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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

#311

Post by ericmay »

rgbrenner wrote: post #300
JumpCrisscross wrote: post #92

Earlier quoted context omitted.

> 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.

Isn’t Xi Jinping announcing his lifetime rule today or this week?

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

#312

Post by resource0x »

riggins wrote: post #161
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…

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…

If US prints 100 trillion dollars tomorrow (debt fully monetized by Federal Reserve), won't it cause a currency crisis?

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

#313

Post by dannyw »

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.

Nearly every single financial company (including JPM, Morgan Stanley, etc) offer premium stock tips through there analysts...

Lyn Alden's site is a wealth of knowledge but I don't subscribe to any newsletters.

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

#314

Post by WhisperingShiba »

jjoonathan wrote: post #70
WhisperingShiba wrote: post #31

Earlier quoted context omitted.

I think the complicating factor is that the Chinese housing market is where the people of China attempt to have savings. A major housing market panic in China could create a lot of despair and unrest in China.

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.

Most people in the world do not actually want war. I'm quite confident that, while we have not evolved past being mean to each other and dumb scarcity mindsets, that the average person knows that any warfare is bad for them.

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

#315

Post by [deleted] »

roody15 wrote: post #307
whatever1 wrote: post #130

Earlier quoted context omitted.

The US can keep issuing dollars for as long as they like. And you will buy these pieces of paper because they are backed by the US Military, the US Air Force and the US Navy.

Are you sure? The US military doesn’t look to be at its peak. Despite its massive budget China’s military rise and the return of Russian military power might be changing the US’s role as the worlds only military super power. We may spend 10 times more than any other nation on our military … but due to bureaucracy and other inefficiencies our spending doesn’t quite get the same bang for its buck if you will.

[deleted]

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

#316

Post by vmception »

lmm wrote: post #301
AlexCoventry wrote: post #194

Earlier quoted context omitted.

Why do you believe that?

If their commercial paper is something other than Evergrande, surely they'd have said so by now. (Assuming it exists at all, of course)

They dont need to respond to every rumor, its been a whole decade, they’ve weathered much greater crisis of confidence with far below $1 exchange rates. The people that do care would have said prove it, aka “disprove the random rumor”, and wouldn't be satisfied with any statement or attestation or anything greater that they’ve never done anyway. At this point whats the use of energy in that direction anymore. Even audited stablecoins are a systemic risk to the crypto ecosystem. So at this point your either in or out. Hot potato. Just like all the other markets where Lehman bros and Aig got such great audits and ratings. I’m not trying to squash conversation about it, just offering a perspective because really the standard being levied applies to USDC, GUSD, PAXOS and others who have grown to similarly large heights.

Even the earlier assumption that Tether wouldnt have US assets is made up on the spot, its weird! They were banking in Peurto Rico for years! Two US regulators didnt move to freeze their assets they just said “update your disclaimers”. Why dont we make a rumor that they hold Hertz bonds and Certificates of Deposit at Capital One Bank? Its arbitrary! They should prove they dont have Hertz bonds just so I can say “I …. dont believe you.”

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

#317

Post by tcgv »

dannyw wrote: post #313
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.

Nearly every single financial company (including JPM, Morgan Stanley, etc) offer premium stock tips through there analysts... Lyn Alden's site is a wealth of knowledge but I don't subscribe to any newsletters.

> Nearly every single financial company (including JPM, Morgan Stanley, etc) offer premium stock tips through there analysts...

Well, they're expected to do that to maintain their stature as the "lighthouses" of the financial system

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

#318

Post by alasdair_ »

raesene9 wrote: post #148
vmception wrote: post #99

Earlier 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 would anyone care? It's not like Tether has ever been audited and there is so much other shadiness that it's more than likely there is already a massive hole in the Tether reserves.

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

#319

Post by sudosysgen »

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.

Did you really just say that economic policy has nothing to do with politics?

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

#320

Post by chii »

hangonhn wrote: post #159
zhdc1 wrote: post #131

Earlier quoted context omitted.

I think the OP is saying that you can have a situation where the short term demand for dollars outstrips the supply available at that given time (think in terms of hours or days). This could lead to a sharp but short increase in the value of the dollar, since there's only a limited, albeit extremely large, amount available on the market at any given time.

The bank needing the currency asks the central bank for the extra currency and it’s simply a number in a “database” somewhere. It can be done rather quickly.

it's not the bank, but the borrowers who need the currency.

So an increase in borrowing from various parties pushes the interest rate higher (the banks would want to charge as high an interest as possible, but no higher than what would make the client move to a different bank for the loan).

The central bank could potentially alleviate and increase borrowing without interest rate hikes by allowing the banks themselves to obtain funds from CB at a lower interest (than another bank), and the competition between banks would push the interest rate back down.

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