Author Topic: What is Evergrande? The Chinese property giant behind global selloff fears (Read 804 times)

Right_in_Virginia · « **on:** September 23, 2021, 03:09:04 pm »

What is Evergrande? The Chinese property giant behind global selloff fears
NBC, Sep 23, 2021

HONG KONG — Evergrande Group built a real estate empire on a mountain of debt. Now the Chinese property giant is in trouble — and there are fears it might take the global economy down with it.

The uncertainty fueled a market selloff this week and has raised concerns of a crisis similar to the one set off in 2008 by the collapse of the U.S. investment bank Lehman Brothers. Experts say such comparisons are overblown, not least because the Chinese government exerts a much greater degree of control over even private companies like Evergrande.

But 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.

‘Ponzi-like’
The cash-strapped Evergrande has sold millions of apartments to China’s growing middle class since being founded in 1996 by billionaire Xu Jiayin, 62 and once China’s richest man. The company, based in the southern hub Shenzhen, says it has more than 200,000 employees, as well as some 1,300 projects in more than 280 Chinese cities.

For years, the model worked.

[...]

It also amassed $300 billion in debt, equivalent to about 2 percent of China’s gross domestic product, making it the world’s most indebted developer. Now a slowing property market and the ruling Communist Party’s efforts to remake the Chinese economy have forced a reckoning with Evergrande's issues.

Sales are down. Construction on some projects has been halted over delayed payments. And the company’s offices in China have been besieged for weeks by angry protesters, many of them employees, who worry they may not recover their investments in Evergrande properties and financial products.

Beijing is reportedly asking local officials to prepare for the fallout from a total collapse.

More:
https://www.nbcnews.com/news/world/what-evergrande-chinese-property-giant-behind-global-selloff-fears-n1279929

Right_in_Virginia · « **Reply #1 on:** September 23, 2021, 03:14:45 pm »

https://mobile.twitter.com/zerohedge/status/1441010617549262848

Right_in_Virginia · « **Reply #2 on:** September 23, 2021, 03:16:51 pm »

https://mobile.twitter.com/JackPosobiec/status/1441041152816340997

Hoodat · « **Reply #3 on:** September 23, 2021, 03:22:58 pm »

Quote from: Right_in_Virginia on September 23, 2021, 03:09:04 pm

What is Evergrande?

It is a company that no investor with any integrity should be investing in. Caveat emptor.

If you were stupid enough to invest in a company that does not follow any rules, then you deserve what you get. It is no different from those who gave their money to Bernie Madoff. They did so with the expectation that Madoff had inside information - that he was operating outside the rules and reaping ill gotten gains. Same with Evergrande investors.

The biggest lie of 2009 was that a company was too big to fail (or too big to be allowed to fail). It was a lie then, and it continues to be a lie now.

Kamaji · « **Reply #4 on:** September 23, 2021, 03:45:39 pm »

How much of the Evergrande debt is held outside of China?

catfish1957 · « **Reply #5 on:** September 24, 2021, 06:04:13 pm »

Medium to long treasury rates are up 2 and 3% repsectfully. And of course that inversely impacts their par value price. Good Corporate Bonds are rising at near the same rates. Junk paper is strangely flat today, and recent drops may already have the Evergrande event factored in.

Overall?

Add the fact market has recovered to it's ridiculous 34K DJIA?

When Biden got elected, I was on the fence 50/50 on whether the upcoming disaster would be (both unprecedented) a market crash or mass hyperinflation. I am now running on the side of 60/40 toward the inflation scenario. If the dims get their way, I understand the national debt may exceed 105% of GDP. Many have said that that is the tipping point.

One other fact that I am sharing that should be scaring everyone. I can not find anywhere that is selling gold at spot +10. I thnk the panic may be starting.

Right_in_Virginia · « **Reply #6 on:** October 11, 2021, 01:01:53 pm »

https://mobile.twitter.com/JackPosobiec/status/1447515033265704962

catfish1957 · « **Reply #7 on:** October 11, 2021, 01:09:32 pm »

Quote from: Right_in_Virginia on October 11, 2021, 01:01:53 pm

https://mobile.twitter.com/JackPosobiec/status/1447515033265704962

$5T

WTH? This can't be right.

To put it in perspective, our similar bubble back in '08-'09 only ran a half a Trillion when it was said and done. And that was overspent IMO.
What is scary, is that the Chicoms are going to have to find another place to absorb that debt. crisis. My bet is that they first liquidate their $1.1T in U.S. Bonds, and other Western debt. If this is the true number, The Catfish crash concern has been raised to DEFCON 4

Right_in_Virginia · « **Reply #8 on:** October 11, 2021, 01:16:59 pm »

It is what the Wall Street Journal is reporting @catfish1957

https://www.wsj.com/articles/beyond-evergrande-chinas-property-market-faces-a-5-trillion-reckoning-11633882048?redirect=amp#click=https://t.co/vVkQFHHLn6

catfish1957 · « **Reply #9 on:** October 11, 2021, 01:19:27 pm »

Quote from: catfish1957 on October 11, 2021, 01:09:32 pm

$5T

WTH? This can't be right.

To put it in perspective, our similar bubble back in '08-'09 only ran a half a Trillion when it was said and done. And that was overspent IMO.
What is scary, is that the Chicoms are going to have to find another place to absorb that debt. crisis. My bet is that they first liquidate their $1.1T in U.S. Bonds, and other Western debt. If this is the true number, The Catfish crash concern has been raised to DEFCON 4

Or another thought that crossed my mind. Since the Chicoms are relatively new at this captialism thingy, I wonder if they may go "scorched earth" and do a massive currency devaluation. Considering their world standing financially, they could bring the world down to its knees economically and reap the benefits by combing through the ashes.

We are talking disaster movie type Dystopia folks.

Right_in_Virginia · « **Reply #10 on:** October 11, 2021, 01:21:22 pm »

https://mobile.twitter.com/unhelpfultwit/status/1447515679901552643

skeeter · « **Reply #11 on:** October 11, 2021, 01:27:04 pm »

Quote from: catfish1957 on October 11, 2021, 01:09:32 pm

$5T

WTH? This can't be right.

To put it in perspective, our similar bubble back in '08-'09 only ran a half a Trillion when it was said and done. And that was overspent IMO.
What is scary, is that the Chicoms are going to have to find another place to absorb that debt. crisis. My bet is that they first liquidate their $1.1T in U.S. Bonds, and other Western debt. If this is the true number, The Catfish crash concern has been raised to DEFCON 4

Coincidentally, just happens to be the same amount the rats want to blow on "infrastructure" spending. In addition to the 10 Trillion in extra spending over the past year.

catfish1957 · « **Reply #12 on:** October 11, 2021, 01:30:07 pm »

Quote from: Right_in_Virginia on October 11, 2021, 01:16:59 pm

It is what the Wall Street Journal is reporting @catfish1957

https://www.wsj.com/articles/beyond-evergrande-chinas-property-market-faces-a-5-trillion-reckoning-11633882048?redirect=amp#click=https://t.co/vVkQFHHLn6

Sources don't get much more reliable than that, and I trust WSJ pretty much 98% of the time. Like I said... on scale this would be like total QE X 10. I really don't think that 99% of the general public understands the dangers and ramifications here. Really surprised the Kudlows & Sowells, et. al haven't raised the Red Alert on this particular issue.

Need to remind self ....more gold/silver today.

Right_in_Virginia · « **Reply #13 on:** October 11, 2021, 01:34:29 pm »

https://mobile.twitter.com/bababill9/status/1447548505904533507

catfish1957 · « **Reply #14 on:** October 11, 2021, 01:36:20 pm »

Wow... and think of the blabbering blithering inept idiot at the WH. This is turning into the perfect storm.

catfish1957 · « **Reply #15 on:** October 11, 2021, 01:39:45 pm »

Quote from: Right_in_Virginia on October 11, 2021, 01:34:29 pm

https://mobile.twitter.com/bababill9/status/1447548505904533507

re: 2nd tweet.

Wow, if that is true, the world just might have fallen for the biggest Ponzi Scheme in World history. i.e. Hey Capitalism..... You've been Punked!!!!!

IsailedawayfromFR · « **Reply #16 on:** October 12, 2021, 03:01:10 am »

Quote from: Hoodat on September 23, 2021, 03:22:58 pm

It is a company that no investor with any integrity should be investing in. Caveat emptor.

If you were stupid enough to invest in a company that does not follow any rules, then you deserve what you get. It is no different from those who gave their money to Bernie Madoff. They did so with the expectation that Madoff had inside information - that he was operating outside the rules and reaping ill gotten gains. Same with Evergrande investors.

The biggest lie of 2009 was that a company was too big to fail (or too big to be allowed to fail). It was a lie then, and it continues to be a lie now.

Why I will never invest in Chinese companies

Free Vulcan · « **Reply #17 on:** October 12, 2021, 03:42:29 am »

sneakypete · « **Reply #18 on:** October 12, 2021, 04:16:04 am »

Quote from: Kamaji on September 23, 2021, 03:45:39 pm

How much of the Evergrande debt is held outside of China?

@Kamaji

Good question!

You can also bet that relatives of the ruling class in China were early "investors" (you gimme stock or I will have your family executed!),and most likely the ones responsible for them going broke because they stole all the money,and WHO in China is going to try to charge or arrest them?

sneakypete · « **Reply #19 on:** October 12, 2021, 04:19:01 am »

Quote from: catfish1957 on October 11, 2021, 01:09:32 pm

$5T

WTH? This can't be right.

To put it in perspective, our similar bubble back in '08-'09 only ran a half a Trillion when it was said and done. And that was overspent IMO.
What is scary, is that the Chicoms are going to have to find another place to absorb that debt. crisis. My bet is that they first liquidate their $1.1T in U.S. Bonds, and other Western debt. If this is the true number, The Catfish crash concern has been raised to DEFCON 4

@catfish1957

I don't even understand 10 percent of what you wrote,and I agree with it.

BTW,the one thing I DO understand is that this sort of thing NEVER happens by accident.

sneakypete · « **Reply #20 on:** October 12, 2021, 04:22:07 am »

Quote from: catfish1957 on October 11, 2021, 01:36:20 pm

Wow... and think of the blabbering blithering inept idiot at the WH. This is turning into the perfect storm.

@catfish1957

You mean "What,ME worry" Joe Biden?

He won't even notice,and if someone tells him,he won't understand.

Why else do you think everybody else suddenly dropped out of the Dim race for President,and the Dims turned the reins over to him and de ho?

Hoodat · « **Reply #21 on:** October 12, 2021, 04:23:15 am »

Quote from: catfish1957 on October 11, 2021, 01:39:45 pm

re: 2nd tweet.

Wow, if that is true, the world just might have fallen for the biggest Ponzi Scheme in World history. i.e. Hey Capitalism..... You've been Punked!!!!!

Social Security is the biggest Ponzi scheme in world history.

catfish1957 · « **Reply #22 on:** October 12, 2021, 04:41:43 am »

Quote from: Hoodat on October 12, 2021, 04:23:15 am

Social Security is the biggest Ponzi scheme in world history.

You got that one right.

catfish1957 · « **Reply #23 on:** October 12, 2021, 04:58:39 am »

Quote from: sneakypete on October 12, 2021, 04:19:01 am

@catfish1957

I don't even understand 10 percent of what you wrote,and I agree with it.

BTW,the one thing I DO understand is that this sort of thing NEVER happens by accident.

@sneakypete

Pete....

Remember that point in late 2008 about election time, when there was that financial panic? That was due to speculative real estate dervivatives that were for the most part being funded by junk paper. Some of these bonds, again based on speculation got stupidly pricey. When that bubble burst, there was a mad rush liquidate those bonds, they crashed, often a quarter or less on par value.This plunge took many high profile (remember the term..... too big to fail?) financial institutions down with them. Well that, until we got governemnt intervention, and the money started pouring in on the bail outs, as direct funding to the guilty. Then add QE (Qualitative Easing) monetary infusion for everyone else who got smacked as collateral damage by keeping equity prices afloat.

When the smoke cleared it, it was estimated that this debacle cost the American Taxpayer about $500 Billion So just think about it..... This one, and with just one Chicom financial institution alone is estimated to be $5 Trillion (with a T).

Right_in_Virginia · « **Reply #24 on:** November 10, 2021, 06:11:11 pm »

https://mobile.twitter.com/MarketRebels/status/1458489683911094274