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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

#91

Post by baybal2 »

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...

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

#92

Post by JumpCrisscross »

boringg wrote: post #79
01100011 wrote: post #33

Earlier quoted context omitted.

Hasn't Ray Dalio been advocating investing in China for a couple of years now? His thesis is that the US is a world power on the decline and China will soon rise to take its place. I wonder how that worked out for him and his fund?

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.

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

#93

Post by soperj »

paulpauper wrote: post #78

Any top 10 billionaire could write them a check for the amount owed without even breaking a sweat and thus stave off of billions of dollars of systemic damage. It goes to show how bailouts, despite being maligned by the public, do work.

They owe 300 billion. So no they couldn't.

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

#94

Post by riffraff »

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.

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

#95

Post by AlexCoventry »

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"…

Do you mean Matt Levine? If not, could you give a link, please?

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

#96

Post by snovv_crash »

ethbr0 wrote: post #40
misterbwong wrote: post #32

Earlier quoted context omitted.

19B international exposure really doesn't seem like a lot, but, as you said, in the context of 300B total in liabilities. $279B is -a lot- for a Chinese market where the home ownership rate is almost 90% and non-primary home purchases account for ~70% of the housing purchases.

Calling it now: Tether and a few other stablecoins explode. Where other than China would you go to buy massive positions (face valued) of bonds, with continued room for expansion of your position, in private deals that you could keep quiet?

Any of the other BRICS countries would also be a viable option for that, without the big downside of the CCP's anti-crypto position.

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

#98

Post by leesec »

paulpauper wrote: post #78

Any top 10 billionaire could write them a check for the amount owed without even breaking a sweat and thus stave off of billions of dollars of systemic damage. It goes to show how bailouts, despite being maligned by the public, do work.

Yeah or you know, the Chinese government.

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

#99

Post by vmception »

jonahbenton wrote: post #30
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.

Uh, Tether?

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 any rumor to be masqueraded as truth.

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

#100

Post by zaptrem »

spamizbad wrote: post #85
rp1 wrote: post #42

Earlier quoted context omitted.

China has been waging economic warfare via equity markets for a while now. The U.S. hasn’t done anything to protect investors from billions in losses. Totally embarrassing.

A bunch of greedy US investors dumped money into quixotic Chinese companies and we should bail them out? Sounds politically toxic to me.

If a large group of innocent US citizens that ventured to China for tourism reasons were shot down by CCP police would you say the government should stay out of it, instead blaming them for trusting China?
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