Evergrande Situation

[dj230]

I'm not a real estate guy but this has been all over the news for a week now, surprised no thread about it and thought i'd start one to see peoples thoughts on how it'll affect global markets

 

[rott]

Well according to Bloomberg the world's top 500 have dropped $135 billion in a week so I think there will soon be people on here discussing what's going on. 

This can only be the lull before the storm. 

[Pravda]

My opinion.

 

The printing presses will start working overtime, so everything that crashed in the past few days will go to the moon. That includes the absolute bottom of the barrel crypto.

 

 

[Neeranam]

The CHinese govt. will bail them out to stop a similar thing that happened to Lehman in 2008.

[CrunchWrapSupreme]

I'm no expert either, but it certainly is interesting, lamentable, and foreboding. I've been following the YouTube coverage. Angry investors protesting at the head office, screaming, breaking down at having lost everything. Most look like regular folks, persuaded into risking their life savings after being promised ridiculous returns, much like the Thai scams we hear about here. The theories of what's going on are abound, mostly involving the ties between this and the Chinese "ghost cities", property that just sits with no purpose other than speculation, shilling, and just how much of that cash sitting in their banks is actually "real", a problem now plaguing the world.

[fdsa]

3 hours ago, Pravda said:

The printing presses will start working overtime, so everything that crashed in the past few days will go to the moon. That includes the absolute bottom of the barrel crypto.

this.

I feel new billions USD are going to be printed thus cryptos exchange rates will continue to rise.

[Johnny Mac]

The general consensus seems to be the Chinese gov will step in, as they will not want it effecting the wider economy and having a massive <deleted> storm on their hands. they won't be happy though and some people will most likely 'disappear'

[Delight]

One possible way out:

1) Allow Evergrande to collapse. They will bring many Chinese banks with them.

The shares in these banks will dramatically fall.

When the Chinese authorities think that they are at rock bottom -then the Chinese will buy them.

After some time -when the markets realize this -then the prices will rise

The Chinese  authorities will sell at peak price.

 

2) Assure those who have paid deposits-that their money is safe.

As a gesture they could reset the permit such that the 70 years starts when the buildings are formally opened

 

3 ) The Chinese government to purchase some or all of the unfinished projects. Maybe at 80% discount.

4) Using the profit from the bank shares transaction plus more-finish the projects

 

Who wins 

 

The Chinese government.

Those who submitted deposits.

Most  of the 200,000 employees.

 

Who loses

The external contractors

 

The overseas investors

 

Evergrande dies!

[ozimoron]

I doubt that Evergrande gets bailed out. The Shanghai stock market opens in a few hours after a 3 day break.

 

[soi3eddie]

The day of reckoning (globally) gets closer...

[dj230]

meh not too worried, was mainly concerned about the effect on the stock market, im not invested in any china stocks or stocks involving china though but worried it'd trickle, i know a guy who has sources in china, said government will keep the issue in china but will effect growth, hope hes right

[talahtnut]

 

Its the plan to introduce negative interest rates and expiration-day money,

to control demand in the economy and make sure nobody can save their

way out of slavery. You get your tokens and you spend them all at the

company store by the month's end.

[ExpatOilWorker]

18 hours ago, Neeranam said:

The CHinese govt. will bail them out to stop a similar thing that happened to Lehman in 2008.

Not so sure about that. Evergrande is about to default on their dollar loans and I don't think Beijing is interested in spending their foreign reserve on pleasing some international investors. 

Beijing might want to help Evergrande so the 1.5 million home owners with half finished condos don't go bananas, but at the safe time they might shaft the international investors. Let's see in the next few weeks.

[Leveraged]

Evergrandes problems are already effecting most US indexes in a negative way. I personally hope it all falls down. The US stock market has been ridiculously overpriced for a while now, fueled by Biden’s unnecessary trillions pumped into the US economy, which is both sending inflation through the roof and creating a precarious position for any investors, especially those on the verge of retirement. 
 

There’s a serious market correction on the horizon and all it’s going to take to trigger it is an issue like  Chinese corruption and market manipulation into the fray to send it all down for a while. 
 

For long term investors like me it’s a boon as I still have a while in the market before it matters, so I can keep buying in and the low potential prices are great - if/when they crash. 
 

For retirees relying on their portfolio right now? I’d be worried and cautious. For people with a long time horizon? Keep buying. 
 

 

[scubascuba3]

4 hours ago, ExpatOilWorker said:

Not so sure about that. Evergrande is about to default on their dollar loans and I don't think Beijing is interested in spending their foreign reserve on pleasing some international investors. 

Beijing might want to help Evergrande so the 1.5 million home owners with half finished condos don't go bananas, but at the safe time they might shaft the international investors. Let's see in the next few weeks.

Bailing out banks is controversial enough but bailing out a property company unlikely, let's see what else gets taken down

[dj230]

6 hours ago, Leveraged said:

Evergrandes problems are already effecting most US indexes in a negative way. I personally hope it all falls down. The US stock market has been ridiculously overpriced for a while now, fueled by Biden’s unnecessary trillions pumped into the US economy, which is both sending inflation through the roof and creating a precarious position for any investors, especially those on the verge of retirement. 
 

There’s a serious market correction on the horizon and all it’s going to take to trigger it is an issue like  Chinese corruption and market manipulation into the fray to send it all down for a while. 
 

For long term investors like me it’s a boon as I still have a while in the market before it matters, so I can keep buying in and the low potential prices are great - if/when they crash. 
 

For retirees relying on their portfolio right now? I’d be worried and cautious. For people with a long time horizon? Keep buying. 
 

 

Global markets were barely affected, but we will see, I would assume stocks dependant on China growth and anything tied to Everglades situation directly to be affected. 

[In Full Agreement]

22 hours ago, Johnny Mac said:

they won't be happy though and some people will most likely 'disappear'

 

Just ask the guy in charge of the Chinese  factory that produced the tainted powder milk.    Oh wait, he's kind of mum at the moment about the matter.

 

[Cake Monster]

The main issue that could possibly affect those of us residing in Thailand, is how much possible exposure have the Thai Financial Institutions to the Evergrande situation.

If there are some large investments from Thai Banks there could be a massive knock on here also.

[ThailandRyan]

Isn't Evergrande also building in Austrailia as well? That begs the question about the local investors in AUS as well as workers.

[Leveraged]

20 minutes ago, dj230 said:

Global markets were barely affected, but we will see, I would assume stocks dependant on China growth and anything tied to Everglades situation directly to be affected. 

Both US and International indexes have taken a pretty good hit, knocking back several months worth of gains. 

[dj230]

2 hours ago, Leveraged said:

Both US and International indexes have taken a pretty good hit, knocking back several months worth of gains. 

you mean the s&p500 pulled back less 2% it's up like 20% year to date?

asian markets were down about the same but have since rebounded some already, as well as european markets

[dj230]

Missed the news this morning as I just checked with us markets opening but a news report said evergrande stated they’ll make the interest payment this month on offshore bonds

 

 

[ExpatOilWorker]

13 hours ago, dj230 said:

Missed the news this morning as I just checked with us markets opening but a news report said evergrande stated they’ll make the interest payment this month on offshore bonds

 

 

Sound like Evergrande's biggest talent is lying.

They are going down the drain.

Bloomberg Markets and Finance: Evergrande Misses Two Debt Payments.
https://www.youtube.com/watch?v=3-GBc4N7fw8

[dj230]

6 hours ago, ExpatOilWorker said:

Sound like Evergrande's biggest talent is lying.

They are going down the drain.

Bloomberg Markets and Finance: Evergrande Misses Two Debt Payments.
https://www.youtube.com/watch?v=3-GBc4N7fw8

They already made the payment for foreign bonds 

 

They still have more payments, but considering the stock just rallied 25% and my China source tells me it’s being taken care of by the government to keep the issue in China, I have no worries. 
 

maybe a different issue if you’re invested in China or real estate though, I’m not invested in either

[ExpatOilWorker]

3 hours ago, dj230 said:

They already made the payment for foreign bonds 

 

They still have more payments, but considering the stock just rallied 25% and my China source tells me it’s being taken care of by the government to keep the issue in China, I have no worries. 
 

maybe a different issue if you’re invested in China or real estate though, I’m not invested in either

That means uncertainty still surrounds whether Evergrande can pay an $83.5m dollar bond payment due on Thursday.  It has another $47.5m payment due on September 29 for March 2024 notes.

 

https://www.aljazeera.com/economy/2021/9/22/chinas-evergrande-says-will-make-a-scheduled-payment

[dj230]

19 minutes ago, ExpatOilWorker said:

That means uncertainty still surrounds whether Evergrande can pay an $83.5m dollar bond payment due on Thursday.  It has another $47.5m payment due on September 29 for March 2024 notes.

 

https://www.aljazeera.com/economy/2021/9/22/chinas-evergrande-says-will-make-a-scheduled-payment

Typical articles like this to catch clicks I never read, why? Sometimes when you get too much noise/inaccurate information, it makes you make bad decisions. 

 

They made their foreign bond interest payment, clearly they're still able to raise cash and if they were planning to just let things go down they wouldn't have made the payment. 

 

They can still default on a loan, but it's not a worry of mine anymore as I have confirmed it will have little to nothing to do with my investments. 

[mfd101]

Everything depends on how skillfully the Chinese authorities wind back the ponzi scheme. If panic sets in, everything crashes (property is 27% of China's GDP).

 

I watched a couple of days ago a video as some 15 new but empty high-rise apartment buildings were dynamited (Suzhou, I think).

 

I remember arriving in a small (1 million) city in NW China in 2010. The railway station was huge, gleaming new, but the only train in the station was my one. I inquired about this and was told: No worries, there'll be 10 million people here in 5 years ...

[ExpatOilWorker]

11 hours ago, mfd101 said:

I watched a couple of days ago a video as some 15 new but empty high-rise apartment buildings were dynamited (Suzhou, I think).

https://www.firstpost.com/world/watch-15-skyscrapers-demolished-all-at-once-in-china-jaw-dropping-moment-caught-on-camera-9974541.html

[ExpatOilWorker]

13 hours ago, dj230 said:

They made their foreign bond interest payment,

Do you have anything to support your claim?

 

HONG KONG/SINGAPORE, Sept 23 (Reuters) - China Evergrande Group (3333.HK) dollar bondholders were still waiting for information about a key interest payment due Thursday, with some holders having given up hope of getting a coupon payment by the deadline, a source familiar with the matter said.

 

https://www.reuters.com/world/china/chinas-evergrande-faces-key-deadline-investors-await-outcome-2021-09-23/

[mfd101]

Article in today's 'Australian', headed "China makes preparations for E's demise"

 

"Chinese authorities are asking local governments to prepare for the potential downfall of China Evergrande Group, according to officials familiar with the discussions, signalling a reluctance to bail out the debt-saddled property developer while bracing for any economic and social fallout from the company’s travails."

 

And lots more detail ...