Evergrande...

[sxturbo]

£221 billion of debt, currently 5 missed missed bond payments..

Are we really due another financial crash like the express says?

How can a company be allowed to mount that sort of debt?

https://www.express.co.uk/finance/c...4PkzRmj3RkRQHMVw6PEXVXY8V4PofYisGVgsedZ0wkw==

 

[fillyboy]

I nearly started this thread a couple of weeks back, eye watering numbers, 30% of China GDP, 'they' were expecting bankruptcy a week ago, in fact a German company that bought some bonds have petitioned for bankruptcy.
Michael Burry, the broker featured in the film The Big Short who called the last collapse is also predicting a mega crash. Not just because of Evergrande, a perfect storm is gathering, debt, overvalued markets, everything.

 

[Notch7]

there are around 65 million empty properties in China

dozens of ghost towns

Its been going on for years.......its like a ponzi scheme on a scale that is unimaginable

I used to watch this guy on youtube

 

[Notch7]

Are we really due another financial crash like the express says?

it could be worse -imagine a global viral pandemic

 

[sxturbo]

it could be worse -imagine a global viral pandemic

Well I'm more concerned what the impact of this will have ontop of the impact of the virus we are still dealing with.

With consequences supposedly as great as it stated I'm surprised the Chinese government havnt stepped in.

 

[fillyboy]

'Big Short' investor Michael Burry warns the 'mother of all crashes' is coming - and predicts crypto and meme stocks will plummet | Currency News | Financial and Business News | Markets Insider (businessinsider.com)

 

[fillyboy]

there are around 65 million empty properties in China

And six million bicycles in Beijing.

 

[JohnD]

Michael Burry, the broker featured in the film The Big Short who called the last collapse is also predicting a mega crash.

he does that all the time.

occasionally he's right

I predict it will snow on Christmas day.

this year

or maybe next

or the year after.

sometime.

I also predict that gold will go up.

And down

 

[JohnD]

He predicted twelve of the last three crashes.

 

[Justin Passing]

Bloomberg is taking it seriously.
China's statement is “housing is for living, not for speculation.” Bale-out unlikely.
Those dollar bonds funding the empty buildings have been apparently worth nothing for a while now. Chinese inventors have long been buying abroad which contributes to the 'stock valuations at 30x sales' silly bubble we have.
So will their investors who were hoping China gov would bale them out now pile more into foreign stock as China's looking uncertain, or will they have to pull their money back? If they pulled it, where could they put it?

 

[sxturbo]

The Chinese government have the final say whether a house can be sold, and if they don't like the value the house has sold for they won't allow it to sell,, this keeps the house prices up and is currently the reason the market hasn't yet collapsed

 

[Justin Passing]

The Chinese government have the final say whether a house can be sold, and if they don't like the value the house has sold for they won't allow it to sell,, this keeps the house prices up and is currently the reason the market hasn't yet collapsed

No, that appears to be out of date.
Forbes:
"It wasn’t until the mid-90s that a series of reforms allowed urban residents to own and sell real estate. People were then given the option to purchase their previously government-owned homes at extremely favorable rates, and most of them made the transition to being property owners. Now with a population provisioned with houses that they could sell at their discretion and the ability to buy homes of their choice, China’s real estate market was set to boom. By 2010, a little over a decade later, it would be the largest such market in the world."

The tradition of saving in China is strong. 82% of the properties aren't mortgaged. They're privately owned. Looks like negative equity on steroids.

 

[sxturbo]

No, that appears to be out of date.
Forbes:
"It wasn’t until the mid-90s that a series of reforms allowed urban residents to own and sell real estate. People were then given the option to purchase their previously government-owned homes at extremely favorable rates, and most of them made the transition to being property owners. Now with a population provisioned with houses that they could sell at their discretion and the ability to buy homes of their choice, China’s real estate market was set to boom. By 2010, a little over a decade later, it would be the largest such market in the world."

The tradition of saving in China is strong. 82% of the properties aren't mortgaged. They're privately owned. Looks like negative equity on steroids.

According to the below from an article published in October, Chinese government can stop a sale..

In 2017, Bloomberg described Beijing's nightmare scenario as one in which people rush to sell off their second properties if cracks in the market appear, thereby sending prices on a downward spiral. When I asked Gan whether this was the scenario now unfolding in China, he said it wasn't — but not because there aren't cracks in the market.

Instead, the government is making it so difficult to complete a sale that it's dissuading homeowners from selling, Gan said.

"China can stop a transaction. The government can change the number of years you have to own a home. Or if prices are too low, the government won't give you a certificate of sale," Gan said. "That is what's happening now."

"You won't see the price drop substantially, but you will see the transaction volume drop massively," he added. "They'll stop the sale. By doing that, they can prevent the look of a massive price drop. They can prevent the crash."


Source: https://www.businessinsider.com/chi...ande-housing-market-problem-2021-10?r=US&IR=T

 

[Vinty]

China was doing well until it started to import western financial practices.
Financial collapse is inevitable.
They should stick to copycatting other countries inventions and technology.

 

[Vinty]

No, that appears to be out of date.
Forbes:
"It wasn’t until the mid-90s that a series of reforms allowed urban residents to own and sell real estate. People were then given the option to purchase their previously government-owned homes at extremely favorable rates, and most of them made the transition to being property owners. Now with a population provisioned with houses that they could sell at their discretion and the ability to buy homes of their choice, China’s real estate market was set to boom. By 2010, a little over a decade later, it would be the largest such market in the world."

The tradition of saving in China is strong. 82% of the properties aren't mortgaged. They're privately owned. Looks like negative equity on steroids.

I read that their problems started 20 years ago when they borrowed a tenner from Wonga. Com.