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[godhandiscen]

Evergrande, a property development company in China with a 300 Billion* marketcap has been mismanaged to shit and the CCP will not bail them out. Today the CCP told banks to not expect interest payment on Evergrande’s debts next week, essentially defaulting.

China Tells Banks Evergrande Won’t Pay Interest Next Week

Chinese authorities have told major lenders to China Evergrande Group not to expect interest payments due next week on bank loans, according to people familiar with the matter, taking the cash-strapped developer a step closer to one of the nation’s biggest debt restructurings.

www.bloomberg.com

Multiple strongholds of the Chinese economy have been failing since the pandemic started, and the CCP just bailed out one of the largest banks after the chief officer brought the bank to ruins by accepting bribes in order to purchase bad debt; the chief officer was promptly sentenced to death for the social impact of his crimes.

China Sentences Former Bank Chief to Death in Rare Move (Published 2021)

The judgment against Lai Xiaomin, a former chairman of Huarong Asset Management, followed a shift away from capital punishment for white-collar crimes.

www.nytimes.com

Evergrande’s debt default is about to trigger a domino effect among other weak banks that hold it’s debt, and coupled with flash lockdowns impacting economic growth**, the recent dismantle of the multibillion dollar private tutoring industry***, and the collapse of the consumer tech sector****, things are not looking too good for the Chinese stock market.


* 300 Billion valuation before the stock went to shit.

** China has adopted a zero Covid case policy that pushes them to lockdown whole cities at once when a few cases are reported. This in turn pushes the local economies to stop during the lockdown period.

China Is Imposing Strict Lockdowns To Contain New COVID Outbreaks. But There's A Cost

The severe restrictions on travel and movement are having a serious impact on citizens, international workers, students and more as China grapples with the pandemic.

www.npr.org

*** CCP orchestrated this to relief the burden on parents who cannot pay for private tutoring for their children.

Capitalists Are No Longer Welcome in China's Classrooms

As Beijing makes clear what’s truly important for the nation, profit is being squeezed out of private tutoring, an investor darling.

www.bloomberg.com

**** The CCP destroyed its consumer tech sector to make the government and research tech sectors more attractive, a good move long term

China's regulatory crackdown has wiped billions off tech stocks — here are the risks ahead

China has introduced a slew of new tech regulation. With most landmark legislation passed, investors are wondering if it's time to jump into Chinese stocks.

www.cnbc.com

 

[haxan7]

 

[nush]

Evergrande, a property development company in China with a 300 Billion* marketcap has been mismanaged to shit and the CCP will not bail them out.

CCP say they won't. With that much money in play you know Evergrande are totally bros with the CCP. CCP are not going to let the China property bubble burst for as long as possible, because they know shit hit's the fan when it does.

 

[Tschumi]

China definitely has a property bubble, look at ghost cities full of empty towers in inner mongolia and stuff, that's been the case for well over a decade... I wouldn't be surprised if that bit them in the arse one day.. i don't know enough to predict how and when though

 

[MrMephistoX]

Evergrande, a property development company in China with a 300 Billion* marketcap has been mismanaged to shit and the CCP will not bail them out. Today the CCP told banks to not expect interest payment on Evergrande’s debts next week, essentially defaulting.

China Tells Banks Evergrande Won’t Pay Interest Next Week

Chinese authorities have told major lenders to China Evergrande Group not to expect interest payments due next week on bank loans, according to people familiar with the matter, taking the cash-strapped developer a step closer to one of the nation’s biggest debt restructurings.

www.bloomberg.com

Multiple strongholds of the Chinese economy have been failing since the pandemic started, and the CCP just bailed out one of the largest banks after the chief officer brought the bank to ruins by accepting bribes in order to purchase bad debt; the chief officer was promptly sentenced to death for the social impact of his crimes.

China Sentences Former Bank Chief to Death in Rare Move (Published 2021)

The judgment against Lai Xiaomin, a former chairman of Huarong Asset Management, followed a shift away from capital punishment for white-collar crimes.

www.nytimes.com

Evergrande’s debt default is about to trigger a domino effect among other weak banks that hold it’s debt, and coupled with flash lockdowns impacting economic growth**, the recent dismantle of the multibillion dollar private tutoring industry***, and the collapse of the consumer tech sector****, things are not looking too good for the Chinese stock market.


* 300 Billion valuation before the stock went to shit.

** China has adopted a zero Covid case policy that pushes them to lockdown whole cities at once when a few cases are reported. This in turn pushes the local economies to stop during the lockdown period.

China Is Imposing Strict Lockdowns To Contain New COVID Outbreaks. But There's A Cost

The severe restrictions on travel and movement are having a serious impact on citizens, international workers, students and more as China grapples with the pandemic.

www.npr.org

*** CCP orchestrated this to relief the burden on parents who cannot pay for private tutoring for their children.

Capitalists Are No Longer Welcome in China's Classrooms

As Beijing makes clear what’s truly important for the nation, profit is being squeezed out of private tutoring, an investor darling.

www.bloomberg.com

**** The CCP destroyed its consumer tech sector to make the government and research tech sectors more attractive, a good move long term

China's regulatory crackdown has wiped billions off tech stocks — here are the risks ahead

China has introduced a slew of new tech regulation. With most landmark legislation passed, investors are wondering if it's time to jump into Chinese stocks.

www.cnbc.com

What might seem improbable May happen because no one dares to tell Xi the dear leader the one word he desperately needs to hear: NO.

Ironically there actually isn’t a direct translation in mandarin. The private for profit tutoring system was how I got to work in China for 2 years but it seems like once existing visas are up foreign teachers are out.

 

[haxan7]

Wait am I one of the neogaf China bros

 

[Tschumi]

Wait am I one of the neogaf China bros

u live in beijing after all

 

[FunkMiller]

Every rich investor in Australia right now

 

[Chankoras]

This maybe will be bailed out because is too big to fail, but who knows. Soros was critical of folks like blackrock and others for their risky bet on China, so if things get messy it might have global repercussions.

 

[Robot Carnival]

been hearing about this since a while ago from my friend in HK and it's probably much worse than what we're seeing on the news. this goes as far back as 2016, maybe even 2012, and currently, from what I understand, and keep in mind I understand jackshit about the market and stuff, it basically comes down to the following.

EG was doing what most companies were doing, getting loans to cover other loans while trying to keep as much of their own money.

they suffered losses due to not being able to sell some of their highend properties.

2016, banks starting to stop providing EG with new loans due to them beginning to have difficulty paying back old loans on time. and keep in mind EG also owe many suppliers and contractors money. and these suppliers and contractors would also go get loans from banks.

EG would sold a lot of future properties to its own employees as a way to fill the holes they have because of lack of loans from banks. which means the employees, and often times the family relatives of the employees, would take out loans for these opportunities at a great price for a property. properties that still had not been build to this day.

and now, EG is at a point where they had not even been able to pay their own employees for a while and people are finally starting to panic about EG's numbers. it's basically Lehman Brothers, but with even higher numbers. the chain effect of this, if it really blows up, would be catastrophic for not just the financial market in China, but Asia as a whole and very possibly the world.

again, I'm just posting what I can understand is going on. I could be completely wrong and maybe CCP and Xi can fix this shit. who knows.

 

[HarryKS]

China is better at capitalism that the Grand Vizir of laissez-faire itself so far.

The State seems to be willing to let it run its course without bailing them out, which is something the US decided against doing a while ago, thus creating an artificial system.

 

[jason10mm]

No worries, I'm sure there are a few hundred billion in that infrastructure bill to help out our struggling Chinese friends....

 

[AJUMP23]

I wish the US would stop bailing out companies too. Airlines and financial institutions should be left to fail.

 

[Kenpachii]

What might seem improbable May happen because no one dares to tell Xi the dear leader the one word he desperately needs to hear: NO.

Ironically there actually isn’t a direct translation in mandarin. The private for profit tutoring system was how I got to work in China for 2 years but it seems like once existing visas are up foreign teachers are out.

If he was ignorant and didn't had people that said the reality, he would have never got to the spot he is in right now if he doesn't recognize flaws. So that's high unlikely.

I wish the US would stop bailing out companies too. Airlines and financial institutions should be left to fail.

U can't because if u do, tons of company's will crumble and it will snowball through the market entirely which will also effect you.

 

[MrMephistoX]

If he was ignorant and didn't had people that said the reality, he would have never got to the spot he is in right now if he doesn't recognize flaws. So that's high unlikely.



U can't because if u do, tons of company's will crumble and it will snowball through the market entirely which will also effect you.

Not saying he’s ignorant but when you’re a leader you still need people to call you out on bad ideas. In China there’s a high risk you’ll get dissapeared for disagreeing with the dictator for life so the likelihood of providing him with less than rosy information is quite low. Hu Jin Tao was the last true free market Chairman and stepped down after his term was up: this guy came in, smeared or dissapeared rivals like Bo Xi Lai and then declared himself Chairman for life. Group think is bad enough but when you have group think at the point of the sword bad ideas fester.

 

[AJUMP23]

U can't because if u do, tons of company's will crumble and it will snowball through the market entirely which will also effect you.

It also give the opportunity for new innovations to fill the void. I say let them die, even if it effects my bottom line.

 

[Kenpachii]

Not saying he’s ignorant but when you’re a leader you still need people to call you out on bad ideas. In China there’s a high risk you’ll get dissapeared for disagreeing with the dictator for life so the likelihood of providing him with less than rosy information is quite low. Hu Jin Tao was the last true free market Chairman and stepped down after his term was up: this guy came in, smeared or dissapeared rivals like Bo Xi Lai and then declared himself Chairman for life. Group think is bad enough but when you have group think at the point of the sword bad ideas fester.

Why would they call him out for bad idea's. He probably has multiple think tank groups that put scenario's in front of him what happens when this or that is done and he chooses or not even that a group of people run the country and he just checks in from time to time and see's results.

 

[HarryKS]

This whole thing has been orchestrated by the CPP. It's happening because they're allowing it to happen.

This will not be a Lehman situation. They are structured differently.

 

[MrMephistoX]

Why would they call him out for bad idea's. He probably has multiple think tank groups that put scenario's in front of him what happens when this or that is done and he chooses or not even that a group of people run the country and he just checks in from time to time and see's results.

The think tanks are just fluffing his ego do you really think they have the balls to tell the dictator information he doesn’t want to hear? Don’t take my word for it: https://www.wsj.com/articles/xi-jin...unist-party-beijing-authoritarian-11628885076

 

[godhandiscen]

This whole thing has been orchestrated by the CPP. It's happening because they're allowing it to happen.

This will not be a Lehman situation. They are structured differently.

Did you miss the part when they sentenced to death the chairman that mismanaged a national bank? I don’t think they intend these things to happen.

 

[BigBooper]

Good luck to anyone holding China stocks in the US. I'm too scared.

 

[spawn]

Well they did it to themselves

 

[chromhound]

it's going to crash hard lol

 

[nush]

The private for profit tutoring system was how I got to work in China for 2 years but it seems like once existing visas are up foreign teachers are out.

Last month all the English training centers were shut down. So there's no work for them now unless they find private clients or there are still schools still hiring foreign teachers which would be very difficult.

 

[MrMephistoX]

Last month all the English training centers were shut down. So there's no work for them now unless they find private clients or there are still schools still hiring foreign teachers which would be very difficult.

Yeah it’s crazy to think that I never would have had the opportunity to teach over there - let alone meet my former co-worker/now wife - if I were a new undergrad today. It’s kind of funny so many times her relatives were like “you should come back and open up an English school!” : hard nope for me after Winnie the Pooh took over but something I actually considered before I got my MBA and a much better job here.

 

[ape2man]

Maybe its a lot bigger than 300bln china has the tendency to inflate positive numbers and reduce negative numbers.

 

[ape2man]

i want to know who loaned money to Evergrande and who loaned money to the people who loaned money to Evergrande.

Yahoo finance is saying total debt is 575b thats almost the same size lehman was at the time of the crash on september 15th 2008.... ooo shit.


Lehman bros september 15th 2008. 600b
Evergrande september 15th 2021. 575b

history repeats!!!

 

[12Goblins]

rip my baba money

 

[Chankoras]

China is better at capitalism that the Grand Vizir of laissez-faire itself so far.

The State seems to be willing to let it run its course without bailing them out, which is something the US decided against doing a while ago, thus creating an artificial system.

Well, they bailed out Huarong, although Lai Xiaomin paid the prize

U can't because if u do, tons of company's will crumble and it will snowball through the market entirely which will also effect you.

so there is an structural problem that needs to be addressed, can't socialize the losses of companies because they're too big too fail, this has created a huge moral hazard.
Let them fail like Iceland did in 2008.

 

[gatti-man]

Good luck to anyone holding China stocks in the US. I'm too scared.

Exactly. Investors follow trends and this Chinese stocks all trend straight down. Being “cheap” isn’t good enough of a reason to buy them when the govt is straight dismantling its own economy and picking winners and losers. Until Covid stops being a thing and you see true capitulation from the market I’d ignore chinas stocks completely.

 

[HarryKS]

Did you miss the part when they sentenced to death the chairman that mismanaged a national bank? I don’t think they intend these things to happen.

It is by design.

 

[Ownage]

I'm not sure enough Western people understand the difference between Western economies and China / communism. Every single thing that exists in China is the government. There are no private businesses. There's no means of default. The Chinese government can just print more money and take care of everything. This is how their economy operates. The value of the Chinese Yuan is worthless, and the value of the Chinese Yuan has unlimited potential. The State calls all the shots. Whatever is said about default only has to do with politics. Somebody pissed somebody off, and possibly didn't bribe them enough. Oftentimes you see movie stars, or billionaires, or media officials getting too big for their britches for the communist state. Either these people are killed or brainwashed from months and other forms of fun punishment to instill submissiveness.

 

[RJMacready73]

i have my fingers crossed

 

[Kenpachii]

Well, they bailed out Huarong, although Lai Xiaomin paid the prize

so there is an structural problem that needs to be addressed, can't socialize the losses of companies because they're too big too fail, this has created a huge moral hazard.
Let them fail like Iceland did in 2008.

We have the same issue here, airport got into problems with corona, needed to be saved by the government. They can't let it fall over because it would be a disaster ecenomically. Iceland went under because the banks went under and couldn't save themselves from it. If they could they would have done it.

 

[LordPezix]

I was just a couple years out of high school when the 2008 crash happened in America.

I wish no economic collapse on anyone. I hope they make it through.

 

[Chankoras]

We have the same issue here, airport got into problems with corona, needed to be saved by the government. They can't let it fall over because it would be a disaster ecenomically. Iceland went under because the banks went under and couldn't save themselves from it. If they could they would have done it.

Is that airport publicly or privately owned?And also if government tells you to shut down business because force majeure aka pandemic they better be prepared to assist you, that's not due to making reckless decisions which I believe is what we're talking about at least in regards with evergrande.
Iceland couldn't possibly bailed out it's banks because their balance sheets were too big, however it recovered economically rather well making the proper adjustments.
If something is a threat to stability it needs to be addressed with proper regulation or allow it to fail, otherwise is not market capitalism, and everything we preach about free markets and our capitalist system is bullshit.

 

[Kenpachii]

Is that airport publicly or privately owned?And also if government tells you to shut down business because force majeure aka pandemic they better be prepared to assist you, that's not due to making reckless decisions which I believe is what we're talking about at least in regards with evergrande.
Iceland couldn't possibly bailed out it's banks because their balance sheets were too big, however it recovered economically rather well making the proper adjustments.
If something is a threat to stability it needs to be addressed with proper regulation or allow it to fail, otherwise is not market capitalism, and everything we preach about free markets and our capitalist system is bullshit.

No clue if its publicly owned. Didn't spend much time on researching it or know much about it.

The thing is, while lots of smaller company's fall over because of corona as they have no income or hit welfare. think about small designer company's for example or pubs. the government isn't coming in and saying, oh here you got a bag of money to compensate you for your loss because u are simple not important towards them.

In my view if something gets bailed out like banks everybody needs to get bailed out or be able to be bailed out or supported. But that's not the case. Hell even getting a loan of 5k to overlap a month in corona was a pain in the ass to get it done not even a little bit as a friend of mine asked for some support because he was financially ruined. yet those company's can give themselves bonuses while no airplane is flying and still get huge amounts of money injected by the government. Which triggered him to no end.

And i must agree with him on that front. However some company's have such huge impact on ecenomy that u simple can't let them fall.

 

[Chankoras]

No clue if its publicly owned. Didn't spend much time on researching it or know much about it.

The thing is, while lots of smaller company's fall over because of corona as they have no income or hit welfare. think about small designer company's for example or pubs. the government isn't coming in and saying, oh here you got a bag of money to compensate you for your loss because u are simple not important towards them.

In my view if something gets bailed out like banks everybody needs to get bailed out or be able to be bailed out or supported. But that's not the case. Hell even getting a loan of 5k to overlap a month in corona was a pain in the ass to get it done not even a little bit as a friend of mine asked for some support because he was financially ruined. yet those company's can give themselves bonuses while no airplane is flying and still get huge amounts of money injected by the government. Which triggered him to no end.

And i must agree with him on that front. However some company's have such huge impact on ecenomy that u simple can't let them fall.

I don't disagree with your friend, issue is this companies take advantage in the form of stock buybacks and huge bonuses for executives that don't deserve them, and that makes people angry, specifically like in the 2008 financial crisis when people lost their homes due to being "underwater" and no bailout for them.

If companies have such a huge impact in the economy, these rescue packages should have conditions, otherwise they're allowed to make risky choices and be remunerated for it, they should have oversight and punishment mechanisms, perhaps temporary government take over, no just meaningless fines, or let them fail and allow the market to correct itself, maybe something better comes out from that.

To make it clear I'm not talking about corona, that's a completely different animal.

 

[ParaSeoul]

China will outlast the US probably.

 

[NahaNago]

It seems like every few months we get a China is doomed thing going.

 

[EverydayBeast]

There’s Chinese products everywhere what there’s not is a Chinese car I don’t think their market collapse.

 

[Chankoras]

https://www.bloomberg.com/news/arti...ddition-to-soothe-nerves-amid-evergrande-saga
Some cash injection.

 

[Ownage]

https://www.bloomberg.com/news/arti...ddition-to-soothe-nerves-amid-evergrande-saga
Some cash injection.

Coming soon.

 

[nush]

CCP say they won't. With that much money in play you know Evergrande are totally bros with the CCP. CCP are not going to let the China property bubble burst for as long as possible, because they know shit hit's the fan when it does.

https://www.bloomberg.com/news/arti...ddition-to-soothe-nerves-amid-evergrande-saga
Some cash injection.

 

[Chankoras]

i want to know who loaned money to Evergrande and who loaned money to the people who loaned money to Evergrande.

Some lenders

EXCLUSIVE China Evergrande's lenders weigh up loan losses, rolling over credit - sources

One of China Evergrande Group's (3333.HK) main lenders has made provisions for losses on a portion of its loans to the embattled property developer, while some creditors are planning to give it more time to repay, four bank executives told Reuters.

www.reuters.com

Some western investors and their exposure


Also credits from down payments from property buyers and credit frommaterials suppliers and contractors.

 

[Yoboman]

Wow they sentenced that guy to death?

Why didn't they just give the company a multi billion dollar bailout and punish some intern at the company?

 

[godhandiscen]

I should have cashed out in anticipation, but at least I bought a lot of shares today. There will be another drop once the final default is announced, but i doubt it will be as big as today, or have such an impact in my positions.

 

[poppabk]

Wow they sentenced that guy to death?

Why didn't they just give the company a multi billion dollar bailout and punish some intern at the company?

Yeah sentencing the guy to death is likely to have a bigger impact than some company failing. If the US government said that they would execute people for shady financial dealings the US stock market would probably grind to a halt in seconds.

 

[chromhound]

A couple of these employees are about to have their organs harvest

 

[Taxexemption]

I should have cashed out in anticipation, but at least I bought a lot of shares today. There will be another drop once the final default is announced, but i doubt it will be as big as today, or have such an impact in my positions.

When it comes to stocks no one knows what the right play is until after the fact. I'm not selling anything because I fear more inflation is on the horizon and I want any stocks I own to inflate with whatever money printing goes on. It may be the case that the smarter move is to sell everything today and buy it back in a month or two, but whether I'm right or wrong I know that I'm just guessing.