Black Monday

[Balance]

So no need to worry because Xi will act against his own three red lines from last year and save the day?

Surely its as likely a few bankruptcies and fire sales are an intended or at least acceptable consequence of those three red lines?

Put it this way - as the article highlighted, almost all of the major China lending banks are owned by the government.

In the event of default, the banks will end up owning the companies. So the government will in effect own the companies at loan values - ie. bye bye equity & billionaires. Right up Xi’s playbook?

[nztx]

We can all become Japan - 300% debt to gdp.

Their mistake was not letting in a moderate amount of inflation though. Theres no reason inflation should be below 2%.

Has Robertson managed to reach that milestone for us yet - or a few more lockdowns needed ?

[Panda-NZ-]

The credit rating is a good metric .

NZ: AAA/AA+
Japan: A

[Jaa]

Put it this way - as the article highlighted, almost all of the major China lending banks are owned by the government.

In the event of default, the banks will end up owning the companies. So the government will in effect own the companies at loan values - ie. bye bye equity & billionaires. Right up Xi’s playbook?

Agreed. That part makes sense. Praiseworthy even.

What then happens then to the debt holders and the smalltime Evergrande "wealth management" investors protesting at the HQ? My guess of paying the Yuan holders and stiffing the USD holders is looking right so far.

The contagion risk comes from Chinese investors losing faith in property all at once and especially in unbuilt apartments, necessitating fire sales by other developers and thus a downward spiral. That's the tightrope especially as:

Real estate products and services account for 29% of GDP. Ireland and Spain may have touched those levels before the [global financial crisis]; the U.S. at the peak was 15%.

Why the Evergrande Crisis Will Ripple Throughout China’s Economy,

[Tomtom]

However half of the american economy is also broken particuarly in the southern states. California has to carry and lift up the corpse of their conservatism.

Yes, again across western countries you'll see consumption sustained or increased with population growth but most of that growth is in people beyond retirement age.

It'll probably make investing a lot more challenging than the last few decades. It's taken almost no cognitive ability to invest at a reasonable return, even if you knew nothing about investing you could just buy property and wait. In a rising rate environment suddenly you really have to earn your returns.

[Jaa]

USD interest payment missed, they have 30 days to remedy the breach.

Employees also not paid at China Evergrande Nw Egy Vhc Grp Ltd. Popping of the EV bubble as well?

[nztx]

USD interest payment missed, they have 30 days to remedy the breach.

Employees also not paid at China Evergrande Nw Egy Vhc Grp Ltd. Popping of the EV bubble as well?

but wait - Barrons now come out with this:

Evergrande is facing another $47.5 million payment on its debt next week

heaped on top of the $83.5 million offshore bondholder interest suggested to be unpaid


Guess that's what happens when there's too much surplus loot to invest & rates are so attractive,
nothing like tossing a pile down a black hole, and then fire another pile in, in the hope that
all of it "Grandely" resurfaces mysteriously back out soon after and everything is sweet for Ever after

This year's large bonuses may be starting to look kaput in a few American Fund Investment Offices

The way things are going, it's looking like burnt eggs for some Bonds investors hoping for a top chinese
breakfast out of the kitchen IMO and a case of "we got your money, we not pay any interest & not a
thing you can do about it"

or maybe something like this -

"Would you like a fine haircut instead of breakfast ? - We can make it look like you have no hair at all"

[bull....]

evergrande contagion is the elephant in the room

A Look Inside The $52 Trillion Bubble That Has "Hijacked China's Economy

https://www.zerohedge.com/markets/lo...chinas-economy

[Old mate]

Unreal bull. Some pretty amazing stats in there.

[ronaldson]

I suggest you google an interview carried on Australia's ABC Television 5 days ago between journalist and presenter Stan Grant and a certain Victor Gao, VP of The Centre for China and Globalisation, a professor at Suzhou University and former translator for Chinese Leader Deng Xiaoping. 11 minutes that should be compulsory viewing - took less than 50 words to threaten Australia with nuclear attack! Make of it what you will but my take is that these are very dangerous people.