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Started By
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China Makes Preparations for Evergrande’s Demise; prepare for a ‘possible storm’
Posted on 9/23/21 at 6:28 am
Posted on 9/23/21 at 6:28 am
quote:
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’
Wall Street Journal
Chinese authorities are asking local governments to prepare for the potential downfall of China Evergrande Group, EGRNF 25.08% according to officials familiar with the discussions, signaling a reluctance to bail out the debt-saddled property developer while bracing for any economic and social fallout from the company’s travails.
The officials characterized the actions being ordered as “getting ready for the possible storm,” saying that local-level government agencies and state-owned enterprises have been instructed to step in only at the last minute should Evergrande fail to manage its affairs in an orderly fashion.
They said that local governments have been tasked with preventing unrest and mitigating the ripple effect on home buyers and the broader economy, for example by limiting job losses—scenarios that have grown in likelihood as Evergrande’s situation has worsened.
Looks like China’s second largest real estate developer is about to go belly up. Could have a major impact on their economy. Evergrande’s debt is up to about $305 billion. Foreign investors are likely to be one of the first in line to be screwed when Evergrande defaults.
13
Posted on 9/23/21 at 6:33 am to dewster
What will be the second order effects?
Posted on 9/23/21 at 6:34 am to dewster
IB Freeman will not like this.
Posted on 9/23/21 at 6:38 am to dewster
What property does Evergrande own int the US. Always looking for a firesale deal.
Posted on 9/23/21 at 6:43 am to dewster
How does a Chinese property company going belly up affect us?
:ExplainItToMeLikeIma5YearOldgif:
:ExplainItToMeLikeIma5YearOldgif:
Posted on 9/23/21 at 6:49 am to LazloHollyfeld
The US government will buy it above market price and give the houses to people on welfare.
Posted on 9/23/21 at 6:58 am to East Coast Band
Plenty of American investors invest in foreign companies to spread out their investments. Many Americans invest in those funds and what not at least partially.
Similar to how the US housing market affected the whole world.
Similar to how the US housing market affected the whole world.
Posted on 9/23/21 at 7:04 am to Gifman
quote:
IB Freeman will not like this.
The days of me caring what that Chinese sympathizer thinks have certainly come to a middle.
Posted on 9/23/21 at 7:05 am to dewster
The shorts are going to cleanup with this news
Posted on 9/23/21 at 7:08 am to Gifman
quote:
IB Freeman will not like this.
Why? I don't think he's ever said Chinese RE was a sound investment.
The internal discussions around Pooh must be intense right now. If they let this company fall, then it shows a major crack in the Chinese economy that everyone knew was there but China arrogantly dismissed for like 10 years. It may also cause major negative effects across the entire economy and stunt foreign investment.
On the flip side, if they bail this company out, it still shows the same weakness but could starve off the larger collapse...but then they'd be setting a precedent for all of them, which they probably can't afford. It had to be so enticing, though.
Posted on 9/23/21 at 7:12 am to jlovel7
quote:
Plenty of American investors invest in foreign companies to spread out their investments. Many Americans invest in those funds and what not at least partially.
Any American who knowingly invests in China deserves this. If unknowingly, they should have known.
Posted on 9/23/21 at 7:12 am to East Coast Band
quote:
How does a Chinese property company going belly up affect us?
China is the 2nd largest economy in the world. There would be a ripple effect that could lead to our economy showing how much we too have artificially propped our economy up for the past decade.
Posted on 9/23/21 at 7:17 am to SlowFlowPro
quote:
shows a major crack in the Chinese economy that everyone knew was there but China arrogantly dismissed for like 10 years
Dude, our economy is in the same position. The Fed has done some questionable things to keep it propped up. Keeping rates low for way too long is only a small part of what they have done to keep it rolling along. We have a recession coming too. China may kick it off for us.
Posted on 9/23/21 at 7:18 am to SlowFlowPro
Alternatively, allowing Evergrande to collapse would help the Chicoms combat the rising wages that are slowing their economic growth. While their SEI program has been effective in capturing a disturbing amount of intellectual property, they're still very much a basic manufacturing based economy that relies on cheap labor.
Posted on 9/23/21 at 7:20 am to stout
quote:
Dude, our economy is in the same position.
I'm not arguing differently
The biggest difference, especially with this example, is that we're actually producing stuff. This Chinese real estate is worthless. Even with 2008, the houses had value but they were just over-leveraged based on an artificially high value.
This Chinese RE is legit shite and falls apart in 5 years.
Posted on 9/23/21 at 7:21 am to dewster
can someone explain to me what's happening (and what the potential fall out could/will be) like i am five? tia
Posted on 9/23/21 at 7:21 am to East Coast Band
Big US Banks have exposure to China and Evergrande.
US companies that do a lot of business in China could get hit if they fall into recession - companies like Nike, Apple etc
US companies that do a lot of business in China could get hit if they fall into recession - companies like Nike, Apple etc
This post was edited on 9/23/21 at 7:23 am
Posted on 9/23/21 at 7:22 am to Snazzmeister
quote:
Alternatively, allowing Evergrande to collapse would help the Chicoms combat the rising wages that are slowing their economic growth. While their SEI program has been effective in capturing a disturbing amount of intellectual property, they're still very much a basic manufacturing based economy that relies on cheap labor.
And this RE bullshite was a way for them to appear to be part of an investing/finance economy. If that bubble pops, their economy may go back 20+ years b/c yes, they're primarily a manufacturing market. That's kind of what I was referencing above when I said that we still produce stuff that isn't worthless real estate, so our ledge is a lot lower.
Posted on 9/23/21 at 7:23 am to GreatLakesTiger24
quote:
can someone explain to me what's happening (and what the potential fall out could/will be) like i am five? tia
China has created a false, paper tiger economy the past 20 years or so by over-building.
This over-building is based on debt.
Evergrande is a huge real estate conglomerate that is having problems paying back its debt. Almost missed a crucial payment.
The Chinese government is trying to figure out what to do with Evergrande, especially in light of the larger RE bubble issue.
It feels like the Chinese RE bubble is about to pop.
Posted on 9/23/21 at 7:24 am to dewster
How long before Dementia Joe and the Dims blame this all on Climate Change and offer China billions in aid?
Of course, that will all depend upon when China demands that Raping Joe pay back that bribe they gave Crackhead Hunter.
Of course, that will all depend upon when China demands that Raping Joe pay back that bribe they gave Crackhead Hunter.
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