Evergrande - What Happens When It Goes Bust?
Discussion
Whilst the wider issues are beyond my comprehension, it does finally put the nail in the coffin of the once mighty SAAB and how it declined to NEVS. Even the factory at Trollhättan belongs to Polestar now.
https://en.wikipedia.org/wiki/NEVS
https://en.wikipedia.org/wiki/NEVS
Funnily enough I watched Joe Bloggs video on this 10 minutes ago...
https://www.youtube.com/watch?v=5WKtI6c36Yo
Yes, but it's nearing... 'conclusion'!
https://www.youtube.com/watch?v=5WKtI6c36Yo
jshell said:
NerveAgent said:
Wasn’t this “about to happen” about a year or two ago?
Yup!Random Account No6 said:
OP presumably saw the news that the founder/CEO is basically under house arrest.
ETA: Institutions have been given a year or twos warning to assess and manage their exposure. Who doesn't love a fire drill though….
The FT have run a series of articles about the build up which are worth reading.ETA: Institutions have been given a year or twos warning to assess and manage their exposure. Who doesn't love a fire drill though….
Edited by Random Account No6 on Thursday 28th September 16:21
The short version is as soon as the evergrande board were placed under investigation evergrande were unable to access the debt markets to stop the default from coming.
honest_delboy said:
So with 2 years for everyone to calculate and reduce/mitigate their exposure this is priced in to the markets and it's just business as usual (but some volatility anyway) ?
the default two years ago was for international debt.when it defaulted the assumption was that the CCP would bail the domestic debt out and it would keep operating.
when the shares were going to be relisted in August that was the working assumption.
prior to the re-launch, the board was arrested and placed under investigation for criminal activities.
last week the CEO was re-arrested along with the board and we're not re-released to run the company I.e. there is a $300bn corporate entity with no management team to make big decisions or, more importantly able to access the capital markets.
Evergrande is done IMHO the question is what happens within the blast radius of it's collapse. will country garden go with it ?
Edited by Carl_Manchester on Sunday 1st October 09:28
I’d say the “blast radius” will be pretty minimal….long time coming so plenty of time for exposed entities to prepare. I’d say the CCP may have taken the decision that saving entities Evergrande’s demise may have implications for is better than saving Evergrande itself. Sends a message etc.
voyds9 said:
When it goes will that finish off Country Garden in a domino effect
This. But I believe that QE will kick in (even more than it is) and China will keep the effects to a minimum because their economy is really struggling and frankly right now its world war on an economic scale. US should be in a similar situation but they are fighting and doing their best to cover the cracks and China will do exactly the same. There is no doubt a debt bubble though, and globally its a problem. We saw the .com bubble crash in 00 and the housing bubble crash in 07. I think there is a good chance we might see a debt bubble crash in late 24 early 25.
Again its all pollical though and there is an election in the US next year so expect they will do everything they can do patch it up, until they cant.
Carl_Manchester said:
last week the CEO was re-arrested along with the board and we're not re-released to run the company I.e. there is a $300bn corporate entity with no management team to make big decisions or, more importantly able to access the capital markets.
Evergrande is done IMHO the question is what happens within the blast radius of it's collapse. will country garden go with it ?
Under investigation and police control, yes, don’t think he was arrested last week - he basically has been, but hasn’t. The joys of China…Evergrande is done IMHO the question is what happens within the blast radius of it's collapse. will country garden go with it ?
Edited by Carl_Manchester on Sunday 1st October 09:28
Tbf even without the current drama (which China pretty much brought on itself through new regulation) it was only a matter of time before Hui Ka Yan felt some heat - his lifestyle was a tad conspicuous for someone in his position, politically in particular.
China have been digging through other firms over the last couple of years, I expect (hope!) they have the contagion fairly well mapped out (and event probably planned!).
Edited by Random Account No6 on Sunday 1st October 11:05
rossub said:
What baffles me is why millions of Chinese want to live in the tower blocks that they seem to specialise in building. I mean, why in the name of god would you want to live in this….
Anything to get a leg up the property ladder…but it’s turning out to be a house built on shoddy foundations, metaphorically and probably physically, didn’t the CCP promise economic prosperity for the people in return for obedience, let’s see how that works out.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff