Evergrande: how far will the ripples reach?

This is like hearing that AIG are going to have layoffs next week back in 2008.

Badly thought out stimulus packages, Covid, over inflated property, excessive quantitative easing and meddling with currency and the precious metals and commodities markets are all chicken coming home to roost. This is going to be worse than 2008 ever was. More homelessness, more marriage breakdown, more alcoholism and social breakdown. Of course the government will be brilliant and bring in "co-ownership" for homes in arrears. This will fulfill the prophecy of UN Agenda 2030 (Oh its a real thing).

David Icke does seem so out of whack now?

For those of us who think this is a "Chinese problem" most Chinese debt is held by the United States. The US Dollar has been the reserve world currency for almost 100 years most last about 80, the empire is bursting at the seams. This is going to be more spectacular than the fall of Rome or Constantinople.

Is anything to be said for another mass?

XI cannot base GDP on a Ponzi scheme forever, thus the urgency to have the birth rate sharply increase.

Tofu dregs also plays it's way into the scenario.

There's something very satisfying about watching Pooh Bear's empire crumble.

Some say the 2008 crash was ended by rolling the bubble over into China infrastructure build out. If that is indeed true some black swans have come home to roost. Evergrande was the main developer building in Shenzhen, think went from 30,000 to nearly 13mil pop in 40-50 years. Anyhow it's now overlooking Hong Kong, nothing left to build on. The contagion now seems to have spread to Sunac, this developer is now in trouble and is mainly HK facing. The HK property market is generationally leveraged, now this Sunac must raise capital. Link to ZH article today

Kyle Bass did an interview last year on the knock on's of the HK market going south.

been a while since I watched this but western exposure is through HSBC>>>Deutsche Dank>>>Soft Bank>>> Silicone Valley/Tech, with multiple fractures off each.

This is just the tip IMO, the belt and road build out is financed via Chinese US treasure holdings, they go into a little country and 10x their treasure holdings with local banks to build out, now while the CCP may step in and bail out their own people to stem civil unrest the projects outside the country may be mothballed for years.

I can't imaging the remaining months of the year but it's gonna be interesting.

Beat it, Spike.

Looking at the news out of China? We are going to find out fairly soon just how far the ripples will reach.

The news around Evergrande is swirling and its all about default. It's going to be a hell of a week IMO. Nikkei premarket is down 2.5% and falling 😮  If the Evergrande debt is tied to CDS and other derivatives? It's going to get messy!

I've had an eye on China since late August and Evergrande and the local authority funding vehicles in particular since mid sept.

There is $8.2trillion in municipal and local authority debt funding that is heavily reliant upon continued Chinese GDP growth. Without growth?

Multiple Municipalities will find servicing AAA rated debt a struggle. When that debt falls due? Much of it is due to Chinese nationals, but a large portion of it is offshore and institutional. It was bought as "safe" exposure to China. It is anything but safe TBH. As an example? If an American city such as Detroit can be left go Bankrupt? If anyone thinks the CCP will step in to protect offshore funds, I think they are going to be very mistaken tbh.

Not integrated? Just take a look at who the holders of those bond notes are. They aren't just in non-receipt of the interest payment, they're also suffering (potential, for now) capital losses on the underlying value they paid for those bonds which are now valued in the 20s/30s compared to the 80-100 they paid for them.

Another possible sign of contagion today with fantasia missing a bond payment and being marked as likely to default.

Seems this is escalating. It looks like the end of China's insane growth. Great news. A brutal regime in a brutal country. They make the Nazis look like choir boys. Hopefully if goes really tits up and forces regime change. Unlikely though. The Chinese population are brainwashed beyond belief. It's basically like a bigger North Korea.

https://supchina.com/2021/10/26/modern-land-becomes-latest-chinese-developer-to-default-as-evergrande-grabs-lifelines/