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International China 2nd largest real estate firm close to collapse. Over $300 billion in liabilities

Discussion in 'The War Room' started by MicroBrew, Sep 23, 2021.

  1. MicroBrew Titanium Belt

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    - Evergrande is China's 2nd largest real estate firm. They have around $303 billion in liabilities. This is the highest liability of any company anywhere in the world. That is 2.1% of China's GDP.

    - Some Western institutions and firms have also invested big in Evergrande

    - The situation with Evergrande is being described as China's Lehman Brothers.

    - Some experts say Evergrande is too big to fail, that the CCP will bail them out. While others say the CCP will not, as a warning to other large companies who think the State will bail them out if they make bad decisions

    - Big American banks and investment houses hold over $1.3 billion in Evergrande bonds but most of this is in Evergrande owned companies that are seperate from its real estate business.

    - Evergrande sold apartments to millions of Chinese, that are yet to be completed.


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    What is Evergrande? The Chinese property giant behind global selloff fears
    The developer’s predicament could deal a serious blow to the world’s second-biggest economy as Beijing faces what may be one of its largest defaults.

    https://www.nbcnews.com/news/world/...ty-giant-behind-global-selloff-fears-n1279929

    Evergrande collapse could be ‘worse’ than Lehman for China, according to man who predicted Enron collapse.
    Evergrande’s recent warnings that it may default on its $300 billion in liabilities have spooked markets globally

    https://www.foxbusiness.com/markets...uld-be-worse-than-lehman-for-china-jim-chanos

    China Evergrande contagion concerns rile global markets

    https://www.reuters.com/world/china/china-evergrande-shares-plummet-default-risks-2021-09-20/

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    YouTuber Asianometry has a good synopsis of the history and downfall of Evergrande.
     
    Last edited: Sep 23, 2021
    Oceanmachine, Rholk and Bald1 like this.
  2. Joe_Armstrong Starfleet Belt

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    I wonder if China will nationalize this company.
    And after that recall some of the debt US has with China
     
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  3. Wadtucket Gold Belt

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    Nothingburger, sorry
     
  4. Rob Battisti HR for HR

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    Finally a thread on this. Could be nothing, could be the start of China’s collapse — or something in the middle.
     
  5. Letssnuggle Brown Belt

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    Wont amount to squat for my stock market investments. Could care less.
     
  6. Wadtucket Gold Belt

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    I noted this last week but nothing happened and the Chinese banks are bailing them out, so it turned out to be a nothingburger
     
    Mr Holmes and Rob Battisti like this.
  7. 44nutman The Original Nut of Sherdog

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    Stock market is already over it.
    [​IMG]

    Pooh is on it. He is injecting cash into Chinese Banks. Deficits don't matter anymore.
     
  8. DespicablePeep Silver Belt

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    300BI in debt right? Seems China forced them to advance some payments last year and that the PCC is cracking on companies who are leveraging beyond the expected. We all know something is coming in the global market, US stocks are skyhigh, credit swap defaults in China just exploded with this news. Its time to be off the market
     
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  9. GtehMVP Black Belt

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    What's the quality of the buildings like

    I used to love watch ADV China's videos where that Youtuber Serpentza and his buddy would drive around the mainland in their motorcycles and do their podcasts through mics on their helmets

    They had a few videos on the shoddy construction of some.places. I did a lot of business there (never went personally) and was always told how poorly and unsafely buildings are constructed.

     
  10. Rholk Green Belt

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    Stuff is crazy out there
     
  11. MicroBrew Titanium Belt

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    Been hearing the same thing about many buildings / homes in Dubai, that they are poor quality.

    Regulations and quality control in much of Asia is non-exsistant , lacking or corruption compromises it. Developers throw stuff up as fast as they can for as cheap as possbile. Aluminum cladding is often used to cover up cheap construction.
     
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  12. A Very Serious Cat Silver Belt

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    I used to work with a guy whose wife had a fashion design business. He took a risk and tried to get a good deal buying material from China, they instead got sent bags of useless scraps. I can't imagine trying to regularly do business in China it must be a nightmare.
     
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  13. AndroidRage Double Yellow Card Double Yellow Card

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    Why wouldn't their banks bail them out too? It's what we did, it's what Europe did, why would China not be able to do the same? I completely agree it is a nothing burger. 300 billion isn't even that much for a World power like US, China, and I guess maybe Russia.
     
  14. HomeCheese Black Belt

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    In the US, this is the kind of real estate failure that get's you elected president.
     
  15. Yehudim Black Belt

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    The idea that China will allow them to completely collapse is laughable since they’ve spent the last 40+ years trying to avoid recession

    Unless “them” is the leadership of Evergrande in which case yeah, they will have some public trials and maybe some people will be sentenced to death.

    But if it collapses, there will be plenty of bailouts.

    controlled demolition is the best term I’ve read so far
     
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  16. Yehudim Black Belt

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    Oh, so it has already begun, the bailouts?
     
  17. GtehMVP Black Belt

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    When I went through a bunch of tvs in a short span, plus projectors, I decided to go the China cheaper route. I found some great quality looking projectors, one from a brand called Vankyo and the I can't think of atm

    They were all native 1080p, and while they were only 60 Hertz, they were super responsive. They were led lit, so they promised long life spans. Amazon had great reviews for it.

    Testing at home for a few months, I was really impressed, so we were going to do a contract with Vankyo for a few hundred.

    Literally a few days after almost signing the deal, I started to notice dark spots, the panel was burnt.

    I held off signing the deal until we got a replacement, and that one burned quicker, then another. One of our engineers took it apart and from what he told me they were made of incredibly cheap parts. All three were built differently too, so they weren't coming from tje same.assembly line

    I'm not surprised, especially considerong the price, but it's not the first time we had shoddy products from Chinese companies.
     
  18. MicroBrew Titanium Belt

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    No bailout yet.

    China Makes Preparations for Evergrande’s Demise
    Beijing, reluctant to bail out the country’s most heavily indebted property developer, is asking local officials across the country to prepare for a ‘possible storm’

    https://www.wsj.com/articles/china-makes-preparations-for-evergrandes-demise-11632391852


    Chinese authorities have told local officials to prepare for a potential demise of heavily indebted property developer Evergrande, The Wall Street Journal reported Thursday.

    Local officials described the signals from Chinese authorities as “getting ready for the possible storm” and said the government told them they should only step in at the last minute to prevent spillover effects from Evergrande’s demise, the WSJ report said.

    https://www.cnbc.com/2021/09/23/chi...sible-storm-if-evergrande-fails-wsj-says.html
     
  19. Yehudim Black Belt

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    Hmm, so that quote seems to fall in line with the controlled demolition idea.

    which, to be fair, any government would do, but China moreso. The amount of money printing and debt in China is unprecedented, people think that the US is bad.
     
  20. Cubo de Sangre President of the War Room

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    How does that work?
     
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