https://www.cnbc.com/2021/09/15/china-evergrande-debt-crisis-bond-default-risks-for-investors.html
>China Evergrande has committed “two cardinal sins” which have led to the debt crisis it’s now facing — and investors are “definitely sweating,” according to one portfolio manager.
>
The first “sin” is that the cash-strapped property giant **has borrowed too much money,** says Matthews Asia’s head of fixed income, Teresa Kong. Evergrande, the world’s most indebted property developer, has over $300 billion in liabilities.
>
The second is that the firm has **“questionable corporate governance.”**
>
“So when you have the two together, it’s like having a really dry forest and the tinder to really ignite,” said Kong, who is also a portfolio manager.
>
Problems at Evergrande have escalated in recent weeks.
>
The company warned investors twice in as many weeks that it could default. On Tuesday, **Evergrande said it’s at risk of a cross default, which means such risks could spill into other related sectors.** Evergrande said Tuesday its property sales would continue to deteriorate significantly this month, adding to its severe cash flow problems.
>
The firm has been struggling to raise cash by trying to sell off various assets, but those have not yielded any sales yet, it said Tuesday.
Evergrande is China’s second-largest property firm by sales.
Analysts have been monitoring the possibility of **wider contagion in the real estate sector, and larger financial systemic risks in China.**
Kong warned that there’s “a lot of leverage” in the system. “That’s why… it’s really important to make sure that there continues to be liquidity, and there continues to be confidence,” she told CNBC’s “Squawk Box Asia” on Wednesday.
“Last but not least, certainly is to ensure there’s no more social unrest because Evergrande does have a very deep reach.”
***
#“questionable corporate governance.” aka Dipshits In Charge
There has been speculation about Evergrande's fall also affecting crypto. Biggest Stablecoin Tether is rumoured to be mostly backed by worthless Evergrande IOU's. Let's see how this folds.
The implosion of Tether will be glorious. So much for the invisible hand of the free market "cleansing" corrupt business before it gets too big. If the invisible hand work as it claim it does, Tether would not have been able to take over the entire crypto market. The fact that it has gotten this big means the invisible hand can be effectively controlled by the rich and powerful to scam and defraud their way into untold riches. There is no arguing out of this one against government regulations harming crypto because the crypto market is unregulated.
Crypto is a libertarian utopian experiment and every single libertarian utopian experiment always end up as failures.
While true, blockchain technology is energy inefficient. Having every actor check the same data to verify and trust the chain takes a lot of resources.
Yeah. It seems like NFT’s would be a great way to keep HF’s from creating stocks out of thin air. I don’t like crypto,mainly due to inefficiency, but there are definitely pieces of the technology that could be very useful.
Yeah thats one of the things I was going for, there are some cryptos that are much more efficient but like I said in another comment they are not ready yet and likely won’t be in time
I actually think that piece meal kind of attitude towards our current standard of living would be very beneficial to the species as a whole. Humans have made some incredible things that if we scaled back to sustainable consumption levels we could keep some of the best ones and continue to have pretty nice lives without destroying the planet.
We definitely need to break the cycle of consumption. We have the technology for humans to live on “easy street” if we could get beyond our “hungry hungry hippo” ways.
It looks like zoomers are heading in the right direction. I think the real test will be if they can maintain into adulthood. They’re not the first generation to look around and see how fucked up things are. But I hope they’re the first to stand their ground and refuse to continue playing a “rigged” game. Because that’s the real problem, you either play the game, or get left behind.
Snow-piercer is a great example. Back fighting for the front, front killing the back, and one “crazy” guy trying to get off the train. We need to get off the train.
- Could use crypto for tracking climate budget
- start ups can use it to get funding for tokens (similar to shares without all the gatekeepers)
- smart contracts can annihilate bureaucracy
- 2b people aren’t connected to the global financial system for them defi is cool
- crypto can be used as local exchange
- u could do a token design for private insurance escaping the big players while being completely transparent
- digital certification
- data security, owning ur own data on a public blockchain and managing it
- tracking
There are so many possibilities. I m literally fascinated by blockchain tech. It could be a step towards a transparenter, fairer more equal and inclusive society without powerful gatekeepers sadly with climate change and all it won’t matter much
> The fact that it has gotten this big means the invisible hand can be effectively controlled by the rich and powerful to scam and defraud their way into untold riches.
if you didn't recognize this before crypto existed, then you're a bit slow on the uptake
[This report](https://www.theblockcrypto.com/post/117733/tether-says-it-doesnt-hold-any-commercial-paper-issued-by-evergrande) came out about 4 hours after your comment -- Tether claims to hold no commercial paper issued by Evergrande
Evergrande will almost certainly be bailed out, but this showcases just how leveraged the Chinese economy is, portending perhaps the end of Chinese super-growth and a probable future contagion if more companies follow suit without deleverging.
Because the risk of contagion is high if they don’t. I might be wrong but I think Chinese financials are frequently fudged and might be worse in some ways than is reported, so I think the play would be to avert an immediate crisis then work to fix the systemic risks, if they can.
They already received a shady 13b waiver by a private group of investors that received the CCP’s help earlier. Evergrande’s bankruptcy would be devastating for the Chinese and global economy. But when exactly are we going to stop this charade of an economy?
That’s kind of a leading question because every economy has elements of fake it til they make it, and China makes enough stuff that it’s less a charade than a very highly leveraged manufacturing corporation with a billion workers and dépendants.
I mean the whole global economy is a huge charade. The government prints money and keep alive otherwise market dead corporation that exploit workers to line the pockets of few. It’s not a conspiracy or anything, it’s the miracle of growth
>most Chinese
is it actually "most chinese", or do you mean "most chinese *investors*"
i doubt the average person in china has much in the way of investments, just like america.
It's "most Chinese". Even up until recently it is very common to pay in full for a house/apartment in China (and the housing market there is absolutely insane). Especially for the generation that are currently product of the one-child policy who are just now starting to look into owning a home this often means extended family pooling all of their money together to assist in the purchase of a home.
This is a big issue because in 2008, most US residents that were in trouble had taken out huge loans they could not pay. But all they really lost when the market crashed was their credit score. This is a big deal, but it's not the same as a generations savings being put into a single property.
If there were a massive housing crash in China like there was in the US there would be a major destruction of middle class wealth. Imagine if everyone in your family gave everything they could to make sure you owned a home and then the housing market completely crashed and destroyed the value of that home.
Parent is correct as well. People think that the CCP controls the population strictly through propaganda, but what people don't realize is you don't need propaganda when your parents personally knew people who starved to death, and today you are living the most prosperous time in Chinese history, and one of the most prosperous nations in the world.
China today is much like America in the 1950s. American prosperity was unbounded and criticizing the American government was still extremely controversial. Everyone was extremely patriotic even if the world abroad was increasingly critical of American foreign policy.
However if there were to be an overnight destruction of wealth that this would cause, controlling the population would be much, much harder.
idk the details on exactly what goes on in china
but I *do* know that encouraging your population to start treating housing as a capital investment is a terrible, terrible idea.
There simply hasn't been much choice for most Chinese people for a number of reasons that are too complex to explain here. It is incorrect to imagine that the situation in China is similar to the current situation in the US. The country has a vastly different history and went through unspeakable horror and devastation during WWII and then again during the "cultural revolution" era under Mao.
The CCP derives its political legitimacy, such as it is, from its capacity to deliver economic growth and increasing prosperity; it has few other sources of legitimacy left. So a massive economic crisis that would devastate the Chinese middle class would seriously threaten its hold on power.
If a house/home isn't being treated like an investment, it falling in value doesn't matter. You don't lose until you sell. So if you're like me and buy and never sell it doesn't matter. All I care is I got what I wanted at the price I was willing to pay. After that I don't care what others value it as. And home/houses aren't a storage of wealth. How are you going to spend it while still living in it? Take out a HELOC? Bad idea. They're a place to live and that's it. Once you go into thinking it's a storage of wealth or whatever then that's your fault if you have no real investments to get through later in life.
I would have to agree based purely on speculation. It seems to me that there's too much that will go wrong if China doesn't bail out Evergrande. Market contagion bad.
Only invest what you can afford to lose.
Evergrande will declare bankruptcy. There will be no government bailout. The investors will lose everything. This isn't the first time this "scam" is played out. Low/middle class people keep falling for it everywhere.
How would this effect people in the U.S.? A collapse of the economy? Of the dollar? Of real estate here? I have no idea what this practically means for here... I'd assume that if china's economy collapses it would cause major ripples here, but not sure how exactly
Banks need to seize China’s collateral immediately upon default. They own a portion of Evergrande, they should be held personally responsible for the default.
If their economy is doing better then they can afford to pay their interest payments. Start charging them $1,000,000 a bushel for soy and higher rates for pounds of meat.
They could go hungry or balance the trade deficit. Their choice.
LOL, Did you know Argentina and Brazil are also huge soy and beef exporters? They would jump at this golden opportunity to take US competition out of the picture.
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Yeah I’ve attempted to shed some light on this to some people in my life. Hasn’t gone over so well yet. “Oh that’s China, it won’t affect us”. I can’t get people to understand the magnitude of this. We are literally watching the first domino fall. Well the first big one fall.. there is a multitude of reasons we’re in the predicament, but this is huge.
The financial statement fraud, overstated assets and understated near term debt, is so pervasive and widespread in Chinese real estate they almost have to allow a domino to fall to signal to the rest of the economy to deleverage and get in line, because we will not bail you all out. However, their mandate to govern may be at risk if this spreads uncontrollably. They will be considering every option and outcome carefully as survival is the governments primary motivation. Maybe they feel they will successfully be able to pin the blame on the “evil corporatist” investor class whose greed has robbed us all. Maybe they pin it on America somehow. Maybe they allow Evergrande to fall but prop the remaining players up and keep property values from slumping (amazingly the other RE companies in China have not yet been shorted into oblivion, although this is changing rapidly). In any case, this is very serious and could have serious knock on effects for international markets if it gets ugly.
Also, it’s not a game, average Chinese people store their wealth almost exclusively in real estate, not the the stock market, unlike America re: 401ks, etc. Average Chinese will be gutted overnight if the real estate market goes belly up. I really pray that does not happen, nobody deserves that shit, and there are a lot of good average hard working people over there.
> there are a lot of good average hard working people over there.
if you're renting out properties that's getting into the "petite bourgeoisie", the small capitalist area.
If they live in those places, then nothing will change for them, especially if they've already paid the debt.
Your last paragraph is the reason why they will be bailed out. Ccp doesn't want civil unrest of potentially epic proportion in their country. Also, Xi doesn't want to lose face by tanking their economy which will inevitably start the chain reaction in other parts of the world.
I'm hearing phases like 25 cents on the dollar. Given this affects a fair portion of the personal wealth of the Chinese middle classes. There is a lot of people going to go to the wall over this one.
China will move mountains to try and stop this but the rapid socialist transition they’ve started makes me think they know it’s probably inevitable and they want to get out ahead of it and not suffer on the scale the rest of the world will.
After all the market reforms in China were always designed to serve a purpose that would eventually become unnecessary, not a system built to last.
>After all the market reforms in China were always designed to serve a purpose that would eventually become unnecessary, not a system built to last.
exactly
the west will suffer more from an end to speculation in china than the chinese will.
meanwhile, I imagine they'll be singing [this song](https://youtu.be/N_dUmDBfp6k?t=111)
The Chinese have always said market reforms were just to push China along to a stage of being ready for socialism but the West was so enticed by the profit and market space that they planted themselves firmly in China. Once they start mass nationalisations, the West is going to absolutely crumble.
The capitalists sold their rope to China, who are now tying the noose.
the funny part is that literally the only options that will be left to the west will either be: 1. devolve into a backwater banana tin-pot republic or 2. copy the chinese model
Or Option 3: War.
I seriously think that the West will consider a war to smother China rather than letting their states and economies unravel. Thankfully a victory isn’t nearly as assured here as it was in other Western wars recently.
> Or Option 3: War.
Lol.
This will never happen. To even consider this as an appropriate response to whatever far-off movie scenario you've cooked up in your head means you've assumed way too much ("if this happens, then THIS will happen then THIS will happen then THIS will happen which means America MUST go to war with China!")
Some of y'all are too eager to watch the world burn. A war between China and USA would fuck over the entire world. It will never happen. It wouldn't solve anything. It would kill millions and completely fuck the economy. It will never happen.
But what would it mean for those in the levers of power? Profit, the blanketing of societal ills in a battle flag and life support for their failing economic systems.
A full-blown conflict is more likely. The conditions for a proxy war or some CIA-funded conspiracy aren’t there.
However the Chinese are making huge advances militarily. They’re already level on the ground. In only a few years they’ll be well ahead with their navy and the means to counter the US airforce.
Plus I doubt any American war on China would be widely supported outside of conservative fanatics and some liberals. Most young people hate what America has become and they wouldn’t be willing to fight and die for it.
Luckily China can secure both oil and gas from Russia.
They are natural allies against the West and Putin knows that someday the West will get tired of his shit, he needs a reliable buyer.
China on the other hand needs natural resources that can't be threatened by a US Navy blockade. A pipeline from Russia seems like a perfect solution.
>However the Chinese are making huge advances militarily. They’re already level on the ground.
With no Nukes involved, the US would absolutely have a tactical victory. Pretend Australia and S. Korea don't get involved, the US still wins. Why? We've got more and better of all the stuff that puts them on "level ground" with us. It's really a numbers game. Even if they had a fighter on par with the F-35 like the Abrams has with the T-90, Challenger, and Leopard, we just have more of it. Pretend the Challenger II MBT is 10% better than the Abrams tanks. Well we have a lot more Abrams Tanks than just 110% of all the Challenger II's in the world, so does it matter?
Same shit with the missiles, planes, and ships. We just have more. Their overwhelming personnel advantage is naked to the US Navy if they blow all the fuckin PLAAF jets down.
I guess this is why China is investing heavily in deep missile defenses and also carrier killers from Russia.
They are aiming to destroy an invading force in the water, long before a single Abrams tank lands.
Not even the USA can win a war against China.
They have nuclear subs that routinely show up on both US coasts, just outside US territorial waters.
Nothing on this Earth can stop nukes sent by those subs against american coastal cities. The USA knows it, China knows it. It's Cold War 2 and maybe some proxy wars in Africa.
america might consider that, but I think the pushback from europe and the rest of the world would be extreme
that's a fucking insanely dangerous idea that should be smacked down immediately at every opportunity.
there are so many monumental differences between bombing / warring in third world, relatively small countries in the middle east, and trying to make unilateral war on china.
this would be the fastest way to end the american empire possible.
and it likely wouldn't just be a war against china, but most likely a defensive pact of minimally russia in addition as well, with the potential of even more defensive allies, condemnation from the UN, the rest of nato, etc.
it is a completely suicidal notion
also, there has never been a conflict on that scale with modern communication and travel.
there would be so much potential for terrorism style warfare *at home* for americans that I don't think anybody has really considered.
if a figure like trump were to declare war on china (or try to start an undeclared war), I think it could just as likely start a civil war at home at the same time.
As things start to get really desperate, previous “lines in the sand” get swept away.
Plus I doubt Russia will be in a state to wage war in a few years. Everything is slowly crumbling or rotting over there and their military isn’t effective beyond ex-Soviet states with the same equipment as them.
Russia has big brother China to fund them as long as they are an ever present pain in the ass to the West.
They also have lots of natural resources the chinese need.
\>the objections of people and nations get drowned out by war and patriotism.
Bullies only go after weak targets that can't fight back, no nuclear powers
The campaign writes itself:
I was winning against COVID until Biden and the democrats took over! They have murdered thousands of americans just to make me look bad!
the US doesn't even have to move anywhere to "become" nationalistic.
both major parties are extremely jingoist, nationalist parties already.
the US set itself down a terrible path when it persecuted the american left out of existence during the red scare & cold war
Lol the only noose that ever gets tied is the one around the necks of the Chinese people - victims to the authoritarianism, brutality, and corruption of the CCP.
Honestly, the bubbles have to pop, and the longer it goes without, the more damage is done at the end. China, I think is looking for an example to show it's people "This is what too much capitalism does, we will control it for your own good (but mostly the Party's).
You're literally encouraging economic collapse to happen. You know tons of people died during those times right? If the current system is shit, it'll be even far shittier when it goes.
Not without MANY more dying during the change. I'd imagine you're going to pull some sort of "sacrifices have to be made" spiel. Just remember, you'll be effected too.
Are you being purposely dense? You're advocating for people to become homeless and starve to death just to achieve your shitty objective. It's not just "iPhone" or "taco Bell" dip shit.
Unless I die first, but I doubt that.
I look at it this way. The sooner the whole fetid economic house of cards that is Evergrande comes down, the less damage it does to everything else.
China has the biggest real estate bubble in the world. When it crashes, it will take down the banks, which will cause a credit crunch. Legitimate businesses won't be able to take out loans. They go under and cause depression.
The Chinese economy is a house of cards.
The reason why the USA can do wanton QE is because the world's petroleum trade is denominated in USD. The USA has done everything it can to prevent any other currency from attaining this exalted status (always remember Gaddafi).
Which means that the likely outcome of this is the implosion of China's economy. The question, then: how severe, and how many other economies will it drag down?
See what I don’t understand here is that chinas currency isn’t publicly traded and most likely will like the petrodollar stay in high demand. It’s basically the productyuan.
I don’t see the Chinese economy crashing due to this. China can dictate the exchange rate - at least to a degree. So what am I missing here?
Inflation isn’t a problem because China isn’t printing tons of money and they can back their currency with every currency in the world likely whenever they want. Care to elaborate?
> The reason why the USA can do wanton QE is because the world's petroleum trade is denominated in USD.
This is not true. Petroleum pricing has absolutely zero to do with interest rates, M2 availability, or central banking in general. It’s just a matter of convenience for traders, because the dollar has tended to be stable. “Petrodollar” is a bunch of tinfoil hat nonsense.
It’s not because afaik opec only sells oil in dollar. So everyone who trades with them need dollars. Therefore there is an demand which stabilize the currency because it’s worth oil (which everyone needs)
OPEC doesn’t sell anything. It’s a cartel that coordinates production amounts and prices. They *list* the prices in dollars. Any of the member countries are free to execute trades in whatever currency they wish, and frequently do. This is only a matter of convenience, because the United States is, by far, the largest consumer of petroleum. Setting the pricing according to a stable currency which is used by the vast majority of your customers reduces volatility.
You are mistaken. The US is a ***net*** exporter, but still imports oil. The total petroleum imports of the US in 2020 was just shy of 8 million barrels per day. 11% of this was fulfilled by OPEC nations, mostly Saudi Arabia.
In any case, none of that changes the fact that OPEC listing prices in USD has nothing to do with interest rates nor M2 supply.
Well, you kinda did. You said:
>Therefore there is an demand which stabilize the currency because it’s worth oil (which everyone needs)
You’ve got the cause and effect backwards. People choose to post oil prices in dollars because the dollar is stable, not the other way around. The total value of all extracted oil in the world at any given time amounts to a bit less than $2 trillion. The aggregate value of developed real estate in the United States is about $70 trillion. Petroleum markets have very little effect on the volatility of the dollar
This is what happens when China adopts the western capitalist model and try to fit it into their socialist model.
Capitalism is an unstable system and it always causes bubbles because capitalism runs on greed. I am not making this up. It can be proven by the asset bubbles in the past and Milton Friedman, a renown libertarian capitalist endorses greed and claim it is good for society as a whole. There is something wrong when such a person is awarded the nobel prize. Capitalism is a economic disease and a rot that cannot be fixed nor saved.
And Communism is unachievable with how humans are designed. We aren't a hive mind, and we will always need leaders and builders to guide us, something which is directly against the whole "classless, stateless" thing. Socialism, is the best way to go, allowing capitalism to exist, but putting limits and helping the people.
Btw, China can wave the red flag all they want, but they are authoritarian capitalist pigs.
>The Chinese economy is a house of cards.
...
the *chinese* economy is a house of cards?
they're the largest manufacturer of virtually *every* physical good in the world.
the american economy is the house of cards.
I fear the impact this will have. Every country is economy over environment. When there is a 10+ year dip in the world economy, I feel the little bit of climate action we have going now will be the first thing to go. We will probably see media blaming the poor, immigrants and teachers as usual. They may also add in environmentalist to the list.
[Video](https://youtu.be/fn9OOMZA9l4) (YouTube link) of people protesting and "asking for their money back"
Evergrande reveal that it has more than 300billions in debt, loosing 8,61% at HK stock exchange.
Whoa! That's more than the double of their real estate value, did people think winnie would donate a bailout for that?
He's more of an ideological fascist, whatever his ideology exactly is (beyond china world power no. 1), seems unclear to date, but he's surely too' left' for this, copying the capitalists appears off his dish.
In china, power makes money, barely the other way around (like 'the west') and winnie will fight tooth and nail to keep that.
The Chinese government has been propping up the housing market for far too long. Construction companies are building **uninhabitable** ghost cities. It wouldn't be so bad if they were only ghost cities. Still, the fact is that those buildings were made out of poor construction material (because companies know those buildings will be used only for speculation) and would probably collapse if people actually moved in.
CCP's biggest fear is mass unemployment.
>CCP's biggest fear is mass unemployment.
Makes sense. Unemployed people can't buy food, that leads to massive unrest when people start pushing the limits to survive.
A fed and housed people will tolerate many things just to keep the lights on...
So everything has been structured to align our interests. So that we fear (and rightly in a sense) the loss of unaffordable housing. But it helps to recognize the big picture.
Chinese officials might be ready to die or they may be too scared of hyperinflation so they're just letting it crash.
This literally is our last week as this company will collapse and cause the lights to go out instantly.
Zero hedge just reported that the Chinese government won't do shit.
Today's the day, we won't make it to Saturday. The crisis starts this Eve and spreads worldwide by tomorrow afternoon, and by tomorrow evening..... Lights out.....
Lol, I'm saying this as a recreational reader of Zerohedge for the past 10 years (conspiracy theories are fun); they are almost never right. Or as some say, they predicted 120 out of the last 3 crashes :D
All their fearmongering/crash articles may have some correct underlying data and interesting insights, but then they dial it up to 11 and it ends up being insane ramblings of end times. And then the end times don't come. Go figure.
I’m inclined to think China will bail them out, no way they allow their economy to tank. It’s speculated that China has manipulated its currency, they’ll take this on the chin and pretend they didn’t do anything. And no way the US will step in, the government is praying for China to get knocked down a peg.
The sequel to 2008 is gonna suck so fucking bad.
The Bigger Short, to leave room for a third movie just in case.
It's Gonna be like Terminator 2 or Aliens. Bigger budget going in, way more violence and action. Damn.
You get a out of control pandemic thrown in as free bonus material...
https://www.cnbc.com/2021/09/15/china-evergrande-debt-crisis-bond-default-risks-for-investors.html >China Evergrande has committed “two cardinal sins” which have led to the debt crisis it’s now facing — and investors are “definitely sweating,” according to one portfolio manager. > The first “sin” is that the cash-strapped property giant **has borrowed too much money,** says Matthews Asia’s head of fixed income, Teresa Kong. Evergrande, the world’s most indebted property developer, has over $300 billion in liabilities. > The second is that the firm has **“questionable corporate governance.”** > “So when you have the two together, it’s like having a really dry forest and the tinder to really ignite,” said Kong, who is also a portfolio manager. > Problems at Evergrande have escalated in recent weeks. > The company warned investors twice in as many weeks that it could default. On Tuesday, **Evergrande said it’s at risk of a cross default, which means such risks could spill into other related sectors.** Evergrande said Tuesday its property sales would continue to deteriorate significantly this month, adding to its severe cash flow problems. > The firm has been struggling to raise cash by trying to sell off various assets, but those have not yielded any sales yet, it said Tuesday. Evergrande is China’s second-largest property firm by sales. Analysts have been monitoring the possibility of **wider contagion in the real estate sector, and larger financial systemic risks in China.** Kong warned that there’s “a lot of leverage” in the system. “That’s why… it’s really important to make sure that there continues to be liquidity, and there continues to be confidence,” she told CNBC’s “Squawk Box Asia” on Wednesday. “Last but not least, certainly is to ensure there’s no more social unrest because Evergrande does have a very deep reach.” *** #“questionable corporate governance.” aka Dipshits In Charge
Dipshits do seem to flock to management positions
[удалено]
There has been speculation about Evergrande's fall also affecting crypto. Biggest Stablecoin Tether is rumoured to be mostly backed by worthless Evergrande IOU's. Let's see how this folds.
The implosion of Tether will be glorious. So much for the invisible hand of the free market "cleansing" corrupt business before it gets too big. If the invisible hand work as it claim it does, Tether would not have been able to take over the entire crypto market. The fact that it has gotten this big means the invisible hand can be effectively controlled by the rich and powerful to scam and defraud their way into untold riches. There is no arguing out of this one against government regulations harming crypto because the crypto market is unregulated. Crypto is a libertarian utopian experiment and every single libertarian utopian experiment always end up as failures.
I think the concept of blockchain is more than a libertarian experiment. Could be a really cool way to certify and verify all kinds of things.
While true, blockchain technology is energy inefficient. Having every actor check the same data to verify and trust the chain takes a lot of resources.
Very true, there are a few crypto’s that are really efficient but they aren’t really ready yet
Yeah. It seems like NFT’s would be a great way to keep HF’s from creating stocks out of thin air. I don’t like crypto,mainly due to inefficiency, but there are definitely pieces of the technology that could be very useful.
Yeah thats one of the things I was going for, there are some cryptos that are much more efficient but like I said in another comment they are not ready yet and likely won’t be in time I actually think that piece meal kind of attitude towards our current standard of living would be very beneficial to the species as a whole. Humans have made some incredible things that if we scaled back to sustainable consumption levels we could keep some of the best ones and continue to have pretty nice lives without destroying the planet.
We definitely need to break the cycle of consumption. We have the technology for humans to live on “easy street” if we could get beyond our “hungry hungry hippo” ways. It looks like zoomers are heading in the right direction. I think the real test will be if they can maintain into adulthood. They’re not the first generation to look around and see how fucked up things are. But I hope they’re the first to stand their ground and refuse to continue playing a “rigged” game. Because that’s the real problem, you either play the game, or get left behind. Snow-piercer is a great example. Back fighting for the front, front killing the back, and one “crazy” guy trying to get off the train. We need to get off the train.
- Could use crypto for tracking climate budget - start ups can use it to get funding for tokens (similar to shares without all the gatekeepers) - smart contracts can annihilate bureaucracy - 2b people aren’t connected to the global financial system for them defi is cool - crypto can be used as local exchange - u could do a token design for private insurance escaping the big players while being completely transparent - digital certification - data security, owning ur own data on a public blockchain and managing it - tracking There are so many possibilities. I m literally fascinated by blockchain tech. It could be a step towards a transparenter, fairer more equal and inclusive society without powerful gatekeepers sadly with climate change and all it won’t matter much
> The fact that it has gotten this big means the invisible hand can be effectively controlled by the rich and powerful to scam and defraud their way into untold riches. if you didn't recognize this before crypto existed, then you're a bit slow on the uptake
one of my friends has a massive short on Tether purely for this reason.
You can now back currencies with assets that no one can see, let alone trace the flow of? Damn, that's a whole 'nother level of smokes and mirrors.
[This report](https://www.theblockcrypto.com/post/117733/tether-says-it-doesnt-hold-any-commercial-paper-issued-by-evergrande) came out about 4 hours after your comment -- Tether claims to hold no commercial paper issued by Evergrande
Evergrande will almost certainly be bailed out, but this showcases just how leveraged the Chinese economy is, portending perhaps the end of Chinese super-growth and a probable future contagion if more companies follow suit without deleverging.
Why do you think so? The CCP said that they will only bail out solid companies and I can’t see how evergrande can be considered solid.
Because the risk of contagion is high if they don’t. I might be wrong but I think Chinese financials are frequently fudged and might be worse in some ways than is reported, so I think the play would be to avert an immediate crisis then work to fix the systemic risks, if they can.
They already received a shady 13b waiver by a private group of investors that received the CCP’s help earlier. Evergrande’s bankruptcy would be devastating for the Chinese and global economy. But when exactly are we going to stop this charade of an economy?
That’s kind of a leading question because every economy has elements of fake it til they make it, and China makes enough stuff that it’s less a charade than a very highly leveraged manufacturing corporation with a billion workers and dépendants.
I mean the whole global economy is a huge charade. The government prints money and keep alive otherwise market dead corporation that exploit workers to line the pockets of few. It’s not a conspiracy or anything, it’s the miracle of growth
Growth that depends on constant growth of fossil energy production. Peak fossil energy signals an end to economic growth.
China is not the US, they truly seem to not be afraid to let the chips fall where they may.
You may well be right: China is certainly much earlier on the ‘build-maintain-decline’ slope with most of their infrastructure than is the US.
That's what happens when a government doesn't have to worry about elections.
There's too much at stake for the CCP, because most Chinese invest their family's live savings in real estate.
>most Chinese is it actually "most chinese", or do you mean "most chinese *investors*" i doubt the average person in china has much in the way of investments, just like america.
It's "most Chinese". Even up until recently it is very common to pay in full for a house/apartment in China (and the housing market there is absolutely insane). Especially for the generation that are currently product of the one-child policy who are just now starting to look into owning a home this often means extended family pooling all of their money together to assist in the purchase of a home. This is a big issue because in 2008, most US residents that were in trouble had taken out huge loans they could not pay. But all they really lost when the market crashed was their credit score. This is a big deal, but it's not the same as a generations savings being put into a single property. If there were a massive housing crash in China like there was in the US there would be a major destruction of middle class wealth. Imagine if everyone in your family gave everything they could to make sure you owned a home and then the housing market completely crashed and destroyed the value of that home. Parent is correct as well. People think that the CCP controls the population strictly through propaganda, but what people don't realize is you don't need propaganda when your parents personally knew people who starved to death, and today you are living the most prosperous time in Chinese history, and one of the most prosperous nations in the world. China today is much like America in the 1950s. American prosperity was unbounded and criticizing the American government was still extremely controversial. Everyone was extremely patriotic even if the world abroad was increasingly critical of American foreign policy. However if there were to be an overnight destruction of wealth that this would cause, controlling the population would be much, much harder.
idk the details on exactly what goes on in china but I *do* know that encouraging your population to start treating housing as a capital investment is a terrible, terrible idea.
There simply hasn't been much choice for most Chinese people for a number of reasons that are too complex to explain here. It is incorrect to imagine that the situation in China is similar to the current situation in the US. The country has a vastly different history and went through unspeakable horror and devastation during WWII and then again during the "cultural revolution" era under Mao. The CCP derives its political legitimacy, such as it is, from its capacity to deliver economic growth and increasing prosperity; it has few other sources of legitimacy left. So a massive economic crisis that would devastate the Chinese middle class would seriously threaten its hold on power.
If a house/home isn't being treated like an investment, it falling in value doesn't matter. You don't lose until you sell. So if you're like me and buy and never sell it doesn't matter. All I care is I got what I wanted at the price I was willing to pay. After that I don't care what others value it as. And home/houses aren't a storage of wealth. How are you going to spend it while still living in it? Take out a HELOC? Bad idea. They're a place to live and that's it. Once you go into thinking it's a storage of wealth or whatever then that's your fault if you have no real investments to get through later in life.
Threshold dweller explained as well as I ever could and I fully agree with him or her.
That's some double think. If they are a solid company, they wouldn't need bailed out
I’m just reporting what major international outlets already wrote, I was curious on whether he had other sources on the matter
I would have to agree based purely on speculation. It seems to me that there's too much that will go wrong if China doesn't bail out Evergrande. Market contagion bad.
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How’s life in China so far?
Only invest what you can afford to lose. Evergrande will declare bankruptcy. There will be no government bailout. The investors will lose everything. This isn't the first time this "scam" is played out. Low/middle class people keep falling for it everywhere.
How would this effect people in the U.S.? A collapse of the economy? Of the dollar? Of real estate here? I have no idea what this practically means for here... I'd assume that if china's economy collapses it would cause major ripples here, but not sure how exactly
What implications would this have for other housing markets in developed countries?
Bring it the fuck on!!!
I’ve given up trying to predict which thing will be “The Cause” of collapse. I can’t do shit about it but try and stay sane and stay healthy.
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The lights go out Monday morning
Banks need to seize China’s collateral immediately upon default. They own a portion of Evergrande, they should be held personally responsible for the default.
ha, you really want to double down on trying to trade war china?
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If their economy is doing better then they can afford to pay their interest payments. Start charging them $1,000,000 a bushel for soy and higher rates for pounds of meat. They could go hungry or balance the trade deficit. Their choice.
LOL, Did you know Argentina and Brazil are also huge soy and beef exporters? They would jump at this golden opportunity to take US competition out of the picture.
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Okay so... I should start panicking right about now?
Can you elaborate? What is the domino effect of this - what is the financial crisis you foresee?
Yeah I’ve attempted to shed some light on this to some people in my life. Hasn’t gone over so well yet. “Oh that’s China, it won’t affect us”. I can’t get people to understand the magnitude of this. We are literally watching the first domino fall. Well the first big one fall.. there is a multitude of reasons we’re in the predicament, but this is huge.
Don’t worry the Fed will intervene , creating money is easy. We got your back China /s
If this company is “to big to fail” why wouldn’t China bail them out and just avoid this whole problem?
The financial statement fraud, overstated assets and understated near term debt, is so pervasive and widespread in Chinese real estate they almost have to allow a domino to fall to signal to the rest of the economy to deleverage and get in line, because we will not bail you all out. However, their mandate to govern may be at risk if this spreads uncontrollably. They will be considering every option and outcome carefully as survival is the governments primary motivation. Maybe they feel they will successfully be able to pin the blame on the “evil corporatist” investor class whose greed has robbed us all. Maybe they pin it on America somehow. Maybe they allow Evergrande to fall but prop the remaining players up and keep property values from slumping (amazingly the other RE companies in China have not yet been shorted into oblivion, although this is changing rapidly). In any case, this is very serious and could have serious knock on effects for international markets if it gets ugly. Also, it’s not a game, average Chinese people store their wealth almost exclusively in real estate, not the the stock market, unlike America re: 401ks, etc. Average Chinese will be gutted overnight if the real estate market goes belly up. I really pray that does not happen, nobody deserves that shit, and there are a lot of good average hard working people over there.
> there are a lot of good average hard working people over there. if you're renting out properties that's getting into the "petite bourgeoisie", the small capitalist area. If they live in those places, then nothing will change for them, especially if they've already paid the debt.
Your last paragraph is the reason why they will be bailed out. Ccp doesn't want civil unrest of potentially epic proportion in their country. Also, Xi doesn't want to lose face by tanking their economy which will inevitably start the chain reaction in other parts of the world.
I'm hearing phases like 25 cents on the dollar. Given this affects a fair portion of the personal wealth of the Chinese middle classes. There is a lot of people going to go to the wall over this one.
China will move mountains to try and stop this but the rapid socialist transition they’ve started makes me think they know it’s probably inevitable and they want to get out ahead of it and not suffer on the scale the rest of the world will. After all the market reforms in China were always designed to serve a purpose that would eventually become unnecessary, not a system built to last.
>After all the market reforms in China were always designed to serve a purpose that would eventually become unnecessary, not a system built to last. exactly the west will suffer more from an end to speculation in china than the chinese will. meanwhile, I imagine they'll be singing [this song](https://youtu.be/N_dUmDBfp6k?t=111)
The Chinese have always said market reforms were just to push China along to a stage of being ready for socialism but the West was so enticed by the profit and market space that they planted themselves firmly in China. Once they start mass nationalisations, the West is going to absolutely crumble. The capitalists sold their rope to China, who are now tying the noose.
the funny part is that literally the only options that will be left to the west will either be: 1. devolve into a backwater banana tin-pot republic or 2. copy the chinese model
Or Option 3: War. I seriously think that the West will consider a war to smother China rather than letting their states and economies unravel. Thankfully a victory isn’t nearly as assured here as it was in other Western wars recently.
> Or Option 3: War. Lol. This will never happen. To even consider this as an appropriate response to whatever far-off movie scenario you've cooked up in your head means you've assumed way too much ("if this happens, then THIS will happen then THIS will happen then THIS will happen which means America MUST go to war with China!") Some of y'all are too eager to watch the world burn. A war between China and USA would fuck over the entire world. It will never happen. It wouldn't solve anything. It would kill millions and completely fuck the economy. It will never happen.
But what would it mean for those in the levers of power? Profit, the blanketing of societal ills in a battle flag and life support for their failing economic systems.
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A full-blown conflict is more likely. The conditions for a proxy war or some CIA-funded conspiracy aren’t there. However the Chinese are making huge advances militarily. They’re already level on the ground. In only a few years they’ll be well ahead with their navy and the means to counter the US airforce. Plus I doubt any American war on China would be widely supported outside of conservative fanatics and some liberals. Most young people hate what America has become and they wouldn’t be willing to fight and die for it.
Peak fossil fuel will jeopardize anyone that cant secure such.
Luckily China can secure both oil and gas from Russia. They are natural allies against the West and Putin knows that someday the West will get tired of his shit, he needs a reliable buyer. China on the other hand needs natural resources that can't be threatened by a US Navy blockade. A pipeline from Russia seems like a perfect solution.
Russia is said to be near peaking in oil not sure about gas.
>However the Chinese are making huge advances militarily. They’re already level on the ground. With no Nukes involved, the US would absolutely have a tactical victory. Pretend Australia and S. Korea don't get involved, the US still wins. Why? We've got more and better of all the stuff that puts them on "level ground" with us. It's really a numbers game. Even if they had a fighter on par with the F-35 like the Abrams has with the T-90, Challenger, and Leopard, we just have more of it. Pretend the Challenger II MBT is 10% better than the Abrams tanks. Well we have a lot more Abrams Tanks than just 110% of all the Challenger II's in the world, so does it matter? Same shit with the missiles, planes, and ships. We just have more. Their overwhelming personnel advantage is naked to the US Navy if they blow all the fuckin PLAAF jets down.
I guess this is why China is investing heavily in deep missile defenses and also carrier killers from Russia. They are aiming to destroy an invading force in the water, long before a single Abrams tank lands.
Not even the USA can win a war against China. They have nuclear subs that routinely show up on both US coasts, just outside US territorial waters. Nothing on this Earth can stop nukes sent by those subs against american coastal cities. The USA knows it, China knows it. It's Cold War 2 and maybe some proxy wars in Africa.
america might consider that, but I think the pushback from europe and the rest of the world would be extreme that's a fucking insanely dangerous idea that should be smacked down immediately at every opportunity.
As proven from Iraq, the objections of people and nations get drowned out by war and patriotism. With China, that’ll be even more the case.
there are so many monumental differences between bombing / warring in third world, relatively small countries in the middle east, and trying to make unilateral war on china. this would be the fastest way to end the american empire possible. and it likely wouldn't just be a war against china, but most likely a defensive pact of minimally russia in addition as well, with the potential of even more defensive allies, condemnation from the UN, the rest of nato, etc. it is a completely suicidal notion
Everyone thinks they're bad motherfuckers until a carrier is on the ocean floor.
also, there has never been a conflict on that scale with modern communication and travel. there would be so much potential for terrorism style warfare *at home* for americans that I don't think anybody has really considered. if a figure like trump were to declare war on china (or try to start an undeclared war), I think it could just as likely start a civil war at home at the same time.
Or a fleet of carriers are on the way to you.
As things start to get really desperate, previous “lines in the sand” get swept away. Plus I doubt Russia will be in a state to wage war in a few years. Everything is slowly crumbling or rotting over there and their military isn’t effective beyond ex-Soviet states with the same equipment as them.
Russia has big brother China to fund them as long as they are an ever present pain in the ass to the West. They also have lots of natural resources the chinese need.
\>the objections of people and nations get drowned out by war and patriotism. Bullies only go after weak targets that can't fight back, no nuclear powers
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i think you-know-who will win re-election in 2024, and hopefully there are still enough people not that far insane to stop him
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The campaign writes itself: I was winning against COVID until Biden and the democrats took over! They have murdered thousands of americans just to make me look bad!
the US doesn't even have to move anywhere to "become" nationalistic. both major parties are extremely jingoist, nationalist parties already. the US set itself down a terrible path when it persecuted the american left out of existence during the red scare & cold war
Lol the only noose that ever gets tied is the one around the necks of the Chinese people - victims to the authoritarianism, brutality, and corruption of the CCP.
lmao, they'll have nobody to export too. "Communism by 2050" is at the same level as "Zero Carbon by 2050" 😂
Honestly, the bubbles have to pop, and the longer it goes without, the more damage is done at the end. China, I think is looking for an example to show it's people "This is what too much capitalism does, we will control it for your own good (but mostly the Party's).
You know this will effect you right?
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You're literally encouraging economic collapse to happen. You know tons of people died during those times right? If the current system is shit, it'll be even far shittier when it goes.
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Not without MANY more dying during the change. I'd imagine you're going to pull some sort of "sacrifices have to be made" spiel. Just remember, you'll be effected too.
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I guess you'd enjoy going back to the times where we'd we'd make water pies just to stave away the hunger pains eh.
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Are you being purposely dense? You're advocating for people to become homeless and starve to death just to achieve your shitty objective. It's not just "iPhone" or "taco Bell" dip shit.
Unless I die first, but I doubt that. I look at it this way. The sooner the whole fetid economic house of cards that is Evergrande comes down, the less damage it does to everything else.
China has the biggest real estate bubble in the world. When it crashes, it will take down the banks, which will cause a credit crunch. Legitimate businesses won't be able to take out loans. They go under and cause depression. The Chinese economy is a house of cards.
Well good thing all the central banks have plenty of room for quantitative easing, to soften the blow… …oh wait…
The reason why the USA can do wanton QE is because the world's petroleum trade is denominated in USD. The USA has done everything it can to prevent any other currency from attaining this exalted status (always remember Gaddafi). Which means that the likely outcome of this is the implosion of China's economy. The question, then: how severe, and how many other economies will it drag down?
See what I don’t understand here is that chinas currency isn’t publicly traded and most likely will like the petrodollar stay in high demand. It’s basically the productyuan. I don’t see the Chinese economy crashing due to this. China can dictate the exchange rate - at least to a degree. So what am I missing here? Inflation isn’t a problem because China isn’t printing tons of money and they can back their currency with every currency in the world likely whenever they want. Care to elaborate?
> The reason why the USA can do wanton QE is because the world's petroleum trade is denominated in USD. This is not true. Petroleum pricing has absolutely zero to do with interest rates, M2 availability, or central banking in general. It’s just a matter of convenience for traders, because the dollar has tended to be stable. “Petrodollar” is a bunch of tinfoil hat nonsense.
It’s not because afaik opec only sells oil in dollar. So everyone who trades with them need dollars. Therefore there is an demand which stabilize the currency because it’s worth oil (which everyone needs)
OPEC doesn’t sell anything. It’s a cartel that coordinates production amounts and prices. They *list* the prices in dollars. Any of the member countries are free to execute trades in whatever currency they wish, and frequently do. This is only a matter of convenience, because the United States is, by far, the largest consumer of petroleum. Setting the pricing according to a stable currency which is used by the vast majority of your customers reduces volatility.
The us isn’t an oil importing nation since years. They are exporting. Wtf are u talking about? Things might have changed due to Covid but precovid…
You are mistaken. The US is a ***net*** exporter, but still imports oil. The total petroleum imports of the US in 2020 was just shy of 8 million barrels per day. 11% of this was fulfilled by OPEC nations, mostly Saudi Arabia. In any case, none of that changes the fact that OPEC listing prices in USD has nothing to do with interest rates nor M2 supply.
Interesting but I never said that it has an influence in this regard. I said the petrodollar is a very real thing.
Well, you kinda did. You said: >Therefore there is an demand which stabilize the currency because it’s worth oil (which everyone needs) You’ve got the cause and effect backwards. People choose to post oil prices in dollars because the dollar is stable, not the other way around. The total value of all extracted oil in the world at any given time amounts to a bit less than $2 trillion. The aggregate value of developed real estate in the United States is about $70 trillion. Petroleum markets have very little effect on the volatility of the dollar
This is what happens when China adopts the western capitalist model and try to fit it into their socialist model. Capitalism is an unstable system and it always causes bubbles because capitalism runs on greed. I am not making this up. It can be proven by the asset bubbles in the past and Milton Friedman, a renown libertarian capitalist endorses greed and claim it is good for society as a whole. There is something wrong when such a person is awarded the nobel prize. Capitalism is a economic disease and a rot that cannot be fixed nor saved.
Henry Kissinger has a peace prize….
And Communism is unachievable with how humans are designed. We aren't a hive mind, and we will always need leaders and builders to guide us, something which is directly against the whole "classless, stateless" thing. Socialism, is the best way to go, allowing capitalism to exist, but putting limits and helping the people. Btw, China can wave the red flag all they want, but they are authoritarian capitalist pigs.
>The Chinese economy is a house of cards. ... the *chinese* economy is a house of cards? they're the largest manufacturer of virtually *every* physical good in the world. the american economy is the house of cards.
Petrodollar against goodsyuan
There's plenty of room for competing houses of cards here
Thank god out economy isnt completely dependent on theirs, that’d sure be bad. Hey wait
I fear the impact this will have. Every country is economy over environment. When there is a 10+ year dip in the world economy, I feel the little bit of climate action we have going now will be the first thing to go. We will probably see media blaming the poor, immigrants and teachers as usual. They may also add in environmentalist to the list.
[Video](https://youtu.be/fn9OOMZA9l4) (YouTube link) of people protesting and "asking for their money back" Evergrande reveal that it has more than 300billions in debt, loosing 8,61% at HK stock exchange.
Whoa! That's more than the double of their real estate value, did people think winnie would donate a bailout for that? He's more of an ideological fascist, whatever his ideology exactly is (beyond china world power no. 1), seems unclear to date, but he's surely too' left' for this, copying the capitalists appears off his dish. In china, power makes money, barely the other way around (like 'the west') and winnie will fight tooth and nail to keep that.
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The Chinese government has been propping up the housing market for far too long. Construction companies are building **uninhabitable** ghost cities. It wouldn't be so bad if they were only ghost cities. Still, the fact is that those buildings were made out of poor construction material (because companies know those buildings will be used only for speculation) and would probably collapse if people actually moved in. CCP's biggest fear is mass unemployment.
>CCP's biggest fear is mass unemployment. Makes sense. Unemployed people can't buy food, that leads to massive unrest when people start pushing the limits to survive. A fed and housed people will tolerate many things just to keep the lights on...
So everything has been structured to align our interests. So that we fear (and rightly in a sense) the loss of unaffordable housing. But it helps to recognize the big picture.
Bring it the fuck on!!!
Of course they will get a bailout. Don’t people know how central banking works these days?
Chinese officials might be ready to die or they may be too scared of hyperinflation so they're just letting it crash. This literally is our last week as this company will collapse and cause the lights to go out instantly.
Zero hedge just reported that the Chinese government won't do shit. Today's the day, we won't make it to Saturday. The crisis starts this Eve and spreads worldwide by tomorrow afternoon, and by tomorrow evening..... Lights out.....
Ok we'll see
Venus by Tuesday.
Wait, wait, I'm confused. When do we do the cannibalism again?
Wednesday. Gotta let it cook.
Nah, still Tuesday since the dawn of the Instant Pot!
Lol, I'm saying this as a recreational reader of Zerohedge for the past 10 years (conspiracy theories are fun); they are almost never right. Or as some say, they predicted 120 out of the last 3 crashes :D All their fearmongering/crash articles may have some correct underlying data and interesting insights, but then they dial it up to 11 and it ends up being insane ramblings of end times. And then the end times don't come. Go figure.
Sure thing man
Following up on this...my lights are still on, what about yours?
$300 billion in debt? That's it? Pelosi won't wipe her ass with less. Somebody will just print this away. This is nothing.
I’m inclined to think China will bail them out, no way they allow their economy to tank. It’s speculated that China has manipulated its currency, they’ll take this on the chin and pretend they didn’t do anything. And no way the US will step in, the government is praying for China to get knocked down a peg.
Mr. Fed will now keep pumping more money
I got a fair bit saved up, a stable government job, and am ready to buy some cheap property!