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

[MicroBrew]

- 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.

 

[Joe_Armstrong]

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

 

[Wadtucket]

Nothingburger, sorry

 

[Rob Battisti]

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

 

[Letssnuggle]

Wont amount to squat for my stock market investments. Could care less.

 

[Wadtucket]

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

I loaded up on a ton of $YANG on Friday in hopes of an Evergrand collapse and absolute carnage in the Middle Kingdom. I wish nothing but the worst for them, and will blow my wad if the entire Chinese fake economy finally collapses

I noted this last week but nothing happened and the Chinese banks are bailing them out, so it turned out to be a nothingburger

 

[44nutman]

Stock market is already over it.

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

 

[DespicablePeep]

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

 

[GtehMVP]

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.

 

[Rholk]

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.

Stuff is crazy out there

 

[MicroBrew]

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.

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.

 

[A Very Serious Cat]

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.

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.

 

[AndroidRage]

I noted this last week but nothing happened and the Chinese banks are bailing them out, so it turned out to be a nothingburger

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.

 

[HomeCheese]

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

 

[Yehudim]

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

 

[Yehudim]

I noted this last week but nothing happened and the Chinese banks are bailing them out, so it turned out to be a nothingburger

Oh, so it has already begun, the bailouts?

 

[GtehMVP]

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.

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.

 

[MicroBrew]

Oh, so it has already begun, the bailouts?

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

 

[Yehudim]

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

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.

 

[Cubo de Sangre]

And after that recall some of the debt US has with China

How does that work?