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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

#371

Post by guiriduro »

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…

That says pretty appalling things about Western capitalism in general that it is predicated on government (ie, public) backstops, protected from the market, socialism for the rich/elite, and not available to the little people. Starts to look like the worst of communism, frankly.

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

#372

Post by roody15 »

asdff wrote: post #336
roody15 wrote: post #307

Earlier quoted context omitted.

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.

US has spent the last 20 years testing technology in a real theater. China shoots at props in the desert. Russia can't afford to even play this game.

Recent history would suggest otherwise.

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

#373

Post by _0ffh »

oarabbus_ wrote: post #354
ButtSpark69 wrote: post #338

Earlier quoted context omitted.

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

As it seems like virtually all buying in this market comes from developers and investors hoping to sell at a higher price later, they'll probably be lucky to get a fraction of that.

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

#374

Post by jessaustin »

BoiledCabbage wrote: post #305
jessaustin wrote: post #285

Earlier quoted context omitted.

amp links really undermine your credibility... https://californiaglobe.com/fr/us-pension-funds-lost-400-bil...

I can't tell if this is a joke or you are serious. Can you clarify?

OP makes a complicated allegation. I don't care enough about the allegation to devote the mental effort to understand it or to determine if the source cited is bogus. Generally I have more regard for the opinions of careful thinkers. Pasting an untidy URL is a sign of sloppy thinking.

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

#375

Post by chalst »

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.

> 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.

For all I know you are right about Alden's ethics, but the EMH is not baked into the definition of fraud.

In fact, many investors do offer public trading advice: it's common among short sellers to both short their targets and publish analyses explaining why they think their target is overvalued. This is controversial, but if it is clear to receivers of the advice that the advice comes from a short-seller whose positions are known, then I do not regard it as particularly unethical.

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

#376

Post by chalst »

fer wrote: post #334
blihp wrote: post #304

Earlier quoted context omitted.

That's a $150 million payment that they can't make. The concern is how are they going to make the future payments? Their total liabilities are on the order of $300 billion. Fantasia (mentioned in the story) is another China real estate developer in trouble. The concern is that this is the tip of the iceberg.

> 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…

Are you giving the book value of their assets? That tends to collapse when the asset holder is forced to sell in a hurry.

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

#377

Post by disgruntledphd2 »

m0zg wrote: post #357
throwaway2037 wrote: post #352

Earlier quoted context omitted.

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, b…

> Wouldn't that severely damage China's ability to attract foreign capital, though?

I kinda get the impression that they want capital for manufacturing rather than property speculation.

Given how important house prices/construction is for their economy and growth, it's gonna be really interesting to see what they do (will they accept negative GDP growth to increase "common prosperity").

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

#378

Post by BoiledCabbage »

dash2 wrote: post #368
mjevans wrote: post #361

Earlier quoted context omitted.

Housing should be a human right, not an investment.

The guy down the road from me got his flat as a human right. He throws his empty bottles on to the street where I have to walk my dog. The rumour is his sister is also in there and is on the game. His behaviour is making the guy who lives beneath him not sleep at night. The housing association has given up "trying to support him to change his behaviour" and is now taking him to court. By the end of the year, we all h…

Sounds like he's an ass. And if he paid rent he'd still be an ass. It's not a magic cure for what's wrong with him.

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

#379

Post by rp1 »

jessaustin wrote: post #374
BoiledCabbage wrote: post #305

Earlier quoted context omitted.

I can't tell if this is a joke or you are serious. Can you clarify?

OP makes a complicated allegation. I don't care enough about the allegation to devote the mental effort to understand it or to determine if the source cited is bogus. Generally I have more regard for the opinions of careful thinkers. Pasting an untidy URL is a sign of sloppy thinking.

Or I’m on a cellphone????

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

#380

Post by whimsicalism »

seanmcdirmid wrote: post #330
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…

You can go visit Kangbashi (Ordos's new distrcit) today (well, when China opens again) if you want to see a ghost city. Kangbashi will fill up as soon as coal becomes popular in China again, which is probably never. Or even closer to Beijing in Tianjin's new financial district. Actually, the tallest building in China is an incomplete sky scraper in Tianjin ( https://en.wikipedia.org/wiki/Goldin_Finance_117 ), which h…

I don't think an unbuilt tower is as crazy as you think it is. There are tons of unfinished projects scattered throughout the West. I actually was just next to a massive one (not in the US but in Europe) the other day.

> You can go visit Kangbashi (Ordos's new distrcit) today (well, when China opens again) if you want to see a ghost city. Kangbashi will fill up as soon as coal becomes popular in China again, which is probably never.

If you read the article I posted, Kangbashi is specifically the district under discussion - it is no longer empty, actively building new apartments due to demand.

Coal didn't become popular again, but they moved the top schools of the province into the area.

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