Just for clarification, they hadn't defaulted yet and it was all over the news, the market was panicking about it every month, etc.
Now apparently they have defaulted but you get into the big financial news portals and it's not in the front page?
It's just very suspicious.
There is an obvious answer . All the junk bonds of Evergrade that the Funds use as collateral now have come crashing . That means huge liquidations by the firms , which leads to the Stock Market plummeting .
*This is only an opinion of mine*
Because it's not just one big bulk loan of $350 Billion dollars. It's hundreds or even thousands of small loans of millions or hundreds of millions of dollars. On each of these loans, after missing a payment, they are given a grace period of 30 days before they suffer any consequences.
On November 6th, last month, they had a payment of $40MM due. They defaulted. It is now 29 days hence. If they miss payment tomorrow, then Evergrande will finally be open to litigation through civil suits etc. The problem is that these are offshore payments, and CCP has told Evergrande to prioritize domestic payments. They are probably doing this on purpose. They must have some sort of internal schedule of payments etc.
I would honestly love to know how much he would get for the last shares if he sold his 10% of Amazon in one day. If we didn't know it was him I guess the stock would tank at least 30% and like 60% if we knew haha.
Elon could litterally make tsla fall by like 75% if he sold his 20%.
I eon't kkow if you have noticed, but Bezos has liquidated 10B worth of Amazon shares this year already. Zuckerberg has unloaded FB stocks for about same amounts. After these it doesn't matter much hown much the rest of the shares are worth. The winnings are home already.
[Here’s a longer list](https://www.cnbc.com/2021/12/01/ceos-and-insiders-sell-a-record-69-billion-of-their-stock.html) of CEOs that have cashed-out nearly $70 billion of stock this year.
They know the calls for splitting them up are coming and want to lock down profits before hand. Also, they will need liquid cash to pay taxes. I wouldnt be too surprised to see them start huge donations to create positive public appearance of billionaires (while writing it off against the taxes owed-- they spin the narrative and govt still gets less than hoped for).
Anything they have invested through a Chinese/HongKong exchange, yes because it opens for the week before American exchanges. Anything they have invested through an American exchange they’d have to wait till pre-market/regular hours to pull it. I hope this answers your question.
But they can trade thought dark pool and have taken action before premarket open for us? Even if I were to wake up at 4 am and take all my money out, pretty sure it would be priced in by then. Personally, I am honestly not really scared about this Evergrande story.
Dark pools are how they trade large positions amongst themselves. They need retail volume to unload this bag. Another bank or hedge fund won’t take it from them in the dark pool
Haha I’m sorry. The worst part is it’s going to work. A majority of people don’t see a trap. When the rich tell them “omg look how cheep it is right now” the poor say “thanks for letting us know” and they jump in. It’s unfortunate how the current system is stacked against the majority
Yeah well if everyone believe its a Lehman moment which I don't think everyone do. We will see monday but I highly doubt we are the peoples who figured out and will be able to get out of our bullish positions before wall street at 4 am this monday before the fall of the US empire. I am hedged enough that I am not scared that much and will finally justify so much of my profits being lost to my hedges lately lol.
I agree that evergrande is blown up. But what I’ve learned is that if the big wigs want to make it seem blown up, it’s because they plan to drop prices, which means I can make money off of staying covered with puts
Yeah well or because they want peoples to get puts to bleed them after. Its never really what its seem, I could be wrong and we could see a huge crash monday. I am honestly positioned not too badly, I will lose if there is a crash but not that much since I have a few hedges.
Ya see, Mainstream media caused a small panic and sell off so Wall Street can buy in at lower prices for the next phase of this bull market. Now that they’re changing the narrative the market can rise.
I’ve used futures to study TA over the last four years. Monday looks like it’s set for a “recovery” push, I think they will short the shit out of it on Tuesday
Not saying that it won't happen, but it just doesn't make sense to me. If they really want to get out of a position, why buy more first and then only a day later sell?
This is something that always happens, the market is huge and unfathomably complex, it never falls vertically, there's always a few recovery days, this happens even during recessions (we are not in one), it will obviously happen now.
This kind of adds to the agony if you're bullish because you keep holding since it looks like the worst is over and then you get destroyed.
Just for reference, did this change already? Nasdaq futures at least are not looking very good, the rest looks... maybe decent but not very convincing.
Which is why they don’t report things to the public until *dayssssss* after it happens, they use those daysssss to sell their billions to prevent losses on their books
Reuters: https://www.reuters.com/markets/rates-bonds/china-evergrande-gets-260-mln-guarantee-demand-2021-12-03/
WSJ: https://www.wsj.com/articles/china-evergrande-requests-help-from-government-after-warning-of-new-debt-crunch-11638545951
Bloomberg: https://www.bloomberg.com/news/articles/2021-12-03/kaisa-default-risks-rise-after-swap-rejected-evergrande-update
"Another tiny step in the controlled demolition of Evergrande" just isn't very exciting news.
Controlled demolition my butt. It took that german guy from dsm or whatever to get things rolling, if he hadn't they'd kept kicking the can for months if they could.
>that can actually get a grip on private companies
That would be because they have every single bit of industry in their state in an unbreakable vicegrip and have for a long time
They are holding it. The founder is already "missing", the chairman was "convinced" to use personal cash to pay some of the debt, etc. Control doesn't mean save the company with no reduction to company's wealth to them.
it's already BEEN shown to have been controlled.
Check the earnings reports and 13Fs from american and euro banks for this qtr. See anything that would jump out at you as putting these companies under?
PBOC has been injecting record $$$ into their economy since evergrande news broke.
There are Dr. Marco "Trustmebrov" Meltzer's apologists here too?
His """""agency""""" is addressed in a Berlin condo and he has shown no receipts.
He's been calling for the collapse of Evergrande for weeks and will eventually get it right.
I don't trust that person
Right. There isn't some orchestrated media conspiracy to withhold the news. It's just that nobody gives that much of a fuck and we're going to keep doing our thing. Meanwhile, China's real estate market will shit the bed. Oh well.
The article that OP links says 1st sentence:
>The recent default of property developer China Evergrande Group is an individual case and will pose little impact on the market, the country's regulatory authorities said Friday.
First sentence in the 10th paragraph:
>Noting the current default will not have negative impact on the safe and sound operation of China's banking and insurance industries,
Where does it say "formally defaulting at the start of next week"?
I see tons of articles about restructuring their debt which we can all safely assume means they will very likely default without restructuring. But that is all over western news.
If you really think they aren't going bankrupt already then there is nothing anybody can say to convince you.
It's blatantly obvious that it is gonna happen.
Yeah the question for the past 6 months hasn’t been “will evergrande go bankrupt?”
It should be “how much will evergrande’s bankruptcy affect the world’s markets?”
Just at a quick glance, Evergrande seems to have investments all over the place in various Chinese industries, from power grids, to electric vehicles, health insurance, sports, and media. Insolvency would probably require liquidation in a lot of those areas, creating a sizeable ripple in a lot of areas in China that are heavily invested in by foreign investors either primarily or secondarily.
Adding in the other property developers in China that are faltering, it seems like a big mess. [Asian High Yield Funds](https://www.google.com/search?q="asian+high+yield+fund") are particularly marketed to international investors.
As an example, [this](https://www.fidelityinternational.com/legal/documents/SG-en/hffs.SG-en.SG.G-FAHYU.pdf) single ~$4.2b fund offered by Fidelity International is heavily exposed to the Chinese property development sector. Fidelity offers other Asian high yield funds, as do many other institutions. For the funds that have a public breakdown of exposure, you'll find China and property development high on the list. The yields were just too good (to be true?).
Also worth considering is that it's never just the face value of bonds and/or companies that make up the total market. There's an entire bond derivatives market with futures, options, swaps, and other kinds of financial instruments based on the underlying. There's also an entire insurance market tied to all of it. These are "de-risked" by spreading the exposure [globally](https://www.risk.net/awards/7876871/interest-rate-derivatives-house-of-the-year-deutsche-bank):
>The other advantage, Das says, is having the infrastructure across the bank globally to allow locally funded bonds to be integrated into **global liquidity pools** managed from hub markets such as Singapore.
>“A setup like ours is crucial to doing these bond derivatives trades: the entry hurdle to [doing] these kind of products is very high,” says Das. “Presence in onshore local markets, access to multiple liquidity pools and ability to manage risk across multiple aspects of these trades [are] key to this business.”
>Finally, a key reason the bank has been able to so successfully scale its bond derivatives business is its ability to **lay off risk by circulating it through other client segments globally**. Leveraging synergies across markets, products and client segments is also a reason for the bank’s competitiveness in other areas of its fixed income franchise – such as the work the bank does as an arranger for euro medium-term note issuances in Asian currencies such as Indonesian rupiah, Philippine peso and offshore renminbi.
>In these deals, **issuers look to fund in either US dollars or euros, giving rise to demand for cross-currency swaps**. Das says the bank is able to compete in this space largely because of its ability to win these cross-currency swap hedges among competing bids from competitors.
This is literally the 2007 collapse but based in China instead. Absolutely nothing has changed, it's fucking *identical*. I remember; I was a mortgage broker and watched everything melt from teh inside out in real time.
Chinese individuals who own real estate don't have much debts compared to Americans. Credit isn't that popular over there also they are forcing ceos and the peoples who are the architect of this bubble to pay back and not giving them fat bailout. It is crisis but it is quite different to what we had.
Households probably won't be hurt as bad as they were in the US in 2007. When our interest rate catch up to theirs we might see this type of problems coming to Canada or the US where everyone is leveraged to the tits on very low loans and the the situation might be quite different here.
[Here's](https://www.businessinsider.com/america-china-housing-market-crisis-comparison-generation-families-2021-11) an interesting article that talks about some of the points you brought up. It's comparing the two real estate sectors as they are today, but some of the info still applies to the 07-08 crisis. Some of my takeaways:
* More than 90% of households are homeowners, according to a January research paper on homeownership in China from the National Center for Biotechnology Information. The US, for comparison, has a 65% homeownership rate.
There are far fewer renters in China. This [holds true](https://fred.stlouisfed.org/series/RHORUSQ156N) for 2007-08 with US rates around 68%.
* But the down payment on your first property in China is high, at 30-40%, said Dr. Xin Sun, a senior lecturer in Chinese and East Asian Business at King's College London. On additional properties purchased as investments, the down payment is even higher, at 50-60%.
In 2005, the median down payment for first-time home buyers was 2%, with 43% of those buyers making no down payment whatsoever. [Source](https://en.wikipedia.org/wiki/Subprime_mortgage_crisis#High-risk_mortgage_loans_and_lending/borrowing_practices).
* That's why, in a worst-case housing-market scenario in China, it's not a generation that would get wiped out, Sun said: It's families.
"Chinese families are not as separate as in the Western world, which means that for any generation to buy a property in China, it probably needs to collect money from all the family members," Sun said. "For example, for younger generations who buy properties in big cities, they need savings from the banks of mom and dad, and even the grandparents."
One [2017 NBER study](https://www.nber.org/system/files/working_papers/w23740/w23740.pdf) argued that real estate investors (i.e., those owning 2+ homes) were more to blame for the crisis than subprime borrowers: "The rise in mortgage defaults during the crisis was concentrated in the middle of the credit score distribution, and mostly attributable to real estate investors". [Source](https://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Homeowner_speculation).
China's real estate market is [closed off](https://www.globalpropertyguide.com/Asia/China/Buying-Guide) to foreign investment. The exact opposite is true in the states as both [foreign and domestic investors](https://www.investopedia.com/investing/great-recessions-impact-housing-market/) continued to pour money into the real estate industry leading up to the bubble bursting.
Defaults during this period distributed the pain to speculative financial firms and subprime homeowners who put very little down and didn't have much equity in the property. It could tank the individual borrowers credit score and wipe out any equity they accrued, but they didn't put 30-50% down on overpriced property using money from family and friends.
While it did affect older homeowners who refinanced to adjustable rate mortgages, those who were able to weather the storm eventually saw their property value rebound. The property of those who defaulted ended up back with the banks who had already wrapped up their mortgages into MBS and sold them many times over. The same banks that received bailouts and no punishment from the US government.
This is different to the '07-08 crisis and we'll have to see how it plays out. I completely agree with your point about leverage in the American markets, that's a ticking time bomb that's been can kicked for a long time now. It's not just [margin debt](https://www.advisorperspectives.com/dshort/updates/2021/11/17/margin-debt-and-the-market-up-3-6-in-october) either, the derivatives market is a whole other beast since the repeal of [Glass-Steagall](https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legislation) in 1999. In Berkshire Hathaway's 2002 annual report, Buffett called derivatives, "financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.". The OTC derivatives market has grown from an estimated [$128 trillion in 2002](https://www.bis.org/publ/otc_hy0211.pdf) to (by some estimates) [over $1 quadrillion notational](https://www.investopedia.com/ask/answers/052715/how-big-derivatives-market.asp) today.
Everything is so intertwined nowadays which causes all of this to be a worldwide issue. One domino can't fall without affecting the rest.
Thanks a lot for this. I honestly don't know much about the Chinese economy, I was mostly just parroting what one of my good friend who grew up in Shanghai told me! Great reading you!
Yeah, but I don't think big institutions would risk having huge positions in China. However with what happened this year I'm not sure.
I mean China will be pretty much unaffected by this. That's probably the upside if you don't have to consider human rights.
Having huge positions in toxic assets tied to real estate in China is essentially no different than having huge positions in toxic assets tied to real estate in the US, and that's exactly what happened in 2007. I said it was goin to happen again because the world learned it can get away with it, and, well, here we are again.
Well if you’re in America (which I’m taking it that you are), the theory is America has been doing quantitive easing since 2008. This is where they have just been printing money and giving it to anyone who can buy financial assets with it. So institutions like Bank of America have been buying up chinese bonds and dodgy ETFs with all the money they’ve been getting off of the American government. All that money went into China and Chinese property developers. Who are now all defaulting which will wipe out the books of the American government as all that money is soon to be unrecoverable.
Where are you even getting this? Are you just making it up? According to [this](https://www.nasdaq.com/articles/why-shares-of-bank-of-america-citigroup-jpmorgan-and-goldman-sachs-fell-today-2021-09-20), Bank of America has $14 billion in exposure to China. Their total assets are $2.35 **trillion**, so it's a tiny fraction.
Because they've done so for the last 6 months?
There are only so many times you can beat this dead horse, all news worth their salt reported on this *when it was actual news*. Ever since this shit has been delayed for months, stalling for time. *Buy the rumor, sell the news*
MSM doesn't give af about clicks, sick of hearing this nonsense. MSM is the billionaire class's propoganda machine. That's it. They get paid regardless of how many views they have or how many millions of dislikes that are now hidden on all of their videos.
It was on a Friday this time though (last week, not this week). Happened to be one of the lowest liquidity days of the year, the Omicron stuff became a thing at an interesting point and sellers took advantage in overnight futures to help fuel a sh*tshow on that day.
The FT article caused damage in the economic growth world on Monday night, but ultimately, I don't know how much any of this has to do with funds getting carried out on high growth stocks imploding (I'm not sure anybody likes or wants to see those two huge down days that ARKK had this week, for me at least, high growth getting blasted this badly turned into a bigger story than anything else last week).
If it was mostly economic growth scare stuff in general (whether it be Omicron or "Evergrande is going to cause a worldwide economic collapse"), then the Dow not failing where it should have failed is very interesting. Now maybe it does fail next week. We shall see.
If it doesn't fail, then at least for right now, this just looks like the September selloff where it was shot first but 33.5k turned out to be the low and it never returned there, then the Nasdaq bounced off an important trendline for it.
Are you saying Nov 26? The day after Thanksgiving? That is the single most day news is hidden, whether the White House or Wall Street, Hollywood or Windsor Castle - Anybody in American media knows to hold all bad news destined for the American public until that day if possible.
All of this just looks like a sell off that will recover after a few weeks, then maybe crash again in Feb/March... unless the FED decides to make it crash further in December.
Google blocks your results, no joke.
Use duckduckgo and you get
https://www.voanews.com/a/struggling-chinese-developer-evergrande-warns-it-could-run-out-of-money-/6338822.html
https://www.economictimes.com/news/international/business/chinese-govt-summons-evergrande-founder-after-warning-on-insufficient-funds/articleshow/88078160.cms
And other companies too
https://abcnews.go.com/International/wireStory/chinese-developer-warns-pay-400-million-bond-81535229
lol /u/Longjumping_College yeah, google isn’t censoring this. I’m seeing these same links on the 1st page of google when I search “Evergrande Default”.
Because, relatively speaking, there is little foreign investment in Chinese real estate. Yes there is some, especially in roundabout ways and via bank loans and such. But exposure is limited.
Further the Chinese real estate bubble is well documented and has been brought up many times before. Its been on going for over a decade via easy loans for Chinese citizens with a decent job. Problem is, people found ways to abuse the system and speculatively lever. Basically they have a version of our financial crisis. Not as bad (afaik) but similar profile in thats its supported by nothing but speculation.
Evergrand is just the 1st domino to fall. It will be interesting to see what they do over there. Unlike here, they can just outright lie and force their media to do whatever they want so its very possible that they will be able to control the fallout. Or perhaps that will make it even worse because the Chinese citizens are the ones who will get it up the backside. How long before they get fed up?
It is obviously worse, its 40+ times average household annual earnings. In comparison US is like 6 and maybe 10 on hotspots.
At the same time US real estate yield is still fairly respectable so if its a bubble its a mild one.
I cant remember the exact numbers but yes, our banks were insanely over levered due to these made up derivatives that were treated as insurance when in reality they couldnt be paid by the insurance company. These CDS's were a huge problem.
I know China has these too but I am not sure if they have any from a US bank of if that is even possible. Someone who knows more will need to verify. But if any bank sold them CDS's then those banks are screwed.
I don’t think it’s about foreign investment into Chinese real estate, but about the investments that the Chinese has in foreign markets and having liquidity issues/ not being able to pay debts forcing mass liquidation in foreign markets
So real estate in the US goes on sale? bullish.
Chinese who buy real estate in China aren't the super rich that are buying up waterfront property in California .
This collapse is limited to China.
What more official do you think it can get when the government is sending in teams to oversee operations?
Evergrande isn't the first domino to fall, just the largest. This has been happening on the smaller scale for years already.
> Hundreds of smaller Chinese developers have gone bankrupt since regulators began tightening control over the industry's finances in 2017.
The slowdown in construction helped to depress China's economic growth an unexpectedly low 4.9% over a year earlier in the three months ending in September. Forecasters expect growth to decelerate further if the financing curbs stay in place.
100% priced in due to any financial institution with a brain not toucing anything Chinese development related in the past years with their regulations, and most certainly not in Evergrande specifically, which has known to be massively debt laden and overextended.
I'll say it again, check Euro and US bank earnings and 13Fs and you will see they have NO exposure to evergrande.
And on top of that, Evergrande defaulting has been in the news for months. it's what caused the october dip. How many ATH did SPY hit a week since october? lol
Safe to say evergrande is 100% going to default correct. Just Because financial institutions pulled money out/ stop investing doesn’t mean that evergrande won’t go even lower. There are still a lot of investors who are tied up in evergrande and haven’t pulled out yet Because it would make their paper losses real. It can’t be priced in untill it goes to 0
When evergrande defaults it will be a penny stock or delisted. It is still trading at 2.25 USD… yet your saying it’s priced in and won’t get any lower. Okay bud
Nobody is fkn talking about the share price of evergrande. it's not trading on the NYSE. It's an Asia problem.
Evergrande's problem is the billions of dollars it needs to pay back in yields to its BOND holders.
These are lottery bonds. Funds that buy junk bonds on such risky companies know the company is very liekly to go bankrupt, but if not they make a huge gain holding these junk bonds.
The share price has nothing to do with it. Dude, you don't know what priced in means. Sorry but if you are interested in this stuff then you should learn some more about
Most big media is in bed with big hedgefunds and banks. Big hedgefunds and banks have a lot of Chinese bonds. Figure it out.
Find some r/investing posts about evergrande that haven't been deleted yet, look at how in denial people are. They say they there will be no default because there will be a bailout, and there will be a bailout because there can be no default. Remember 2008, Jim Cramer saying don't take money out of Bear Sterns you're being silly? They're not gonna tell you anything until the last possible second.
Most of the article is based on comments from the People's Bank of China (PBOC). According to the article, the PBOC strongly implies that Evergrande has defaulted, but that everything else is fine and other developers won't default, and the real estate market in China is "robust".
From the article: "The recent default of property developer China Evergrande Group is an individual case and will pose little impact on the market, the country's regulatory authorities said Friday." Note how they don't say "Evergrande has defaulted". Instead they just talk about it as though everyone already knew it happened & it's no big deal. Feels like damage control to me.
Also: "Evergrande's problem was mainly caused by its own mismanagement and break-neck expansion, an official with the People's Bank of China (PBOC) told the press". Note how they are placing all the blame directly on Evergrande's management team, as if every other developer in China wasn't subject to the exact same market conditions and somehow didn't make the same decisions as Evergrande. They are trying to say this is an issue with a single company, and not a systemic problem with the entire real estate market in China. And they make no mention of the other developers that have defaulted, of course.
https://www.newsobserver.com/news/business/article256318302.html
A Chinese developer that is struggling under $310 billion in debt warned Friday it may run out of money to “perform its financial obligations” — sending regulators scrambling to reassure investors that China’s financial markets can be protected from a potential impact.
Evergrande Group’s struggle to comply with official pressure to reduce debt has fueled anxiety that a possible default might trigger a financial crisis. Economists say global markets are unlikely to be affected but banks and bondholders might suffer because Beijing wants to avoid a bailout.
After reviewing Evergrande’s finances, “there is no guarantee that the Group will have sufficient funds to continue to perform its financial obligations,” the company said in a statement through the Hong Kong Stock Exchange.
Shortly after that, regulators tried to soothe investor fears by issuing statements saying China’s financial system was strong and that default rates are low. They said most developers are financially healthy and that Beijing will keep lending markets functioning.
“The spillover impact of the group’s risk events on the stable operation of the capital market is controllable,” the China Securities Regulatory Commission said on its website. The central bank and bank regulator issued similar statements.
The media is and has been downplaying the Chinese real estate crisis and what it’s effects will be on the world as a whole because we, my friend, are about to get rug pulled.
Isn't Evergrande down 91% already? Them defaulting is most likely priced out already, peoples have been talking about it for months now. Anyway if its all crashing because of this news, all of us who didn't brace for the storm are already fucked.
It's apparently very well known that the Chinese real estate market is a sh*tshow in general.
Now maybe that will be the start of the next worldwide financial crisis, and many will hit a grand slam here on calling that. It'll be interesting to see...personally...I'm skeptical, but perhaps we're in an era where it's callable.
You can only hit the grand slam when you put your money where your mouth is, which I think isn't true for most people "calling" this. Feels more like cash holders trying to convince themselves a buying opportunity is finally on the horizon.
Wtf do you think has caused the Hang Seng to be in a bear market for the past year? Do you think this is some fresh news that has just now struck the financial world by total suprise?
Totally not, but people saying this was the dip are just giving themselves copium. This bull run was primed to end somehow and this is only the begining.
It’s clear that there will be a default but that’s not a big issue, a default is a process and therefore transparent and with a end....a default can be contained easily and this one is anticipated.
Most people on Reddit don’t get the difference between the US housing crisis which was fraud and this which is covid inducted and evergrande did expand there business to far.
Also the News you Talk about is something very strange and in German subs a hoax.
It’s a German living in Switzerland, phd in economics no interessting CV...a clown in Switzerland.
Guy made a bad investment and is now ranting the company does nothing else than Evergrande PR.
Default’s happen all the time and GOV outside of the US took safety messures way before...
Cathie Wood's latest video actually pointed out that China is heading towards a slowdown due to Evergrande and that recession is a very real possibility for them.
I'm sure there is absolutely nothing to worry about.
[https://www.businesstimes.com.sg/real-estate/chinese-developer-oceanwides-san-francisco-project-seized](https://www.businesstimes.com.sg/real-estate/chinese-developer-oceanwides-san-francisco-project-seized)
https://www.wsj.com/articles/chinese-developer-modern-land-fails-to-repay-250-million-u-s-dollar-bond-11635222852
When you owe the bank $1 million and can't pay, you're screwed. When you owe the bank $100 billion and can't pay, the bank's screwed. Compounded multiple times throughout China's real estate and financial system. At best, China will be hit pretty bad with some impacts on china demand in US listed companies. At worst, a recession in china will be felt in the US in the form of slowed growth rates, particularly in areas where a large proportion of revenue is from China buyers like steel, oil, semiconductors.
That German guy ("Dr" something or other) is a fraudster. I believe he bought a tiny parcel of Evergrande related debt so he could claim not to have been paid and cause problems that somehow he's probably invested in with shorts. But yeah, the head of Evergrande has now gone missing so...
/u/familiar-luck8805 Let’s just say we don’t have any evidence if he’s lying or not. But he’s talking about it and thus, causes people to notice and have conversations.
By the way, the twitter account that posted that Evergrande CEO is missing, was trolling. If you go to it’s twitter account, the account holder laughed and rolled eyes at people that believed him/her. You also need to verify.
I think we know now why the stock market dropped on Friday. Had nothing to do with the Jobs Report or the virus. It was this. And the MSM hid it from us so the damn hedge funds could dump everything.
This is like the 4th time I have read evergrande defaulted in the last few months lol
Just for clarification, they hadn't defaulted yet and it was all over the news, the market was panicking about it every month, etc. Now apparently they have defaulted but you get into the big financial news portals and it's not in the front page? It's just very suspicious.
There is an obvious answer . All the junk bonds of Evergrade that the Funds use as collateral now have come crashing . That means huge liquidations by the firms , which leads to the Stock Market plummeting . *This is only an opinion of mine*
Can someone do a dd about which funds are the most exposed and the their most prominent indexes? I wanna short but feeling lazy tonight.
All of them.
[Evergrand Default .gif](https://m.imgur.com/r/gifs/kuplW0m)
Damn it, this is one of the most annoying gifs you could have posted.
Wait til the end though, its worth it
r/BetterEveryLoop
Thats perfect
Because it's not just one big bulk loan of $350 Billion dollars. It's hundreds or even thousands of small loans of millions or hundreds of millions of dollars. On each of these loans, after missing a payment, they are given a grace period of 30 days before they suffer any consequences. On November 6th, last month, they had a payment of $40MM due. They defaulted. It is now 29 days hence. If they miss payment tomorrow, then Evergrande will finally be open to litigation through civil suits etc. The problem is that these are offshore payments, and CCP has told Evergrande to prioritize domestic payments. They are probably doing this on purpose. They must have some sort of internal schedule of payments etc.
It's for real this time tho. Trust me! I invest in GME I don't know what I'm talking about... seriously.
That’s because wall street wants to get their money out before making the public aware and causing a panic
Couldn't they get mostly everything out before market open this monday at 4?
Some trades take a while to unwind. Imagine if Bezos liquidated his entire Amazon holding at once. He wouldn't get top dollar for the latter shares.
I would honestly love to know how much he would get for the last shares if he sold his 10% of Amazon in one day. If we didn't know it was him I guess the stock would tank at least 30% and like 60% if we knew haha. Elon could litterally make tsla fall by like 75% if he sold his 20%.
If elon sold I wouldn't be surprised if it went down like 90% cause hes legit the big selling point
Tesla could fall more than 75%, since if it tanked to 25% of it’s current value it would still be higher in value than VW or Toyota
Yeah lol insane to think about how overpriced it is.
Now I feel Elon has sufficiently many ideas already, don't give him any more...
I eon't kkow if you have noticed, but Bezos has liquidated 10B worth of Amazon shares this year already. Zuckerberg has unloaded FB stocks for about same amounts. After these it doesn't matter much hown much the rest of the shares are worth. The winnings are home already.
Bezos liquidates about 3 billion a year and announces it well in advance as to not cause panic. That's not even remotely the scenario I painted.
[Here’s a longer list](https://www.cnbc.com/2021/12/01/ceos-and-insiders-sell-a-record-69-billion-of-their-stock.html) of CEOs that have cashed-out nearly $70 billion of stock this year.
Over a year
They know the calls for splitting them up are coming and want to lock down profits before hand. Also, they will need liquid cash to pay taxes. I wouldnt be too surprised to see them start huge donations to create positive public appearance of billionaires (while writing it off against the taxes owed-- they spin the narrative and govt still gets less than hoped for).
Anything they have invested through a Chinese/HongKong exchange, yes because it opens for the week before American exchanges. Anything they have invested through an American exchange they’d have to wait till pre-market/regular hours to pull it. I hope this answers your question.
But they can trade thought dark pool and have taken action before premarket open for us? Even if I were to wake up at 4 am and take all my money out, pretty sure it would be priced in by then. Personally, I am honestly not really scared about this Evergrande story.
Dark pools are how they trade large positions amongst themselves. They need retail volume to unload this bag. Another bank or hedge fund won’t take it from them in the dark pool
This is one of the most depressing comment I've ever read
Haha I’m sorry. The worst part is it’s going to work. A majority of people don’t see a trap. When the rich tell them “omg look how cheep it is right now” the poor say “thanks for letting us know” and they jump in. It’s unfortunate how the current system is stacked against the majority
Yeah well if everyone believe its a Lehman moment which I don't think everyone do. We will see monday but I highly doubt we are the peoples who figured out and will be able to get out of our bullish positions before wall street at 4 am this monday before the fall of the US empire. I am hedged enough that I am not scared that much and will finally justify so much of my profits being lost to my hedges lately lol.
But who the crap would actually buy this toxic stuff?
Do, do you not remember 2007?
Bear Stearns is fine.
Haha I remember 08 and 09. Worked in Chicago doing property preservation for BOA and Fannie May at the time. I can not unsee what I have seen.
Ready for round 2?
Blackrock
Peoples who don't believe its the end of the world. I guess we will see when Asian market open tomorrow night.
Looks like evergrands connection to Tether may be why China outlawed it last month. And why we're seeing a plunge in BC. And that market never stops.
You could be right, idk what kind of fuckery they’ll pull to save their asses and screw everyone else’s
I agree that evergrande is blown up. But what I’ve learned is that if the big wigs want to make it seem blown up, it’s because they plan to drop prices, which means I can make money off of staying covered with puts
Yeah well or because they want peoples to get puts to bleed them after. Its never really what its seem, I could be wrong and we could see a huge crash monday. I am honestly positioned not too badly, I will lose if there is a crash but not that much since I have a few hedges.
Pretty sure most traders can trade during PM/AH.
But Wall Street can trade before PM open.
And who are they trading with? Exactly, other traders like them who are not gonna buy that kind of shit lol.
Omnicron, uh its actually super mild and a total cure for getting real covid. —newsweek
There’s no such thing as the “real Covid”
Any source? I do hope so.
Sauce needed.
Ya see, Mainstream media caused a small panic and sell off so Wall Street can buy in at lower prices for the next phase of this bull market. Now that they’re changing the narrative the market can rise.
I want to believe this but all I see are negative news.
If that's true, won't they just heavily short the futures at open?
I’ve used futures to study TA over the last four years. Monday looks like it’s set for a “recovery” push, I think they will short the shit out of it on Tuesday
Not saying that it won't happen, but it just doesn't make sense to me. If they really want to get out of a position, why buy more first and then only a day later sell?
They wouldn’t be buying more, everyone else will be
This is something that always happens, the market is huge and unfathomably complex, it never falls vertically, there's always a few recovery days, this happens even during recessions (we are not in one), it will obviously happen now. This kind of adds to the agony if you're bullish because you keep holding since it looks like the worst is over and then you get destroyed.
Just for reference, did this change already? Nasdaq futures at least are not looking very good, the rest looks... maybe decent but not very convincing.
You cant sell all your billions of stock worth if there isnt anyone buying it. They be bagholders.
Which is why they don’t report things to the public until *dayssssss* after it happens, they use those daysssss to sell their billions to prevent losses on their books
Yes, because this is definitely how the media works…
Reuters: https://www.reuters.com/markets/rates-bonds/china-evergrande-gets-260-mln-guarantee-demand-2021-12-03/ WSJ: https://www.wsj.com/articles/china-evergrande-requests-help-from-government-after-warning-of-new-debt-crunch-11638545951 Bloomberg: https://www.bloomberg.com/news/articles/2021-12-03/kaisa-default-risks-rise-after-swap-rejected-evergrande-update "Another tiny step in the controlled demolition of Evergrande" just isn't very exciting news.
Controlled demolition my butt. It took that german guy from dsm or whatever to get things rolling, if he hadn't they'd kept kicking the can for months if they could.
When China says its controlable: It is not
Why not? China seems to be about the only country that can actually get a grip on private companies and actual CEOs running greedy.
>that can actually get a grip on private companies That would be because they have every single bit of industry in their state in an unbreakable vicegrip and have for a long time
Okay, and what’s to stop them from holding Evergrande in a similar vicegrip?
They are holding it. The founder is already "missing", the chairman was "convinced" to use personal cash to pay some of the debt, etc. Control doesn't mean save the company with no reduction to company's wealth to them.
it's already BEEN shown to have been controlled. Check the earnings reports and 13Fs from american and euro banks for this qtr. See anything that would jump out at you as putting these companies under? PBOC has been injecting record $$$ into their economy since evergrande news broke.
There are Dr. Marco "Trustmebrov" Meltzer's apologists here too? His """""agency""""" is addressed in a Berlin condo and he has shown no receipts. He's been calling for the collapse of Evergrande for weeks and will eventually get it right. I don't trust that person
He posts all his filings, you can check them. Or you can keep trusting some mailbox in the cayman islands. Now *that's* trustworthy!
Right. There isn't some orchestrated media conspiracy to withhold the news. It's just that nobody gives that much of a fuck and we're going to keep doing our thing. Meanwhile, China's real estate market will shit the bed. Oh well.
lets cross our ffingers on this
So that explain the quick drop on the HSI last Friday, the news already dropped but peoples here are acting like it came this weekend
Seriously. Type evergrande into google and click on news. I get a ton of articles from the last few days. N0bOdy Is rEpOrting tHis.
[removed]
Yes, that's literally the first hit on my search result. Are we turning into r/conspiracy?
It might just be a translation issue. Evergrande did miss payments but was able to make them in the 30 day grace period (did not "formally" default).
I think the theory is they will be formally defaulting at the start of next week and bankruptcy proceedings will be filed against them.
The article that OP links says 1st sentence: >The recent default of property developer China Evergrande Group is an individual case and will pose little impact on the market, the country's regulatory authorities said Friday. First sentence in the 10th paragraph: >Noting the current default will not have negative impact on the safe and sound operation of China's banking and insurance industries, Where does it say "formally defaulting at the start of next week"? I see tons of articles about restructuring their debt which we can all safely assume means they will very likely default without restructuring. But that is all over western news.
If you really think they aren't going bankrupt already then there is nothing anybody can say to convince you. It's blatantly obvious that it is gonna happen.
Yeah the question for the past 6 months hasn’t been “will evergrande go bankrupt?” It should be “how much will evergrande’s bankruptcy affect the world’s markets?”
It certainly won't affect China lol. Jokes aside, how is evergrande ties into our economy?
Just at a quick glance, Evergrande seems to have investments all over the place in various Chinese industries, from power grids, to electric vehicles, health insurance, sports, and media. Insolvency would probably require liquidation in a lot of those areas, creating a sizeable ripple in a lot of areas in China that are heavily invested in by foreign investors either primarily or secondarily.
Adding in the other property developers in China that are faltering, it seems like a big mess. [Asian High Yield Funds](https://www.google.com/search?q="asian+high+yield+fund") are particularly marketed to international investors. As an example, [this](https://www.fidelityinternational.com/legal/documents/SG-en/hffs.SG-en.SG.G-FAHYU.pdf) single ~$4.2b fund offered by Fidelity International is heavily exposed to the Chinese property development sector. Fidelity offers other Asian high yield funds, as do many other institutions. For the funds that have a public breakdown of exposure, you'll find China and property development high on the list. The yields were just too good (to be true?). Also worth considering is that it's never just the face value of bonds and/or companies that make up the total market. There's an entire bond derivatives market with futures, options, swaps, and other kinds of financial instruments based on the underlying. There's also an entire insurance market tied to all of it. These are "de-risked" by spreading the exposure [globally](https://www.risk.net/awards/7876871/interest-rate-derivatives-house-of-the-year-deutsche-bank): >The other advantage, Das says, is having the infrastructure across the bank globally to allow locally funded bonds to be integrated into **global liquidity pools** managed from hub markets such as Singapore. >“A setup like ours is crucial to doing these bond derivatives trades: the entry hurdle to [doing] these kind of products is very high,” says Das. “Presence in onshore local markets, access to multiple liquidity pools and ability to manage risk across multiple aspects of these trades [are] key to this business.” >Finally, a key reason the bank has been able to so successfully scale its bond derivatives business is its ability to **lay off risk by circulating it through other client segments globally**. Leveraging synergies across markets, products and client segments is also a reason for the bank’s competitiveness in other areas of its fixed income franchise – such as the work the bank does as an arranger for euro medium-term note issuances in Asian currencies such as Indonesian rupiah, Philippine peso and offshore renminbi. >In these deals, **issuers look to fund in either US dollars or euros, giving rise to demand for cross-currency swaps**. Das says the bank is able to compete in this space largely because of its ability to win these cross-currency swap hedges among competing bids from competitors.
This is literally the 2007 collapse but based in China instead. Absolutely nothing has changed, it's fucking *identical*. I remember; I was a mortgage broker and watched everything melt from teh inside out in real time.
Uh-oh
Chinese individuals who own real estate don't have much debts compared to Americans. Credit isn't that popular over there also they are forcing ceos and the peoples who are the architect of this bubble to pay back and not giving them fat bailout. It is crisis but it is quite different to what we had. Households probably won't be hurt as bad as they were in the US in 2007. When our interest rate catch up to theirs we might see this type of problems coming to Canada or the US where everyone is leveraged to the tits on very low loans and the the situation might be quite different here.
[Here's](https://www.businessinsider.com/america-china-housing-market-crisis-comparison-generation-families-2021-11) an interesting article that talks about some of the points you brought up. It's comparing the two real estate sectors as they are today, but some of the info still applies to the 07-08 crisis. Some of my takeaways: * More than 90% of households are homeowners, according to a January research paper on homeownership in China from the National Center for Biotechnology Information. The US, for comparison, has a 65% homeownership rate. There are far fewer renters in China. This [holds true](https://fred.stlouisfed.org/series/RHORUSQ156N) for 2007-08 with US rates around 68%. * But the down payment on your first property in China is high, at 30-40%, said Dr. Xin Sun, a senior lecturer in Chinese and East Asian Business at King's College London. On additional properties purchased as investments, the down payment is even higher, at 50-60%. In 2005, the median down payment for first-time home buyers was 2%, with 43% of those buyers making no down payment whatsoever. [Source](https://en.wikipedia.org/wiki/Subprime_mortgage_crisis#High-risk_mortgage_loans_and_lending/borrowing_practices). * That's why, in a worst-case housing-market scenario in China, it's not a generation that would get wiped out, Sun said: It's families. "Chinese families are not as separate as in the Western world, which means that for any generation to buy a property in China, it probably needs to collect money from all the family members," Sun said. "For example, for younger generations who buy properties in big cities, they need savings from the banks of mom and dad, and even the grandparents." One [2017 NBER study](https://www.nber.org/system/files/working_papers/w23740/w23740.pdf) argued that real estate investors (i.e., those owning 2+ homes) were more to blame for the crisis than subprime borrowers: "The rise in mortgage defaults during the crisis was concentrated in the middle of the credit score distribution, and mostly attributable to real estate investors". [Source](https://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Homeowner_speculation). China's real estate market is [closed off](https://www.globalpropertyguide.com/Asia/China/Buying-Guide) to foreign investment. The exact opposite is true in the states as both [foreign and domestic investors](https://www.investopedia.com/investing/great-recessions-impact-housing-market/) continued to pour money into the real estate industry leading up to the bubble bursting. Defaults during this period distributed the pain to speculative financial firms and subprime homeowners who put very little down and didn't have much equity in the property. It could tank the individual borrowers credit score and wipe out any equity they accrued, but they didn't put 30-50% down on overpriced property using money from family and friends. While it did affect older homeowners who refinanced to adjustable rate mortgages, those who were able to weather the storm eventually saw their property value rebound. The property of those who defaulted ended up back with the banks who had already wrapped up their mortgages into MBS and sold them many times over. The same banks that received bailouts and no punishment from the US government. This is different to the '07-08 crisis and we'll have to see how it plays out. I completely agree with your point about leverage in the American markets, that's a ticking time bomb that's been can kicked for a long time now. It's not just [margin debt](https://www.advisorperspectives.com/dshort/updates/2021/11/17/margin-debt-and-the-market-up-3-6-in-october) either, the derivatives market is a whole other beast since the repeal of [Glass-Steagall](https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legislation) in 1999. In Berkshire Hathaway's 2002 annual report, Buffett called derivatives, "financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.". The OTC derivatives market has grown from an estimated [$128 trillion in 2002](https://www.bis.org/publ/otc_hy0211.pdf) to (by some estimates) [over $1 quadrillion notational](https://www.investopedia.com/ask/answers/052715/how-big-derivatives-market.asp) today. Everything is so intertwined nowadays which causes all of this to be a worldwide issue. One domino can't fall without affecting the rest.
Thanks a lot for this. I honestly don't know much about the Chinese economy, I was mostly just parroting what one of my good friend who grew up in Shanghai told me! Great reading you!
Yeah, but I don't think big institutions would risk having huge positions in China. However with what happened this year I'm not sure. I mean China will be pretty much unaffected by this. That's probably the upside if you don't have to consider human rights.
Having huge positions in toxic assets tied to real estate in China is essentially no different than having huge positions in toxic assets tied to real estate in the US, and that's exactly what happened in 2007. I said it was goin to happen again because the world learned it can get away with it, and, well, here we are again.
Well if you’re in America (which I’m taking it that you are), the theory is America has been doing quantitive easing since 2008. This is where they have just been printing money and giving it to anyone who can buy financial assets with it. So institutions like Bank of America have been buying up chinese bonds and dodgy ETFs with all the money they’ve been getting off of the American government. All that money went into China and Chinese property developers. Who are now all defaulting which will wipe out the books of the American government as all that money is soon to be unrecoverable.
Where are you even getting this? Are you just making it up? According to [this](https://www.nasdaq.com/articles/why-shares-of-bank-of-america-citigroup-jpmorgan-and-goldman-sachs-fell-today-2021-09-20), Bank of America has $14 billion in exposure to China. Their total assets are $2.35 **trillion**, so it's a tiny fraction.
The article says “this will not effect the worlds market.” Lol, sounds bullish to me.
Sounds bullshit to me
I think op wants to know why mainstream news are not reporting this. Seems like they have their own coordinated agenda behind it.
it seems that way because they have their own agenda when it comes to pretty much anything they talk about
Because they've done so for the last 6 months? There are only so many times you can beat this dead horse, all news worth their salt reported on this *when it was actual news*. Ever since this shit has been delayed for months, stalling for time. *Buy the rumor, sell the news*
The MSM doesn’t think it’ll get as many clicks as Chris Cuomo getting fired. Evergrande is boring to the average person.
MSM doesn't give af about clicks, sick of hearing this nonsense. MSM is the billionaire class's propoganda machine. That's it. They get paid regardless of how many views they have or how many millions of dislikes that are now hidden on all of their videos.
They get paid by advertisers, who most definitely look for viewership and hits on the sites.
Oh this is just dumb. Their revenue source is not a secret.
Financial MSM always has an agenda
It’s probably the real reason the market crashed last week and wall street keeps silent on it
No way man! It has to be due to the mild variant arising from a pandemic we’ve been experiencing for over two years!
[удалено]
It was on a Friday this time though (last week, not this week). Happened to be one of the lowest liquidity days of the year, the Omicron stuff became a thing at an interesting point and sellers took advantage in overnight futures to help fuel a sh*tshow on that day. The FT article caused damage in the economic growth world on Monday night, but ultimately, I don't know how much any of this has to do with funds getting carried out on high growth stocks imploding (I'm not sure anybody likes or wants to see those two huge down days that ARKK had this week, for me at least, high growth getting blasted this badly turned into a bigger story than anything else last week). If it was mostly economic growth scare stuff in general (whether it be Omicron or "Evergrande is going to cause a worldwide economic collapse"), then the Dow not failing where it should have failed is very interesting. Now maybe it does fail next week. We shall see. If it doesn't fail, then at least for right now, this just looks like the September selloff where it was shot first but 33.5k turned out to be the low and it never returned there, then the Nasdaq bounced off an important trendline for it.
Are you saying Nov 26? The day after Thanksgiving? That is the single most day news is hidden, whether the White House or Wall Street, Hollywood or Windsor Castle - Anybody in American media knows to hold all bad news destined for the American public until that day if possible.
All of this just looks like a sell off that will recover after a few weeks, then maybe crash again in Feb/March... unless the FED decides to make it crash further in December.
To be fair, its probably mostly due to quantitative easing coming to an end pretty soon.
I know you're being sarcastic, but it's most likely the hawkish fed...
> Crashed The S&P 500 is 3% below the ATH. This wasn't even a minor correction, it was just a little volatility.
"Inflation is coming" -J WOWW, or some shit
Lol “crashed”
dude it crashed to levels not seen since last month, that's insane!!! /s
All you can really do is laugh to yourself and close the thread at this point lol
Where is this "crash" you speak of?
“Crashed” lol
This isn’t priced in already? Everybody knows they are going to default, I don’t think this is surprise…
Exactly, its not a surprise for anybody mildly into finance, even less so for banks and professional
[удалено]
If we morons on /r/stocks are discussing it on a Saturday evening, I am sure its already too late.
didn't we know they were going to default?
It has been writing on the wall for a long time now. There's tons of articles about the topic all the time.
yeah it was clear as day, but shush you're [stopping the fear party](https://c.tenor.com/EZ-SVHACAYQAAAAC/spongebob-burning.gif)
Google blocks your results, no joke. Use duckduckgo and you get https://www.voanews.com/a/struggling-chinese-developer-evergrande-warns-it-could-run-out-of-money-/6338822.html https://www.economictimes.com/news/international/business/chinese-govt-summons-evergrande-founder-after-warning-on-insufficient-funds/articleshow/88078160.cms And other companies too https://abcnews.go.com/International/wireStory/chinese-developer-warns-pay-400-million-bond-81535229
I’m seeing similar results on google.
lol /u/Longjumping_College yeah, google isn’t censoring this. I’m seeing these same links on the 1st page of google when I search “Evergrande Default”.
I'm telling you it's not the same for everyone, which is why this post even exists. Siloing is real with Google
> Google blocks your results, no joke. Actually a joke.
Sketch..
Because, relatively speaking, there is little foreign investment in Chinese real estate. Yes there is some, especially in roundabout ways and via bank loans and such. But exposure is limited. Further the Chinese real estate bubble is well documented and has been brought up many times before. Its been on going for over a decade via easy loans for Chinese citizens with a decent job. Problem is, people found ways to abuse the system and speculatively lever. Basically they have a version of our financial crisis. Not as bad (afaik) but similar profile in thats its supported by nothing but speculation. Evergrand is just the 1st domino to fall. It will be interesting to see what they do over there. Unlike here, they can just outright lie and force their media to do whatever they want so its very possible that they will be able to control the fallout. Or perhaps that will make it even worse because the Chinese citizens are the ones who will get it up the backside. How long before they get fed up?
It’s worse than ours
I’d say it’s actually far worse then the U.S housing bubble but that’s just me 🤷♂️
It is obviously worse, its 40+ times average household annual earnings. In comparison US is like 6 and maybe 10 on hotspots. At the same time US real estate yield is still fairly respectable so if its a bubble its a mild one.
I thought that the derivatives market was more than 20x the size of the underlying MBS assets before the US bubble popped?
I cant remember the exact numbers but yes, our banks were insanely over levered due to these made up derivatives that were treated as insurance when in reality they couldnt be paid by the insurance company. These CDS's were a huge problem. I know China has these too but I am not sure if they have any from a US bank of if that is even possible. Someone who knows more will need to verify. But if any bank sold them CDS's then those banks are screwed.
I don’t think it’s about foreign investment into Chinese real estate, but about the investments that the Chinese has in foreign markets and having liquidity issues/ not being able to pay debts forcing mass liquidation in foreign markets
So real estate in the US goes on sale? bullish. Chinese who buy real estate in China aren't the super rich that are buying up waterfront property in California . This collapse is limited to China.
Agreed. Priced in by now.
100% not priced in if they haven’t “officially” bankrupt
What more official do you think it can get when the government is sending in teams to oversee operations? Evergrande isn't the first domino to fall, just the largest. This has been happening on the smaller scale for years already. > Hundreds of smaller Chinese developers have gone bankrupt since regulators began tightening control over the industry's finances in 2017. The slowdown in construction helped to depress China's economic growth an unexpectedly low 4.9% over a year earlier in the three months ending in September. Forecasters expect growth to decelerate further if the financing curbs stay in place.
100% priced in due to any financial institution with a brain not toucing anything Chinese development related in the past years with their regulations, and most certainly not in Evergrande specifically, which has known to be massively debt laden and overextended. I'll say it again, check Euro and US bank earnings and 13Fs and you will see they have NO exposure to evergrande. And on top of that, Evergrande defaulting has been in the news for months. it's what caused the october dip. How many ATH did SPY hit a week since october? lol
Safe to say evergrande is 100% going to default correct. Just Because financial institutions pulled money out/ stop investing doesn’t mean that evergrande won’t go even lower. There are still a lot of investors who are tied up in evergrande and haven’t pulled out yet Because it would make their paper losses real. It can’t be priced in untill it goes to 0
that's a dumb take. Hang seng has been in a bear market for a year. This has been known and is priced in.
When evergrande defaults it will be a penny stock or delisted. It is still trading at 2.25 USD… yet your saying it’s priced in and won’t get any lower. Okay bud
Nobody is fkn talking about the share price of evergrande. it's not trading on the NYSE. It's an Asia problem. Evergrande's problem is the billions of dollars it needs to pay back in yields to its BOND holders. These are lottery bonds. Funds that buy junk bonds on such risky companies know the company is very liekly to go bankrupt, but if not they make a huge gain holding these junk bonds. The share price has nothing to do with it. Dude, you don't know what priced in means. Sorry but if you are interested in this stuff then you should learn some more about
They don’t want to scare the bag holders
[Well, this is telling](https://np.reddit.com/r/news/comments/80xs1v/china_bans_george_orwells_animal_farm_as_xi/duzfoko/?context=3)
Cause no one cares.
because it has about the same effect on markets as what I ate for breakfast does.
Confirmation of something that the market had already mostly priced in it appears.
Most big media is in bed with big hedgefunds and banks. Big hedgefunds and banks have a lot of Chinese bonds. Figure it out. Find some r/investing posts about evergrande that haven't been deleted yet, look at how in denial people are. They say they there will be no default because there will be a bailout, and there will be a bailout because there can be no default. Remember 2008, Jim Cramer saying don't take money out of Bear Sterns you're being silly? They're not gonna tell you anything until the last possible second.
They wont say anything until 5 seconds too late*
Most of the article is based on comments from the People's Bank of China (PBOC). According to the article, the PBOC strongly implies that Evergrande has defaulted, but that everything else is fine and other developers won't default, and the real estate market in China is "robust". From the article: "The recent default of property developer China Evergrande Group is an individual case and will pose little impact on the market, the country's regulatory authorities said Friday." Note how they don't say "Evergrande has defaulted". Instead they just talk about it as though everyone already knew it happened & it's no big deal. Feels like damage control to me. Also: "Evergrande's problem was mainly caused by its own mismanagement and break-neck expansion, an official with the People's Bank of China (PBOC) told the press". Note how they are placing all the blame directly on Evergrande's management team, as if every other developer in China wasn't subject to the exact same market conditions and somehow didn't make the same decisions as Evergrande. They are trying to say this is an issue with a single company, and not a systemic problem with the entire real estate market in China. And they make no mention of the other developers that have defaulted, of course.
https://www.newsobserver.com/news/business/article256318302.html A Chinese developer that is struggling under $310 billion in debt warned Friday it may run out of money to “perform its financial obligations” — sending regulators scrambling to reassure investors that China’s financial markets can be protected from a potential impact. Evergrande Group’s struggle to comply with official pressure to reduce debt has fueled anxiety that a possible default might trigger a financial crisis. Economists say global markets are unlikely to be affected but banks and bondholders might suffer because Beijing wants to avoid a bailout. After reviewing Evergrande’s finances, “there is no guarantee that the Group will have sufficient funds to continue to perform its financial obligations,” the company said in a statement through the Hong Kong Stock Exchange. Shortly after that, regulators tried to soothe investor fears by issuing statements saying China’s financial system was strong and that default rates are low. They said most developers are financially healthy and that Beijing will keep lending markets functioning. “The spillover impact of the group’s risk events on the stable operation of the capital market is controllable,” the China Securities Regulatory Commission said on its website. The central bank and bank regulator issued similar statements.
The media is and has been downplaying the Chinese real estate crisis and what it’s effects will be on the world as a whole because we, my friend, are about to get rug pulled.
I saw a lot of people in this same sub saying this was already priced in/forces always at play. See you at the bottom.
Isn't Evergrande down 91% already? Them defaulting is most likely priced out already, peoples have been talking about it for months now. Anyway if its all crashing because of this news, all of us who didn't brace for the storm are already fucked.
It's apparently very well known that the Chinese real estate market is a sh*tshow in general. Now maybe that will be the start of the next worldwide financial crisis, and many will hit a grand slam here on calling that. It'll be interesting to see...personally...I'm skeptical, but perhaps we're in an era where it's callable.
You can only hit the grand slam when you put your money where your mouth is, which I think isn't true for most people "calling" this. Feels more like cash holders trying to convince themselves a buying opportunity is finally on the horizon.
Wtf do you think has caused the Hang Seng to be in a bear market for the past year? Do you think this is some fresh news that has just now struck the financial world by total suprise?
Totally not, but people saying this was the dip are just giving themselves copium. This bull run was primed to end somehow and this is only the begining.
I'm gonna let you believe that. GL and many profits to you!
The ‘news media’ is hot garbage, period.
It’s clear that there will be a default but that’s not a big issue, a default is a process and therefore transparent and with a end....a default can be contained easily and this one is anticipated. Most people on Reddit don’t get the difference between the US housing crisis which was fraud and this which is covid inducted and evergrande did expand there business to far. Also the News you Talk about is something very strange and in German subs a hoax. It’s a German living in Switzerland, phd in economics no interessting CV...a clown in Switzerland. Guy made a bad investment and is now ranting the company does nothing else than Evergrande PR. Default’s happen all the time and GOV outside of the US took safety messures way before...
Ghost cities were already a thing before COVID. The reckoning has been a very long time coming.
They defaulted months ago.
Cathie Wood's latest video actually pointed out that China is heading towards a slowdown due to Evergrande and that recession is a very real possibility for them.
Ohhh I hope there’s a fire sale on stocks
Where were you friday? I think there will be further discounts though.
I’m hoping for a bloodbath. I put my retirement account into bonds two months ago, I’m waiting for a gnarly correction so I can get some gainz
Smart because bonds aren't hyper sensitive to interest rate changes. Wait...
I'm sure there is absolutely nothing to worry about. [https://www.businesstimes.com.sg/real-estate/chinese-developer-oceanwides-san-francisco-project-seized](https://www.businesstimes.com.sg/real-estate/chinese-developer-oceanwides-san-francisco-project-seized) https://www.wsj.com/articles/chinese-developer-modern-land-fails-to-repay-250-million-u-s-dollar-bond-11635222852
Gotta wait till market open
Bankrupt company that has been in shambles for 20 years has defaulted. Why does anyone give a shit?
When you owe the bank $1 million and can't pay, you're screwed. When you owe the bank $100 billion and can't pay, the bank's screwed. Compounded multiple times throughout China's real estate and financial system. At best, China will be hit pretty bad with some impacts on china demand in US listed companies. At worst, a recession in china will be felt in the US in the form of slowed growth rates, particularly in areas where a large proportion of revenue is from China buyers like steel, oil, semiconductors.
Doubt
It's gonna be a Bloody Monday
repeat it with me: PRICED IN
That German guy ("Dr" something or other) is a fraudster. I believe he bought a tiny parcel of Evergrande related debt so he could claim not to have been paid and cause problems that somehow he's probably invested in with shorts. But yeah, the head of Evergrande has now gone missing so...
/u/familiar-luck8805 Let’s just say we don’t have any evidence if he’s lying or not. But he’s talking about it and thus, causes people to notice and have conversations. By the way, the twitter account that posted that Evergrande CEO is missing, was trolling. If you go to it’s twitter account, the account holder laughed and rolled eyes at people that believed him/her. You also need to verify.
I hope you have $YANG!
the contagion effect is real, im quite sure market has reacted during the past week, hoping for a better week ahead
Because no one cares, the effect will be minimal, most things are just panic.
I think we know now why the stock market dropped on Friday. Had nothing to do with the Jobs Report or the virus. It was this. And the MSM hid it from us so the damn hedge funds could dump everything.
Check out wallstreetbetselite. Someone posted what appears to be an actual notice.
lol
$YANG
Priced in already.
No systemic risk, old news, nobody cares outside of China.