Utopia Talk / Politics / Another Chinese contagion?

Nimatzo iChihuaha	Sat Sep 18 07:25:58 300 billion in debt. Chinese property giant Evergrande is on the brink of collapse, and analysts warn the potential fallout could have far-reaching implications that spill outside China’s borders. “Evergrande’s collapse would be the biggest test that China’s financial system has faced in years,” says Mark Williams, chief Asia economist at Capital Economics. http://www...efault-and-investor-risks.html Don't what-about the USA.
Rugian Member	Sat Sep 18 07:31:08 Fingers crossed that they do collapse. Steel, concrete, and roofing materials pricing has been absolutely insane over the last year, but if these guys go under that would no doubt improve.
TheChildren Member	Sat Sep 18 07:36:07 what da first contagion. lehman? go remove that fungus from ur azz.
Nimatzo iChihuaha	Sat Sep 18 07:38:09 Your mother already does that with her tongue. Oh snap!
Nimatzo iChihuaha	Sat Sep 18 07:39:08 But yea, some people are calling this the Lehman brother moment of China.
TheChildren Member	Sat Sep 18 07:41:00 ur great grandmother put that fungus on ur azz when she fingered u. but yea lehman neva left ur country.
Nimatzo iChihuaha	Sat Sep 18 07:50:38 I never knew my great grand mothers, at least not as intimately as I know your mother. Lehman was never in my country.
TheChildren Member	Sat Sep 18 08:32:43 haha u wish u didnt know. coz those days became nightmares 4 u and now u blocked it out of ur head. that smelly funguz didnt got there coz u neva wipe ur azz. and lehman effect has been in every country so stop ur whinin
Habebe Member	Sat Sep 18 14:14:36 http://en.m.wikipedia.org/wiki/Evergrande_Group Heres the wiki.
Habebe Member	Sat Sep 18 14:16:57 Here is an updated set of numbers. The Week in Numbers: not so grand for Evergrande 09/17/2021 | 09:39am From a Chinese giant on the brink, to a stock market ace from Roger Federer, this is the Week in Numbers. First up... $305 billion is the pile of liabilities weighing on Chinese property giant Evergrande. Amid warnings that it could collapse, investors and vendors this week protested at company HQ, demanding their money back. "I'm at Evergrande now. I feel like a beggar." Markets and mandarins are jittery too. If Evergrande does go down, no one is quite sure what might go down with it. About $11 billion is the price of Roger Federer's shoes. Or it was the debut-day value of On - the sneaker brand that counts the tennis ace as an investor. Shares in the Swiss firm popped 50% on their first day of trade in New York. 43,610 is how many new jets Boeing thinks the world's airlines will buy over the next 20 years, up 500 on a prediction it made in the depths of the global health crisis. That would be business worth around $7.2 trillion. $60 billion dollars is how much Microsoft will spend buying back shares. That comes after similar moves by fellow tech titans Apple and Alphabet. And it gets in ahead of proposals by Democrat lawmakers to tax stock buybacks to help fund infrastructure investment. And 20,000 miles is the length of the new super railway in North America. That after Canadian Pacific struck a $27.2 billion deal to buy Kansas City Southern. That creates the first direct railroad connecting Canada, the U.S. and Mexico. It also ended a high-stakes bid battle with rival Canadian National. http://www...grand-for-Evergrande-36454462/
Habebe Member	Sat Sep 18 14:18:21 Someone can delete that last post, My bad for just skimming at first.
TheChildren Member	Sat Sep 18 14:46:12 we dunt care rofl this thing has been playin out 4 years now. thats yearSSS.
Habebe Member	Sat Sep 18 14:47:41 So, since 2018 its been considered the the worlds most valuable real estate company, 2nd in China by volume, they mostly build middle and upper class homes. Monday they wont have the money to pay their debt payment, 1.5 million deposits will be lost, a bunch of people may not have purchased homes finished. I think a bigger problem is the timing, its still pretty fragile economy, tradewars have taken their toll and chinas economic growth has largely been construction, and shit loads in it. Their not the first to seek growth by building, and use it as both a personal investment and a tool to boost the economy at an unsustainable rate. IDK how big of a ripple it will make.
Nimatzo iChihuaha	Mon Sep 20 05:03:48 Fear of the contagion has spread.
Cloud Strife Member	Mon Sep 20 05:20:56 `But yea, some people are calling this the Lehman brother moment of China. ' Those people are morons. People are looking for a reason to lower prices on many "inflated" assets. This will do as well as anything else as a reason to panic, I guess. Ultimately, the effects of this on the Chinese banking system (and hence the Chinese economy and whatever else in the world that would be contagion) will be relatively minor. A default is likely, but the level of payments that are being missed now are measured in millions, while there is 300 Billion $ total in Evergrande debt. Evergrande has the real assets to cover that (or at least enough that any haircuts are minor) in a bankruptcy. Restructuring is relatively straightforward, and is something the Chinese have done with similar enterprises in the past with no ill lasting effects. The bigger issues are mostly angry customers, upset about not having their money or the real estate they paid for. They are a bit more difficult to make whole, but any "bailout" to do so can be accomplished with a relatively light touch. At this point, the CCP is waiting for things to happen, and select a good time to swoop in and be the hero. They have also had a vested interest in reducing leverage and speculation in real estate, as well as a more difficult time of diversifying Chinese portfolios out of real estate. Those valuations will take a hit, should take a hit, and Chinese policy is to reduce those valuations for long term economic health, so it's far better to put that negative PR on a failing development conglomerate than on premature government intervention.
Habebe Member	Mon Sep 20 05:52:59 Cloud strife, That sounds realistic. I guess its more a matter of , did the policy makers hit the targets and just take a minor speculative dip or did they underestimate its effect on the industry as a whole, is this a bubble bursting.
Cloud Strife Member	Mon Sep 20 06:16:37 Bubbles are finicky things, ready to pop for whatever reason, whether it be good or not. Or as the Hemingway quote goes about going broke, "Two ways. First slowly, and then all at once." The big plus here, is that while 2008/Lehman had crazy derivative MBS, that were terribly difficult to value, and had to depreciate harshly after having stupidly lax lending conditions; the Chinese mortgage system in 2021 is reasonably regulated, so the valuations/liquidity of debt isn't going to be a nightmare.
Nimatzo iChihuaha	Mon Sep 20 13:15:08 Chinese Property Developer Sinic Halts Trading After Sinking 87% source: Bloomberg
Cloud Strife Member	Mon Sep 20 13:19:34 Yep, the whole sector has been tanking for a while.
Cloud Strife Member	Mon Sep 20 13:25:46 Credit Default Swaps are still not badly priced. Decently high in China, but nothing alarming (yet, at least), and only moderately increased (still well within normal day to day levels) outside of China. If there were bigger effects, that would be where they would most naturally be priced in.
Habebe Member	Mon Sep 20 15:56:38 Evergrande is 2% GDP. The industry is I think* 20%.
Habebe Member	Mon Sep 20 16:02:51 Fearmongering as always, my favorite headline is "Worst trading day since July" So a few weeks ago.
Nimatzo iChihuaha	Mon Sep 20 16:16:06 What are you talking about?! This is the worst day trading since last week!
murder Member	Mon Sep 20 18:20:37 "Chinese Property Developer Sinic Halts Trading After Sinking 87%" HODL! I'm going to buy up as many cheap shares as I can and be a billionaire by next week. :o)
nhill Member	Mon Sep 20 19:06:24 Lol, now is a good time to *slowly* accumulate Chinese blue chip stocks, e.g. Alibaba, that will be bought hard once this blows over. I’d avoid Sinic though. ;)
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