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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

#341

Post by riffraff »

raesene9 wrote: post #151
riffraff wrote: post #83

Earlier quoted context omitted.

It's unclear if they paid or not, even last time the creditors received the Money the day after the 30 days had passed. It seems they didn't but we won't know until tomorrow or so.

One organization who states that they are a creditor has published a letter stating that they've not been paid https://twitter.com/dhthakur745/status/1458499174026997760?s...

AFAIU that refers to "we've not Received money by the end of the day".

But the clearinghouse managing the bonds said those have been paid later, just like last time.

Notice the latter also says "they defaulted again", which is not true.

https://news.yahoo.com/evergrande-makes-overdue-interest-pay...

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

#342

Post by rib3ye »

m0zg wrote: post #303
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.

Lehman Bros was, relatively speaking, also a "fart in the wind" - it all started with $2.8 billion loss (not even default). Things kinda snowballed massively from there though, over the course of a few months to the point where it was a threat to the global financial system. The fear is the same could happen in China as well.

That's a point worth reenforcing. The initial losses were severely compounded by nominal value locked in credit default swaps... which were insured by unbacked policies. There has to be at least one person here that understands the sizes of these derivative markets in China, right?

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

#343

Post by riffraff »

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.

Eh, I don't know. I am convinced cartoon gravity will keep tether afloat, but it would be interesting to see!

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

#344

Post by justicezyx »

knowmylimits wrote: post #284
justicezyx wrote: post #274

Earlier quoted context omitted.

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…

I think the original accusation is a bit of a stretch. Alot of funds of all sorts have diversified and invested in China which makes sense since China is the world's second largest economy.

A bit stretch is about objective as calling Trump "a bit erratic". ..

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

#345

Post by byw »

seanmcdirmid wrote: post #332
vkou wrote: post #156

Earlier quoted context omitted.

China builds housing in advance of demand. In the United States, we fail to build housing even in the face of demand. There's pros and cons to either system, but so far, the demand has largely arrived. The ghost cities of 2010 are now bustling metropolises. The ghost cities of 2020... Are on track to become bustling metropolises. China has added ~500 million people to its cities over the past 50 years. 'Build in anti…

> The ghost cities of 2010 are now bustling metropolises. The ghost cities of 2020... Are on track to become bustling metropolises. That really isn't true. Kangbashi (a district of Ordos in Inner Mongolia) is still pretty empty for the amount of infrastructure they've built. They "lowered" their population target and claimed success, and are trying to get people to move there by putting in a good school, but you can…

>They just aren't in very convenient locations (e.g. not enough jobs to sustain those areas and no one wants to commute in traffic to where their are jobs).

I wonder how will WFH affect it though. Even with cultural resistance, WFH long-term seems inevitable on so many levels.

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

#346

Post by seanmcdirmid »

byw wrote: post #345
seanmcdirmid wrote: post #332

Earlier quoted context omitted.

> The ghost cities of 2010 are now bustling metropolises. The ghost cities of 2020... Are on track to become bustling metropolises. That really isn't true. Kangbashi (a district of Ordos in Inner Mongolia) is still pretty empty for the amount of infrastructure they've built. They "lowered" their population target and claimed success, and are trying to get people to move there by putting in a good school, but you can…

>They just aren't in very convenient locations (e.g. not enough jobs to sustain those areas and no one wants to commute in traffic to where their are jobs). I wonder how will WFH affect it though. Even with cultural resistance, WFH long-term seems inevitable on so many levels.

The problem is, how many techies are there, and will you have the infrastructure to support everything else in a ghost district? And why bother? If I’m going to WFH in China, why not a nice tourist town like Lijiang or Daocheng? A dreary ghost district just for the sake of affordable housing isn’t a nice place to spend life.

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

#347

Post by Robotbeat »

whimsicalism wrote: post #101
gpm wrote: post #62

Earlier quoted context omitted.

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…

The United States government defaulting on any amount of its debt would be really really really stupid policy. > Because transfer of wealth from US investors to China harms US interests, the US government exists to serve US interests and part of that is standing up for their nationals in international trade. I am not convinced apriori that this is the case, and don't feel comfortable having politicians who definitely…

> The United States government defaulting on any amount of its debt would be really really really stupid policy.

Also arguably unconstitutional

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

#348

Post by rapsey »

m0zg wrote: post #303
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.

Lehman Bros was, relatively speaking, also a "fart in the wind" - it all started with $2.8 billion loss (not even default). Things kinda snowballed massively from there though, over the course of a few months to the point where it was a threat to the global financial system. The fear is the same could happen in China as well.

As JP Morgan said what caused the 1929 stock crash, "someone asked for a dollar".

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

#349

Post by throwaway2037 »

ButtSpark69 wrote: post #338
fer wrote: post #334

Earlier quoted context omitted.

> Their total liabilities are on the order of $300 billion ~300 billion is the size of their debt (485 at the end of H1 2021). Their assets are at +2 trillion, +1 trillion in real estate alone. Their problem is that with their current cash flow they can't pay their debt, ever, and now, they can't even keep up with the interest. But they're still in a position where selling off part of their inventory can offset the d…

How sure are you their assets are really worth 2T? Isn't that a lot of the question here?

You are right to ask that question. Generally, real estate is considered a low liquidity asset. I wonder how much their real estate assets are discounted during buy-side analysis.

From Wiki (https://en.wikipedia.org/wiki/Evergrande_Group), I looked at the source for total assets: https://finance.yahoo.com/quote/3333.HK/balance-sheet?p=3333...

At end of 2020: Total assets: 2.3T CNY -> 359B USD (@ 6.40 CNY/USD) Total debt : 0.7T CNY -> 109B USD (@ 6.40 CNY/USD)

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

#350

Post by throwaway2037 »

arcticbull wrote: post #337
tcgv wrote: post #317

Earlier quoted context omitted.

> 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

Not to mention, are they really doing it in good faith? Back in the GFC days, Goldman made headlines for just trading against their clients. Rather, I guess, for saying the quiet part out loud. > Thomas Mazarakis, who heads Goldman’s fundamental strategies group, told select clients in an email that his unit often provided investment ideas that the firm had already traded on and the firm sometimes took the opposite a…

Your last sentence is perfect: pithy. This same strategy is, of course, also used by short sellers. Larger hedge funds have a PR team that works to increase media coverage of their short positions. See: Bill Ackman and Herbalife.
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