Evergrande?

[daepp]

Originally Posted by jyl

Demographic ticking bomb there.

Hmm - I wonder why they refuse the vaccinate the elderly there...?

[jyl]

Originally Posted by daepp

Hmm - I wonder why they refuse the vaccinate the elderly there...?

That's not an accurate statement.

[jyl]

Originally Posted by jyl

Corporate Debt:
So, that’s some numbers on the debt side to think about. Not suggesting the US debt load isn’t heavy but China’s debt load is much heavier.

Looking a little deeper at the debt side, two reasons China's corporate debt is so large are:

1. China's government uses ostensibly "corporate" debt as a source of funding. Local governments use local government funding vehicles (LGFVs), local and central govts use state owned enterprises (SOEs), and then there are the Evergrandes, who borrow to buy land from local govts and have been perceived (until now?) as having govt backing. This debt is reported as "corporate" but actually serves government purposes.

2. China's government controls the banks, and uses debt to meet its growth targets. Whenever GDP growth looks to be at risk of missing the official 6% or 7% target, the CCP tells the banks to step up lending to corporates. Most of this lending goes to property development, since that's the fastest/easiest way to goose GDP.

China's debt problem is huge and deep-rooted.

It's not so much that today's debt, huge as it is, can't be serviced or worked out. The CCP controls the domestic banks that make the loans.

It's that the only way China can keeping growing at a high rate is through adding more and more debt funding projects that are less and less productive.

Naturally, the CCP would like to have foreign lenders fund more of this. Wiping Evergrande's foreign bondholders out is not going to help their cause.

[tabs]

Originally Posted by jyl

Looking a little deeper at the debt side, two reasons China's corporate debt is so large are:

1. China's government uses ostensibly "corporate" debt as a source of funding. Local governments use local government funding vehicles (LGFVs), local and central govts use state owned enterprises (SOEs), and then there are the Evergrandes, who borrow to buy land from local govts and have been perceived (until now?) as having govt backing. This debt is reported as "corporate" but actually serves government purposes.

2. China's government controls the banks, and uses debt to meet its growth targets. Whenever GDP growth looks to be at risk of missing the official 6% or 7% target, the CCP tells the banks to step up lending to corporates. Most of this lending goes to property development, since that's the fastest/easiest way to goose GDP.

China's debt problem is huge and deep-rooted.

It's not so much that today's debt, huge as it is, can't be serviced or worked out. The CCP controls the domestic banks that make the loans.

It's that the only way China can keeping growing at a high rate is through adding more and more debt funding projects that are less and less productive.

Naturally, the CCP would like to have foreign lenders fund more of this. Wiping Evergrande's foreign bondholders out is not going to help their cause.

Ahhh Foreign Lenders...do you remember the Opium Wars? Where China lost self determination for a century...well the Chinese do and have policies that make sure it doesnt happen again. Ever wonder why it is so difficult to invest in China? Well now you do.

In the USA Americans have QE and in China it is looser bank lending..both are designed to juice economies.

One of the problems here folks is your woefull Pollyanna perceptional mindsets.."When the Chinese need MORE growth they..." The reality is to keep from falling into the abyss of chaos the Chinese ..

The reality of the world is grim and horrific..here in the West we think it is optional as in avoidable..crying over every fallen leaf..
Omg a leaf has fallen. The west has grown soft..a bunch of pansies.

But dont worry.things have a way of evening out..

[tabs]

Do.any of you know what Mao.did with the millions of opium addicts that were in China when he took over? I can wait.

[jyl]

Local govts seizing Evergrande’s customer deposits for presold developments in their provinces, to prevent funds from being diverted away from construction.
https://amp.ft.com/content/595c3f50-755d-4dcc-afc3-4c993e50a936

[tabs]

Originally Posted by tabs

Do.any of you know what Mao.did with the millions of opium addicts that were in China when he took over? I can wait.

You Boyz just dont know anything do you?

[stevej37]

^^^ Packed them up and shipped em to Vegas?

[URY914]

https://news.yahoo.com/unpaid-evergrande-supplier-sells-porsche-122801306.html

[William930t]

The China debt crisis is now spreading beyond ​Evergrande

Shenzhen-based developer of luxury apartments, Fantasia Holdings has missed repaying $206 million worth of bonds that matured Monday. The company has also missed repaying a $109 million loan to Country Garden, China's second largest developer. How this plays out is going to be real interesting.

jyl: thanks for your insight

[pmax]

Originally Posted by William930t

The China debt crisis is now spreading beyond ​Evergrande

Shenzhen-based developer of luxury apartments, Fantasia Holdings has missed repaying $206 million worth of bonds that matured Monday. The company has also missed repaying a $109 million loan to Country Garden, China's second largest developer. How this plays out is going to be real interesting.

jyl: thanks for your insight

Everything over there is allowed to transpire by central command and control.

This is no different.

[LWJ]

Funny, I first asked back in Sept of 2021. Seems like the behemoth is moving. Downward.

I don’t really care about China or their economy, but this seems pretty darn large. My spider-sense says world economic impact.

Ok. So how to 1. Minimize losses and 2. Gain from this?

[Shaun @ Tru6]

Read this on Thursday.

China Evergrande, Giant Real Estate Firm, Files for U.S. Bankruptcy

The filing comes two years after the company defaulted on its debt, setting off defaults by smaller Chinese developers.