Evergrande teeters on edge of default as $148M payment falls due • Hacker News Board

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

#291

Post by hourislate » Thu, Nov 11, 2021, 1:57 AM UTC

JamisonM wrote: post #280

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.

I think the bigger implication here is that Evergrande may roll over and cause a shit tsunami.

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

#292

Post by vmception » Thu, Nov 11, 2021, 1:59 AM UTC

lamontcg wrote: post #272

vmception wrote: post #263

Earlier quoted context omitted.

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.

Tethers are only destroyed when they are redeemed. When people create Tether and trade them, they still exist with whoever is the recipient.

The same with other bank account stablecoins.

Much of that Tether is stored within liquidity pools and other onchain financial services, the same with other bank account stablecoins. So thats not a great assumption to bolster the ongoing transparency issues with Tether.

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

#293

Post by [deleted] » Thu, Nov 11, 2021, 2:13 AM UTC

hourislate wrote: post #291

JamisonM wrote: post #280

Earlier quoted context omitted.

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.

I think the bigger implication here is that Evergrande may roll over and cause a shit tsunami.

[deleted]

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

#294

Post by loeg » Thu, Nov 11, 2021, 2:14 AM UTC

randomopining wrote: post #279

chunghuaming wrote: post #239

Earlier quoted context omitted.

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?

By what mechanism? Most of the world more or less officially recognizes China's claim on Taiwan. I think it would be horrifically sad and disappointing, but more or less ignored, like Hong Kong.

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

#295

Post by Jansen312 » Thu, Nov 11, 2021, 2:14 AM UTC

JamisonM wrote: post #280

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.

Official or public available info on those Chinese debts are a couple hundred mils. Yes these are peanuts. But unofficial numbers are several magnitude higher even extremely likely Chinese authority unaware of (2008 showed that US government had no clue how bad it was back then which even AIG almost gone). It is basically the iceberg sinking Titanic in the remaking now on Chinese financial front. Also, when USD start to rise, regional currencies tend to slide...millions and millions middle class people will participate to buy USD as the new inflation hedger like gold (which will be underperforming during the short sequeeze situation). The only thing that will stop this is Chinese government printing money more than Barry did in his terms (basically spreading those debts indirectly pay by citizens).

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

#296

Post by loeg » Thu, Nov 11, 2021, 2:15 AM UTC

baybal2 wrote: post #91

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…

> Is the financial press just afraid of upsetting China here? BlackRock is the biggest foreign owner of Evergrande bonds. Next there are Vanguard, and a few other equally big Western funds. https://www.reuters.com/business/finance/blackrock-hsbc-amon...

Source on Vanguard's ownership of Evergrande bonds? The linked article mentions some other companies (Fidelity, etc) but not Vanguard.

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

#297

Post by KarlKemp » Thu, Nov 11, 2021, 2:21 AM UTC

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"…

National banks have always had certain objectives (or “agendas”) that broadly correspondent to the general welfare and stability of the system. I don’t know how it would even be possible for them to make decisions without having objectives, so the “hands-off” or “neutrality” people clamor for seems rather unspecific.

The idea that tying the money to some physical (gold standard) or mathematical (Bitcoin) “reality” is somehow preferable is just the naturalistic fallacy wrapped in cynicism, namely that today’s institutions are incapable of making better decisions than the completely arbitrary whims of these alternatives. And all the ghosts people seem haunted by (hyperinflation) are figments of history a century removed.

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

#298

Post by loeg » Thu, Nov 11, 2021, 2:25 AM UTC

riffraff wrote: post #94

mmastrac wrote: post #20

How much exposure does the Western world have to this? My guess would be "not much". It'll sting some emerging market investors, but I don't think you'll see a massive knock-on here.

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.

Would anyone notice? As long as they can continue paying redemptions they could hide a hole for a long time; it wouldn't be the first time.

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

#299

Post by gjs278 » Thu, Nov 11, 2021, 2:30 AM UTC

bluecalm wrote: post #144

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?

They need to pay that in USD not USDT. One of those can be printed at will by your NFT wash trading buddies. The other is not so easy to get ahold of.

it’s trivial to convert usdt to usd

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

#300

Post by rgbrenner » Thu, Nov 11, 2021, 3:05 AM UTC

JumpCrisscross wrote: post #92

boringg wrote: post #79

Earlier 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.

That is hard to imagine. We have to believe that the CCP wouldn't crack down on separatists, and they wouldn't elect a new leader.

China may have eliminated the term limit (of 2x5 years), but Xi has only been president for 8 years. They still have a fresh memory of transferring power. Certainly the longer he's president, the scenario you outline becomes more likely... but not in 8 years.