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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

#351

Post by leppr »

whatever1 wrote: post #143
darawk wrote: post #132

Earlier 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.

The reason it hasn't fallen against those other currencies is that the other currencies' supplies have increased more during this period. The printing was global, and the US not a leader on it.

Against everything else than other unlimited supply currencies, fiat money has fallen dramatically. It's a simple fact, not an endorsement of anything.

Everyone knows the basic mechanics of supply and demand on price, but somehow when it comes to fiat money, many manage to swap common sense with a number of convoluted theories.

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

#352

Post by throwaway2037 »

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.

Same for Bear Stearns. First hit on Google search for "bear stearns hedge fund losses" gives: https://www.investopedia.com/articles/07/bear-stearns-collap....

Quote: >

After the incident, Bear took the bad assets onto their own balance sheet. Shortly thereafter, creditors starting asking hard questions: "What other crap is on your bloated balance sheet?"

That said, the PRC gov't might allow Evergrande to default on their offshore/external/USD debt, but provide a bailout onshore. That seems realistic. During the 2008 GFC, Deutsche had an enormous footprint in the United States (via commercial and investment banking). They got almost nothing from US Fed/Treasury during bailouts. Same for UBS. Why not? They were not American corporations.

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

#354

Post by oarabbus_ »

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?

Well, we can be reasonably confident their assets will not be worth $2T if they have to fire sale them

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

#355

Post by edem »

ethbr0 wrote: post #227
xwdv wrote: post #199

Earlier quoted context omitted.

We buy USD because its long term existence is practically guaranteed by the power of its military.

The world buys dollars because it needs them to fulfill oil and other commodity contracts, that are priced in dollars, which are then typically reinvested in US Treasuries by commodity exporters (because why not?). https://www.investopedia.com/terms/p/petrodollars.asp https://www.bloomberg.com/news/features/2016-05-30/the-untol... If a country wanted to not buy dollars, here's how that would go. No Dollars: "Hi, we'd…

And if you want to sell your oil in another currency, then you're Saddam and you're fucked. By the US.

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

#356

Post by dragonelite »

thereddaikon wrote: post #127
whimsicalism wrote: post #119

Earlier quoted context omitted.

The follow up reporting (not widely circulated in the West) on this was that many of those cities have since been filled up and inhabited. https://asia.nikkei.com/Spotlight/Society/China-s-largest-gh... Wade Shepard, author of Ghost Cities of China: > Today, China’s so-called ghost cities that were so prevalently showcased in 2013 and 2014 (...) have filled up to the point of being functioning, normal cities I would…

Neither do you get one from China itself. Its hard to tell what is really going on when everyone has an agenda to warp reality.

It doesn't help that those so called "experts" can't even read of understand the language. And a anti china bias is a sure way to get promoted. The system makes sure the story write themselves and then westerners are surprised it didn't went the way they expected it would. That is pretty much my conclusion from watching think tank china watchers for over 8 years, I got so annoyed I decided to learn the language myself this year, should be a interesting journey the next 5 years or so.

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

#357

Post by m0zg »

throwaway2037 wrote: post #352
m0zg wrote: post #303

Earlier quoted context omitted.

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.

Same for Bear Stearns. First hit on Google search for "bear stearns hedge fund losses" gives: https://www.investopedia.com/articles/07/bear-stearns-collap... . Quote: > After the incident, Bear took the bad assets onto their own balance sheet. Shortly thereafter, creditors starting asking hard questions: "What other crap is on your bloated balance sheet?" That said, the PRC gov't might allow Evergrande to default on…

Wouldn't that severely damage China's ability to attract foreign capital, though? I mean, they've already made their printer go brrrr to the point where Jerome Powell would blush, so it doesn't seem like they have a ton of flexibility in terms of domestic monetary policy, and therefore bailouts. And nobody outside China is stupid enough to jump on the deck of this particular Titanic. Nobody inside China is, either, but the government can make them jump on, much like US government did with US financial firms in 2008.

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

#358

Post by randomsearch »

drumhead wrote: post #268

Time for China to learn all about financial restructuring. I'm thinking a Debt for equity swap, a haircut for investors and jail time for the directors. Property is a religion in Asia, there's an unshakeable belief in its robustness as an investment, this may help to shake that a bit.

Not just Asia, as we shall see when interest rates begin to rise in the west.

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

#359

Post by phist_mcgee »

whatever1 wrote: post #130
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…

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.

And the marines and coast guard too!

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

#360

Post by blippage »

hndamien wrote: post #308
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.

It really isn't hard to beat the markets, just buy Bitcoin.

This investing tip from UK fund manager Terry Smith: it's easy to beat the market, just buy every company in the index except for the airlines.
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