you give a link, please?
Yes, Matt, and I get the newsletter so I don't know where the link is, but here is an excerpt: EDIT found the link: https://www.bloomberg.com/opinion/articles/2021-09-21/evergr... From Matt Levine: It seems to me that what is interesting about Evergrande is not so much the magnitude of its debt problems but their variety. Evergrande owes money to Chinese banks. It owes money to foreign hedge funds, and foreign invest…
Thanks.
Re: Evergrande teeters on edge of default as $148M payment falls due
#193Any 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.
It’s like saying you can pay off someone’s mortgage to keep them house by paying off their $1,000 mortgage bill for the month.
That’s not the end of their debt obligations, just the first one to come due that they’re not able to pay. There are many more debt obligations behind this one, so paying off this obligation just kicks the can a few days down the road.
To pay off all the debt obligations, would likely be billions of dollars.
Re: Evergrande teeters on edge of default as $148M payment falls due
#194Earlier quoted context omitted.
because some guy on twitter said any Tether exposure to commercial paper = 150% exposure to imploding evergrande bonds this is the funniest meme, “we made it up” https://youtu.be/GM-e46xdcUo Its a pretty clever meme because pointing out how dumb it is makes it seem like that person doesnt believe there is anything else wrong with tether, immediate derailing their criticism of the latest rumor, allowing for literally…
I don't think Tether is in purely Evergrande bonds, but I do think Tether has a load of Chinese bonds/commercial paper, and if an Evergrande default causes a general reduction in the value of those, Tether will be in a very sticky position as they'll have a large hole in their reserves...
Why do you believe that?
Re: Evergrande teeters on edge of default as $148M payment falls due
#195Earlier 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.
> Xi is a dictator.
Countries that have never known democracy, or received democracy without ever truly fighting for it, don't really care much whether you're a dictator or not a dictator- that's all that they've known.
Re: Evergrande teeters on edge of default as $148M payment falls due
#196$148M correct? Seems small, like a fairly wealthy multi-billionaire could just pay that off in one fell swoop.
This is just the interest payment on a $300B debt.
Re: Evergrande teeters on edge of default as $148M payment falls due
#197Earlier quoted context omitted.
I don't think Tether is in purely Evergrande bonds, but I do think Tether has a load of Chinese bonds/commercial paper, and if an Evergrande default causes a general reduction in the value of those, Tether will be in a very sticky position as they'll have a large hole in their reserves...
Why do you believe that?
So AFAIK Tether has ~$30b of commercial paper (https://tether.to/wp-content/uploads/2021/08/tether_assuranc...) which would make it one of the larger commercial paper operators in the US market if it operated there.
From what I've read, other paricipants in the US market have stated they don't see Tether partipating there, to that kind of volume.
Combine that with the fact that, until recently, China was a huge market for crypto both miners and traders, and it seems likely that the large chinese commercial paper market would be where Tether would have at least some of it's money.
Re: Evergrande teeters on edge of default as $148M payment falls due
#198Earlier quoted context omitted.
The U.S. shouldn't protect investors from the free market? That's the free market at work. Investors are not entitled to be paid. All investments carry risk.
Yes, the CCP changing the rules is “the free market.”
There is significant counterparty risk when investing in China. It's a shame that people had to find out like this. Or maybe it's for the best.
Re: Evergrande teeters on edge of default as $148M payment falls due
#199Earlier quoted context omitted.
They can keep issuing them. They will not have the same value, though.
No this rule does not apply in the US. The US has printed 20% of all dollars ever existed since 2020. Check the exchange rates with any other currency, EUR, British sterling, Chinese RMB. Did it become cheaper? Of course not. We will always buy USD, because it has as a collateral 8billion lives.
We buy USD because its long term existence is practically guaranteed by the power of its military.
Re: Evergrande teeters on edge of default as $148M payment falls due
#200Earlier 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!)
Well, it doesn't _have_ to, ask Zimbabweans. But there are real reasons they would not want to print forever.
QE and printing are different though