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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

#271

Post by NineStarPoint »

beervirus wrote: post #64
HenryKissinger wrote: post #43

Earlier 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.”

From a US government perspective, the options are either let people invest their money in China or not let people invest their money in China. To let people decide on their own if investing money in Chinese companies is worth the risk seems to me to be the more free market option than our government forbidding it. That China can then pull the rug out from under you is the risk you take due to your choice of investment, if we wanted the government to protect people from that risk it should have been done before investment happened, not after.

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

#272

Post by lamontcg »

vmception wrote: post #263
lamontcg wrote: post #255

Earlier quoted context omitted.

They're probably exchanging Tether for loans that their counterparties write against crypto collateral and calling that "commercial paper". Anything else is ridiculous because people would notice it. If it is all self-contained withing crypto then it makes vastly more sense. Once you think of a cold wallet full of bitcoin as having value like real estate[*] then it makes sense to take out tether loans against that co…

Honestly, if anybody ever bothered to assume that Tether worked the way it was advertised most of the time - just like both the NYAG and CFTC found most of the time for most Tethers - it would actually all make sense. Why would better managed and more transparent competitors like USDC, GUSD, and PAXOS all be rising in circulation at the exact same trajectory as Tether, if Tether was just doing funny money accounting…

Because nobody is going to be dumping $70B of actual USD into Tether while BTC is running up massively in value.

That would effectively be $70B parked under a mattress.

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

#273

Post by rsj_hn »

ethbr0 wrote: post #264
rsj_hn wrote: post #238

Earlier quoted context omitted.

> 10% over the exchange rate between Pentali Marcograms and US dollars. You know oil producers trade in dollars, right?" You are off by three orders of magnitude, which is pretty amazing. Forex markets have incredibly tight spreads measured in pips, say 1-4 pips, where 1 pip = 0.0001. The reason why dollars are important is that people store the results of their oil sales in USD assets. What a good is purchased with…

If we're talking about a country that's attempting to (or has no choice but to) cut USD out of its foreign trading, I don't think we're talking about a standard, highly-liquid currency pair. And what currency a good is purchased in absolutely means something! Your claim is that people store the proceeds of sales in dollars because of the trust factors, volume, and tight spreads. But I'd say that 2/3 of those (volume…

> If we're talking about a country that's attempting to (or has no choice but to) cut USD out of its foreign trading

For some small country -- and it would need to be a small country, like Sierra Leone, that cannot access the Forex markets, then they need foreign reserves ahead of time. This is true. But if they don't want to hold their reserves as USD they can hold them in EUR or YEN if they like, and then when they need to buy oil, they sell the EUR for USD and buy oil with USD.

While the USD is the largest foreign reserve, it's like 60%, there is also EUR, British Pound, Yen, and some other currencies that are ubiquitous enough for Sierra Leone to hold. These can readily be sold on the spot for whatever a nation wants as payment.

https://www.federalreserve.gov/econres/notes/feds-notes/the-....

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

#274

Post by justicezyx »

rp1 wrote: post #261
justicezyx wrote: post #250

Earlier quoted context omitted.

Now sure how to connect the dots from your article to the claim that China "waging economic warfare through equity market". Facts: * US pension fund lost 400B on China investment. That's total in US not directly related to the "inside man in the CA pension system". But wait for others facts below. * This CA pension system inside man "Yu Ben Meng" is chief investment officer of CA public employees retirement system (C…

Sorry, that’s a lot of words that doesn’t address anything. This guy is under investigation because of his actions. Bringing up a bunch of irrelevant facts just serves as a distraction. Seriously, the U.S. causing the global financial crisis is your counter argument?

At the moment like this, I always wonder:

Should I spend time engaging with this guy who appears not reading, or cherrypicking statements, or plainly trolling?...

I think the one sentence explanation is that your statement is plainly racism.

Even in this post, you admitted that "This guy is under investigation", yet you are able to use a unsubstantiated charge, and blow it into China economic warfare, and label that person as "China inside person".

> that’s a lot of words that doesn’t address anything

Sure, tell me, which part is address nothing?

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

#275

Post by rsync »

riggins wrote: post #175
beambot wrote: post #167

Earlier quoted context omitted.

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…

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

I think your parent was suggesting that the behavior of the entire world is effectively a short-dollar position - whether they intended it to be or not.

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

#276

Post by hogFeast »

mikeyouse wrote: post #266
hogFeast wrote: post #254

Earlier quoted context omitted.

It depends what you mean by currency crisis. But yes, it has happened. Russia 1998 is the most well-known example. Everyone believed that because Russia could issue GKOs in RUB, they wouldn't blow up like Asia...they did. This also happened, to a large extent, in Mexico in 1994 (Mexico actually issued tesobonos, they were domestic currency denominated but shifted the currency risk to taxpayers, they were quite a secu…

In 1998, Russia was propping up their currency by buying USD and Eurobonds at staggering rates.. The crisis wasn't due to anything to do what the US is facing but not being able to pay their foreign creditors, not being able to call the Soviet-era debt back from debtors, and owing the IMF billions of dollars they couldn't repay. Russia wouldn't have had a currency collapse if they had a floating currency to begin wit…

Correct, four things can trigger a crisis...in addition to many other things.

And that occurred after the currency crisis had started (the debt swap into Eurobonds was because of the GKOs). I am not sure what the US has to do with it. I am not sure what "Soviet-era debt" has to do with it (that debt was very soft, was rolled over multiple times in the early 90s, and wasn't related to Russia's problems). I am not sure what the IMF has to do with it (the IMF came in after it started...that is why the IMF came in).

Yes, it would have...that is self-evident. The reason the peg collapsed was because the free market/floating rate was lower. The only purpose of the peg is to stop the currency going down (again, this is a weird, self-evident proof...saying that the currency wouldn't have collapsed if they had a floating rate makes no sense, it would have collapsed faster).

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

#277

Post by toomuchtodo »

ndesaulniers wrote: post #57
nikanj wrote: post #48

Isn’t $148 million like four meme NFTs? Why would a large company be teetering on the edge for such a small amount of money?

Because they have multiple different bonds outstanding with differing maturity dates...failure to pay back one is indicative that there may be successive failures after this one.

There are cross default provisions across the bonds. A default on one is a default on all 23 outstanding bonds.

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

#278

Post by mikeyouse »

hogFeast wrote: post #276
mikeyouse wrote: post #266

Earlier quoted context omitted.

In 1998, Russia was propping up their currency by buying USD and Eurobonds at staggering rates.. The crisis wasn't due to anything to do what the US is facing but not being able to pay their foreign creditors, not being able to call the Soviet-era debt back from debtors, and owing the IMF billions of dollars they couldn't repay. Russia wouldn't have had a currency collapse if they had a floating currency to begin wit…

Correct, four things can trigger a crisis...in addition to many other things. And that occurred after the currency crisis had started (the debt swap into Eurobonds was because of the GKOs). I am not sure what the US has to do with it. I am not sure what "Soviet-era debt" has to do with it (that debt was very soft, was rolled over multiple times in the early 90s, and wasn't related to Russia's problems). I am not sure…

> I am not sure what "Soviet-era debt" has to do with it (that debt was very soft, was rolled over multiple times in the early 90s, and wasn't related to Russia's problems).

A large portion of their foreign denominated debt was from the Soviet era -- just a few years prior to 1998 they committed to repaying nearly $100 billion of that old debt. Russia was accepted into the "Paris Club" based on a valuation of their sovereign assets -- 1/4 of which were loans due to them from the Soviet era from Cuba/Vietnam and other satellite countries that had no capability to repay those loans. So the Soviet Era debt was a big portion of their liability and made up a substantial portion of their assets.

None of these things are remotely similar to the US situation of almost universally US debt denominated in USD. So I think GP is spot on when they say there's 0 chance of a currency crisis.

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

#279

Post by randomopining »

chunghuaming wrote: post #239
shoto_io wrote: post #225

Earlier quoted context omitted.

What are the implications of this?

GDP decline of 2-5%, recession: Chinese real estate is 70% of household wealth, and 30% of GDP. Likely these #s are worse, since the government obfuscates data. Home sales is already down 30% y/y. Pressure on tech and other industries in China: Xi Jing Ping will officially be a dictator, come party congress 2022. Tech and real estate are industries owned by the oligarchs of Shanghai faction, which is against Xi Jing…

Even if they take Taiwan, won’t they be completely shut out of world markets?

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

#280

Post by JamisonM »

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…

Absolutely crazy that the top comment on this story is a "USD short squeeze" idea after 5 hours. These amounts, 200 million, 150 million USD.. this is peanuts, a fart in the wind.

PROTIP: Anyone like Lyn Alden that is offering premium stock tips is by definition a fraud, if you can beat the markets you just beat the markets and Scrooge McDuck-it, you don't run a damn newsletter.

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