https://news.yahoo.com/china-property-market-runs-steam-143429278.html

[RandomGuy]

Looks like they finally built too much. I think China is about to learn a very painful lesson in late-stage capitalism, i.e. real estate bubbles.

---------------------------------------
A line of 60 uniformed security guards stretched across the entrance to ailing Chinese property giant Evergrande’s gleaming Shenzhen tower on Monday as dozens of angry investors demanded answers – and their money – from the company.

The protesters, who claimed they had been “swindled”, represent just a fraction of an estimated 1.5m people who pumped cash into Evergrande to buy apartments which have yet to be built – and may never be.

Evergrande, founded in 1996 by the well-connected billionaire Xu Jiayin, rode an urban property boom now running out of steam and is teetering under a $300bn debt burden. The firm was forced to deny an imminent bankruptcy but ratings agencies predict a default, while domestic banks and foreign creditors are on the hook, prompting fears of a "Lehman moment" for the world’s second-biggest economy.

“Right now, there are an awful lot of people in China paying for a property from a company that looks like it's going down the plughole,” says Mark Williams, chief Asia economist at Capital Economics.

While Evergrande’s crisis has grabbed the headlines, the ingredients of a Chinese property bust have been long in the making. As far back as 2016, Chinese president Xi Jinping warned of a potential crackdown with the phrase that “property is for living in, not for speculation”.

That message belies the wall-to-wall billboards, television and even elevator advertising luring buyers to put their cash into property, a portrayed sure option in an under-developed financial market offering relatively few alternatives for investment. Amid higher savings rates and a population that has lived through an economic boom, cash-buying real estate years in advance is common and owning properties – the more the better – is a status symbol.

Iris Pang, ING’s chief economist for China, says: “It is a culture deep in the mind of the Chinese, if not all Asians. Look at Hong Kong, look at Macau. Singapore is a little bit different because they have a very generous public housing policy. But across Asia home ownership is a kind of self recognition, a safety net for people's life or retirement.”

A Beijing-fuelled property boom
Strong demand has left average Chinese house prices at an eye-watering 18 times average incomes in a private property market which did not even exist until the eve of the millennium. But this has also been fuelled by Beijing regularly turning to property investment, a sector accounting directly for around 15pc of China’s economy, as a short-term fillip to growth during periods of economic turbulence. Companies have leveraged up with the blessing of the government.

Despite vacancy rates of over 20pc , the tendency to overbuild in a country of party officials eager to show rapid regional growth – and gain their next promotion – is also behind the phenomenon of “ghost cities”: urban areas filled with half-finished concrete shells.


(rest of story at: https://news.yahoo.com/china-property-market-runs-steam-143429278.html )

[RandomGuy]

.. and about the thread title: Oops.

[hater]

https://www.spurstalk.com/forums/showthread.php?t=182051&highlight=China

Created June 2011


:lmao :lol :lol :lmao

[Isitjustme?]

Looks like they finally built too much. I think China is about to learn a very painful lesson in late-stage capitalism, i.e. real estate bubbles.

---------------------------------------
A line of 60 uniformed security guards stretched across the entrance to ailing Chinese property giant Evergrande’s gleaming Shenzhen tower on Monday as dozens of angry investors demanded answers – and their money – from the company.

The protesters, who claimed they had been “swindled”, represent just a fraction of an estimated 1.5m people who pumped cash into Evergrande to buy apartments which have yet to be built – and may never be.

Evergrande, founded in 1996 by the well-connected billionaire Xu Jiayin, rode an urban property boom now running out of steam and is teetering under a $300bn debt burden. The firm was forced to deny an imminent bankruptcy but ratings agencies predict a default, while domestic banks and foreign creditors are on the hook, prompting fears of a "Lehman moment" for the world’s second-biggest economy.

“Right now, there are an awful lot of people in China paying for a property from a company that looks like it's going down the plughole,” says Mark Williams, chief Asia economist at Capital Economics.

While Evergrande’s crisis has grabbed the headlines, the ingredients of a Chinese property bust have been long in the making. As far back as 2016, Chinese president Xi Jinping warned of a potential crackdown with the phrase that “property is for living in, not for speculation”.

That message belies the wall-to-wall billboards, television and even elevator advertising luring buyers to put their cash into property, a portrayed sure option in an under-developed financial market offering relatively few alternatives for investment. Amid higher savings rates and a population that has lived through an economic boom, cash-buying real estate years in advance is common and owning properties – the more the better – is a status symbol.

Iris Pang, ING’s chief economist for China, says: “It is a culture deep in the mind of the Chinese, if not all Asians. Look at Hong Kong, look at Macau. Singapore is a little bit different because they have a very generous public housing policy. But across Asia home ownership is a kind of self recognition, a safety net for people's life or retirement.”

A Beijing-fuelled property boom
Strong demand has left average Chinese house prices at an eye-watering 18 times average incomes in a private property market which did not even exist until the eve of the millennium. But this has also been fuelled by Beijing regularly turning to property investment, a sector accounting directly for around 15pc of China’s economy, as a short-term fillip to growth during periods of economic turbulence. Companies have leveraged up with the blessing of the government.

Despite vacancy rates of over 20pc , the tendency to overbuild in a country of party officials eager to show rapid regional growth – and gain their next promotion – is also behind the phenomenon of “ghost cities”: urban areas filled with half-finished concrete shells.


(rest of story at: https://news.yahoo.com/china-property-market-runs-steam-143429278.html )

So in this argument "late stage capitalism" produces too much housing?? Hope it comes here then as we have housing shortages due to NIMBY bullshit laws all over this country

[RandomGuy]

https://www.spurstalk.com/forums/showthread.php?t=182051&highlight=China

Created June 2011


:lmao :lol :lol :lmao

Absolutely called it wrong then. I saw the reports of the empty speculative cities and made too much of it.

The part that I didn't get:

They had such a huge migration of people from the country to the cities that they could absorb all the building.

That has ended. There is almost no one left in the rural villages that can go. Those that remain are too old for the grinding work of the cities.

They are still building at the same pace they were years ago.

There is only on way that ends.

[Winehole23]

CCP might not bail them out this time. Already brought Jack Ma to heel.


https://www.afr.com/policy/foreign-affairs/inside-xi-jinping-s-war-on-the-wealthy-20210826-p58m3c

[DMC]

https://www.spurstalk.com/forums/showthread.php?t=182051&highlight=China

Created June 2011


:lmao :lol :lol :lmao

:lol damn

[daboom1]

RandomGay :lol

[Winehole23]

hater has nary room to clown on bum predictions, tbh

he’s pretty much the all-time great down here.

[Winehole23]

Also, champion own-horn tooter.

In 3, 2, 1…

[SnakeBoy]

NEW DELHI: Trading was halted in shares of Chinese realtor Sinic Holdings on Monday after its shares crashed 87 per cent in Hong Kong. This is on a day when shares of China's second biggest realtor Evergrande plunged 11 per cent on the same exchange, as investors feared defaults in the Chinese real estate sector.

Shares of Sinic holdings fell 87 per cent to hit a low of 0.50 Hong Kong cents. Sinic Holdings is an investment holding company, which along with its subsidiaries, is principal engaged in property development and property leasing, according to Reuters.

[RandomGuy]

CCP might not bail them out this time. Already brought Jack Ma to heel.


https://www.afr.com/policy/foreign-affairs/inside-xi-jinping-s-war-on-the-wealthy-20210826-p58m3c

They have signaled that some investors are going to have to take haircuts. The "Chinese government will backstop everything" assumption is going to be found to be wrong.

My gut says the scope of the rot exceeds even what a totalitarian government can do. Lots of factors add to that. Hubris, inexperience in managing capital markets, etc.

[RandomGuy]

Dow Jones tanks 614 points as doubts swirl over China's Evergrande
https://www.foxbusiness.com/markets/dow-futures-tank-china-property-market

U.S. stock markets tumbled Monday as concerns over China’s property bubble roiled global markets ahead of the Federal Reserve’s upcoming policy meeting and a debt ceiling debate in Congress.

The Dow Jones Industrial Average fell 614 points, or 1.78%, while the S&P 500 index and the Nasdaq Composite index declined 1.7% and 2.19%, respectively. The Dow was down almost 972 points at its worst levels of the day.

--------------------------------------

China pumps $14bn in cash into market amid Evergrande crisis
The move comes as the trouble facing China’s Evergrande Group fuels investor concern over the health of real estate and credit markets.
https://www.aljazeera.com/economy/2021/9/17/china-pumps-14bn-in-cash-into-market-amid-evergrande-crisis

Hard to know what to make of it. Worth digging a bit.

[koriwhat]

Fuck China! Rot to the ground and burn in hell!

[RandomGuy]

The Chinese property market
As I say, we all know there's been something of a bubble going on here. But bubbles are fun, bubbles are profitable, it's when to get out which is the important decision.

So, if the major market player - which Evergrande is to a great extent - is now revealed to be suffering from that Emperor's New Clothes Problem, what does this tell us about the market as a whole?

Well, as with the market back in 2007 in the US, a certain set of things near inevitably follow from the observation. There will be a dumping of assets to try to keep things going, lending standards will rise leading to a shortage of financing for the sector. This will lead to more dumping to gain cash flow in that all consuming spiral we saw ourselves not so long ago. Prices will drop - dumping for cash flow again, the sector as a whole is going to get hit.

But government could act on this, surely?

But, perhaps, the Chinese government will step in to deal with this? Well, perhaps, they might. They're certainly going to try to manage the situation. But there has been enough indication recently that they desire this property bubble to bust. This has been one of the things putting pressure on Evergrande itself to curtail its activities.

https://seekingalpha.com/article/4453847-the-chinese-property-market-is-one-to-be-out-of

[Trainwreck2100]

Fuck China! Rot to the ground and burn in hell!

yeah well, unfortunately for us, they make all our shit

[RandomGuy]

Chinese mothers gave birth to 12 million babies last year, down from 14.65 million in 2019, marking an 18 per cent decline year on year. China also recorded a fertility rate of just 1.3 children per woman in 2020.

https://www.scmp.com/economy/china-economy/article/3147252/china-facing-demographic-inflation-risks-japan-never-faced

China facing demographic, inflation risks ‘Japan never faced’, Beijing urged to act to avoid ‘big surprise’

China’s once-in-a-decade census released earlier this year highlighted the challenges ahead for a rapidly ageing population
Manoj Pradhan’s book, The Great Demographic Reversal: Ageing Society, Waning Inequality, and an Inflation Revival, has caught the eye of Beijing policymakers

------------------------------------------------------

Population growth sustains demand for real estate. If you build an economy on building housing, and the population is aging rapidly, with few children.

[RandomGuy]

yeah well, unfortunately for us, they make all our shit

For now.

Chinese wages have risen to the point where places like Vietnam are more competitive.

And

US manufacturers can pick up the slack as well. The gains from outsourcing are being re-thought from supply disruptions in the pandemic.

Interesting to see if/how that plays out.

[Trainwreck2100]

For now.

Chinese wages have risen to the point where places like Vietnam are more competitive.

And

US manufacturers can pick up the slack as well. The gains from outsourcing are being re-thought from supply disruptions in the pandemic.

Interesting to see if/how that plays out.

yeah but because supply chain hasnt been diversified enough yet we're still tied too close to them now should their bottom fall out.

[SnakeBoy]

For now.

Chinese wages have risen to the point where places like Vietnam are more competitive.

And

US manufacturers can pick up the slack as well. The gains from outsourcing are being re-thought from supply disruptions in the pandemic.

Interesting to see if/how that plays out.

Vietnam demographic challenges ahead
https://www.worldlifeexpectancy.com/viet-nam-population-pyramid

Mexico is the country best positioned to become our low end manufacturer

[RandomGuy]

Vietnam demographic challenges ahead
https://www.worldlifeexpectancy.com/viet-nam-population-pyramid

Mexico is the country best positioned to become our low end manufacturer

Same demographic problem, exacerbated by immigration. Net fertility is below replacement.

[RandomGuy]

Vietnam demographic challenges ahead
https://www.worldlifeexpectancy.com/viet-nam-population-pyramid

Mexico is the country best positioned to become our low end manufacturer

https://www.worldlifeexpectancy.com/mexico-population-pyramid

[RandomGuy]

Vietnam demographic challenges ahead
https://www.worldlifeexpectancy.com/viet-nam-population-pyramid

Mexico is the country best positioned to become our low end manufacturer

Cool website. Thanks. :tu

[SnakeBoy]

https://www.worldlifeexpectancy.com/mexico-population-pyramid

Right, Mexico has a pretty good demography in addition to being next door to us. We are withdrawing from the world so that puts them in a great position.

[Winehole23]

Every ten years or so since 2001, capitalism fails and governments have to bail it out.

Markets are freaking beause China might break the pattern, by not protecting investors from investment risk.


Evergrande Group, the second largest property developer in China, and the property developer with the most debt in the world, owes banks, shadow banks, other companies, investors, its suppliers, contractors, and home buyers $305 billion, according to Bloomberg.


It hasn’t been able to sell a single dollar bond since January 2020, and has no prospects of doing so as foreign investors have gotten the message.


On August 31, it said that work was suspended on a number of real-estate projects after it delayed payments to its suppliers and contractors. It warned that it may default on its debts if it can’t raise new money.


If it was difficult to raise new money before, it became impossible after that announcement – unless the government steps in, and that hasn’t happened yet.


On September 7, Moody’s and Fitch downgraded Evergrande Group and a number of its entities deeper into deep-junk, to ratings that indicate that a default is imminent with little recovery for investors in those bonds.


Moody’s said that the downgrade reflects the company’s heightened liquidity and default risks given its large amount of debt that will mature over the next 6-12 months.

Since Evergrande does not have enough cash to pay off the debt that matures over the next 12 months, it has to raise new money to pay off those old investors. If it cannot raise new money, either by issuing new bonds, or by borrowing from banks, or by selling assets that are not already leveraged to the hilt, it will default on those maturing bonds.
https://wolfstreet.com/2021/09/15/what-a-collapse-of-chinas-evergrande-would-mean/

[Adam Lambert]

Markets freaked out because those controlling the market saw a good opportunity in the news to create a buying opportunity.

[Winehole23]

Markets freaked out because those controlling the market saw a good opportunity in the news to create a buying opportunity.good point.

great instability/adversity offers great opportunity for those with ready cash.

[Winehole23]

"Bear Stearns moment"

1444876497379078149

[RandomGuy]

"Bear Stearns moment"

1444876497379078149

I've got a bad feeling about this

[Winehole23]

I've got a bad feeling about thisIt's unclear to me whether the CCP will pull their bacon out of the fire, how does it look to you?

[RandomGuy]

Every ten years or so since 2001, capitalism fails and governments have to bail it out.

Markets are freaking beause China might break the pattern, by not protecting investors from investment risk.

https://wolfstreet.com/2021/09/15/what-a-collapse-of-chinas-evergrande-would-mean/

Business Insider
Chinese property developer Fantasia just missed a $206 million repayment deadline, a sign that China's real estate woes extend beyond Evergrande

Fantasia Holdings, a Chinese property developer, failed to pay $206 million in loans on Monday.

Just two weeks ago, Fantasia's chairman said the company had no liquidity issues.

The default indicates that real estate giant Evergrande is not alone in battling a mountain of debt.

https://news.yahoo.com/chinese-property-developer-fantasia-just-025112615.html

https://i.pinimg.com/originals/b4/f2/e3/b4f2e3e5e8106d37b8e636044b3bd9dc.jpg

[RandomGuy]

It's unclear to me whether the CCP will pull their bacon out of the fire, how does it look to you?

They are going to try.

It ultimately depends on how large the bubble is that they have created.

Any bubble that builds whole speculative CITIES... implies a very large bubble. [emphasis on the plural there]

My gut says it is larger than the Chinese government can really handle, and/or that their inexperience will play a factor in picking bad solutions.

Dunno. Predicted a bubble a decade a ago, as has rightly been pointed out here, so I am less confident in calling it now.

That said: my spidey-sense is telling me it is going to get bad, but the opaqueness of their system means we can't have any degree of certainty.

[RandomGuy]

Evergrande and other Chinese property giants have sizeable off-balance sheet debt - JPMorgan

LONDON (Reuters) - Investment bank JPMorgan has estimated that troubled Chinese property giant Evergrande and many of its major rivals have billions of dollars worth of off-balance sheet debt that, once added on, ramp up their leverage ratios.

JPMorgan's China and Hong Kong property analysts said the tactic is likely to have been used to help firms look like they were conforming with new borrowing cap rules introduced last year, but Evergrande's case looks the most extreme.

"Instead of true deleveraging, we think Evergrande has shifted some of the interest-bearing debt to off-balance sheet debt," JPMorgan's analysts said. "Commercial papers, wealth management products and perpetual capital securities, etc, which are not officially counted as debt."

They estimated Evergrande's "net gearing," as debt as a ratio of a firm's equity is known, was at least 177% at the end of the first half of the year, instead of the 100% its accounts reported.

"It is possible that the real gearing could be even higher, as data on some off-balance sheet debt is not publicly available," JPMorgan added, saying the "disguised" debt as it called it added up to 55% of Evergrande's overall debt.

Other major firms whose gearing levels were likely to be higher than formally reported included R&F Properties at 139% versus the 123%, Sunac China Holdings at 138% versus 87% reported and Country Garden at 76% versus 50% reported.

(Reporting by Marc Jones, Editing by Nick Zieminski)
------------------------------------------------------------


The knock on effects are going to be larger. This is a case of falling dominos, IMO.

[Winehole23]

shrewd take

1446811200164175873

[RandomGuy]

shrewd take

1446811200164175873

Pretty much. Which is why they will never go to war with us, and why we need to press them on human rights.

[Millennial_Messiah]

Just how much would this be in rent per month/year in terms of $USD? I might be looking for a new place to live soon...


shrewd take

1446811200164175873
Yeah one of the many drawbacks of globalization is the greatly reduced possibility of nuclear warfare which is needed for a change in humanity...... like what happened when Truman plopped 2 of 'em on Japan in 1945.

[Winehole23]

Think of the implications a property bust of this magnitude will have on steel, copper, concrete, and Chinese GDP targets.

China had largely been dependent on Australia for raw commodities, that tidal wave of Chinese Debt is About to Sink Australia’s Economic Recovery (https://www.scmp.com/week-asia/economics/article/3151634/evergrande-sinic-fantasia-tidal-wave-chinese-debt-about-sink?utm_content=article&utm_medium=Social&utm_source=Twitter#Echobox=1633916189-1).


Australia’s economic growth continued year after year, with no sign of a recession, and money sloshed around all sectors of the economy until the pandemic hit and almost everything slowed to a crawl. I say almost everything because iron kept being dug up at a rapid pace, along with copper ore and coal, to meet strong demand from the Chinese property sector and railway expansion, which also drove a strong upward trend in prices. In 2020, iron ore alone made up 41 per cent of all exports from Australia by value, at about A$149 billion.

Unfortunately, 2021 has proved to be the year that the merry-go-round stopped and Australia’s mining industry, and indeed its economy, reached a turning point. The era in which China could be trusted to buy an abundance of Australian dirt, and pay good money for it too, has come to an end – and probably for good. Three things have happened recently that dashed hopes that mining would drive the economic recovery.

China’s demand for iron, coal and copper ore and concentrates are now in a very sharp decline as a pending tidal wave of debt threatens to destroy three property developers – Evergrande, Sinic and Fantasia – and signal the end of China’s building boom. China’s infamous ghost cities are now starting to be demolished, releasing large quantities of scrap iron and copper. The Financial Times estimates there is an abundance of idle property that could house 90 million people, though most likely it never will. This inventory of steel and copper will be recycled, as recycling is cheaper and more energy efficient than smelting from ores. This reduces the need for imported Australian coal.

China is in no great rush to buy iron ore. Or copper, aluminium, or lead. And if it was, it would rather not pay hard currency for it. Restocking of new steel supplies is not likely to happen this year, and I have no faith in analyst predictions that iron ore prices will jump again by the end of the year. By the time the scrap is used up, abundant supplies will be available from Central and West Africa.

In 2012, China imported about 70 per cent of all the world’s iron ore transported by sea, or about 680 million metric tons, in addition to its domestic production of about 280 million metric tons. About 60 per cent of the imported ore came from Australia. These days, the estimated total output from fully developed mines in West Africa’s Guinea and the Central African republics of Congo and Cameroon is between 400 million and 600 million tons annually – or almost the entire amount China was importing by sea in 2012.

Given that Cameroon and Congo see 70 percent of their financing requirements covered by the Chinese, new alliances were forged, and the Australians saw their licences revoked and stripped from them. It’s now all over, except for the shouting. Large lawsuits are incoming, seeking damages through international arbitration against the African governments for several Australian and British interests totalling some US$40 billion.

https://mishtalk.com/economics/a-5-trillion-property-bust-in-china-has-profound-implications-for-raw-commodities

[Winehole23]

Evergrande misses another payment, Chinese property bonds tank


The IMF said on Tuesday that China has the ability to address the issues linked to Evergrande's indebtedness, but warned that an escalation of the situation could lead to the emergence of broader financial stress. read more (https://www.reuters.com/world/china/china-has-ability-address-evergrande-situation-still-risks-remain-imf-2021-10-12/)https://www.reuters.com/world/china/china-developers-bonds-shares-hit-again-by-evergrande-contagion-worries-2021-10-13/

[Winehole23]

https://cloudfront-us-east-2.images.arcpublishing.com/reuters/YAMUHTOBUROWZJ5F5LO5CIKJBA.png


"It's a disastrous day," said Clarence Tam, fixed income portfolio manager at Avenue Asset Management in Hong Kong, highlighting how even some supposedly safer "investment grade" firms had now seen 20% wiped off their bonds.


Analysts at JPMorgan also highlighted how international investors were now demanding the highest ever premium to buy or hold 'junk'-rated Chinese debt.

There is now a whopping 1,200 basis point difference between the bank's closely-followed JACI China high yield index and a similar index of investment grade AA-rated local Chinese market bonds, known as "onshore" bonds.

"Evergrande's contagion risk is now spreading across other issuers and sectors," JPMorgan's analysts said.
https://www.reuters.com/world/china/china-evergrande-bondholders-brace-mondays-coupon-deadline-2021-10-11/

[Winehole23]

https://cloudfront-us-east-2.images.arcpublishing.com/reuters/IKMWB5HOXBJYRHJOCWEV7FVN2Q.jpg

[RandomGuy]

Evergrande misses another payment, Chinese property bonds tank

https://www.reuters.com/world/china/china-developers-bonds-shares-hit-again-by-evergrande-contagion-worries-2021-10-13/

Analysis of sector shows many many other debt payments are going to be missed. As I suspected.

I think the known risk of a catastrophic implosion has gone up.

[RandomGuy]

https://cloudfront-us-east-2.images.arcpublishing.com/reuters/IKMWB5HOXBJYRHJOCWEV7FVN2Q.jpg
The likelihood of the debt values for one, if not all, of the companies in that graph being higher than the graph shows is 1.00.

Factor in the off balance sheet systemic risk and it is no wonder that no one wants to loan to them.

[hater]

:lmao

China-US trade surges 35.4% to reach $543 billion in first nine months


China-US trade volume grew 35.4 percent from January to September in dollar terms from last year, Chinese customs statistics revealed on Wednesday.

Although the growth rate was slightly lower than the 36.6-percent-growth in the first eight months, bilateral trade volume still hit $543 billion from January to September. Experts expected this year’s bilateral trade will surpass the level before the China-US trade war in 2018 to reach $700 billion as trade relations between the two countries are getting back to normal.

The growth showed the intertwining character of the world's two largest economies and a strong recovery of the economies from the COVID-19, which will drive global economic recovery as two leading engines, Tian Yun, former vice director of the Beijing Economic Operation Association, told the Global Times on Wednesday.

[SnakeBoy]

Pretty much. Which is why they will never go to war with us, and why we need to press them on human rights.

They'll never go to war directly with us because they know there's no chance they can win.

This was always going to be the decade that globalization as we know it ended and destroyed the CCP economic model. The pandemic has only sped the process along.

It's going to be a bumpy ride, stay nimble.

[Winehole23]

^^^ who's the mechanical materialist now?

:lol

[RandomGuy]

They'll never go to war directly with us because they know there's no chance they can win.

This was always going to be the decade that globalization as we know it ended and destroyed the CCP economic model. The pandemic has only sped the process along.

It's going to be a bumpy ride, stay nimble.

Don't forget the small detail: We both have nukes.

But that said, never underestimate hubris, or nationalism.

[SnakeBoy]

Don't forget the small detail: We both have nukes.

But that said, never underestimate hubris, or nationalism.

Don't sweat the small stuff

[RandomGuy]

Don't sweat the small stuff

Commodity prices gonna plummet, especially anything used in construction, as already noted.

That may take the edge off the supply chain inflation.

Interesting times.

[RandomGuy]

Another Chinese Developer Defaults in Wake of Evergrande Crisis

Chinese property developer Modern Land said Tuesday it had missed repaying principal and interest on a $250 million dollar bond, in yet another sign of the troubles encountered by the country’s overleveraged property sector

Modern Land (ticker 1107.HongKong) said in a filing with the Singapore Stock Exchange that “owing to unexpected liquidity issues” due to the macroeconomic and real estate environments and the Covid-19 pandemic, it didn’t meet the payment due Oct. 25

China...

( ultimate article hiden behind paywall) https://news.yahoo.com/m/d0646863-db8a-3f90-96b7-47672338d624/another-chinese-developer.html

[SnakeBoy]

China’s Plan to Manage Evergrande: Take It Apart, Slowly
Beijing is working on a controlled implosion of the real-estate giant, selling off some assets while limiting damage to home buyers and businesses
https://www.wsj.com/articles/evergrande-china-crisis-real-estate-developers-11636552507

I thought complete bail out or allowing uncontrolled collapse were the only options for governments. China seems to have come up with something new.

[RandomGuy]

China’s Plan to Manage Evergrande: Take It Apart, Slowly
Beijing is working on a controlled implosion of the real-estate giant, selling off some assets while limiting damage to home buyers and businesses
https://www.wsj.com/articles/evergrande-china-crisis-real-estate-developers-11636552507

I thought complete bail out or allowing uncontrolled collapse were the only options for governments. China seems to have come up with something new.

Interesting.

It is the biggest, but every few days some other company starts flashing red warning lights about missed bond payments.

[RandomGuy]

China’s Plan to Manage Evergrande: Take It Apart, Slowly
Beijing is working on a controlled implosion of the real-estate giant, selling off some assets while limiting damage to home buyers and businesses
https://www.wsj.com/articles/evergrande-china-crisis-real-estate-developers-11636552507

I thought complete bail out or allowing uncontrolled collapse were the only options for governments. China seems to have come up with something new.

China's Blowtorch to Property Bubble Melts Bondholders' Wealth
https://www.msn.com/en-us/money/markets/chinas-blowtorch-to-property-bubble-melts-bondholders-wealth/ar-AAQtjRw

Making bondholders take it in the shorts isn't new though. :lol

[RandomGuy]

China’s Plan to Manage Evergrande: Take It Apart, Slowly
Beijing is working on a controlled implosion of the real-estate giant, selling off some assets while limiting damage to home buyers and businesses
https://www.wsj.com/articles/evergrande-china-crisis-real-estate-developers-11636552507

I thought complete bail out or allowing uncontrolled collapse were the only options for governments. China seems to have come up with something new.

"Evergrande, a huge and embattled Chinese property developer, suspended the sale of its shares on the Hong Kong stock exchange, saying only that it was pending the release of “inside information”. The firm’s struggle to service its $300bn debt has raised fears of a financial crisis in China and beyond. Last week it missed a $255m coupon payment. It has yet to release a recovery plan." _-Economist magazine blurb

Or not.

[RandomGuy]

Trading in China Evergrande shares, onshore bonds halted pending announcement

HONG KONG, March 21 (Reuters) - Shares of embattled property developer China Evergrande Group (3333.HK) and onshore bonds issued by its flagship unit Hengda Real Estate Group were suspended from trading on Monday, pending an announcement by the company.

Trading was also halted in shares of its property services unit, Evergrande Property Services Group Ltd (6666.HK), and electric vehicle unit, China Evergrande New Energy Vehicle Group Ltd (0708.HK), exchange filings showed.

The filings gave no further details.

Evergrande, the world's most indebted developer with over $300 billion in liabilities, has been struggling to repay its suppliers and creditors and complete projects and homes.

Hengda secured approval from its onshore bondholders over the weekend to delay a coupon payment due last September to September 2022, according to a filing by the company's lawyer to the Shenzhen Stock Exchange on Sunday.

Hengda held a meeting with creditors of the 4 billion yuan ($629 million) 2025 bond on March 18-19 to approve the payment of interests incurred between September 2020 to September 2021 to be made in September 2023. read more

Evergrande has so far avoided technical bond defaults onshore, though it has missed payments on some offshore bonds.

https://www.reuters.com/business/trading-shares-china-evergrande-units-halted-hkex-2022-03-21/

[RandomGuy]

https://finance.yahoo.com/news/china-credit-investors-themselves-back-034952688.html


“Companies haven’t been transparent about their private debt and upcoming payments, but the market’s also been rife with rumors supposedly linked to short-selling,” said Anthony Leung, head of fixed income at Metropoly Capital HK Ltd. “The lack of transparency has led to a vicious cycle of panic selling and a collapse in the price of securities, which closes refinancing channels.”

Concerns have also cropped up that creditors holding opaque debt might receive preferential treatment, with developers opting to repay those obligations while skipping or extending deadlines for its publicly held offshore bonds. Only weeks after assuring investors it had sufficient working capital and wasn’t facing any cash squeeze, Fantasia Holdings Group Co. defaulted on a public note. It told Fitch that it repaid a private bond just days earlier.

Onshore bondholders can sometimes continue to receive payments, even as borrowers overlook offshore debt. China Evergrande Group paid interest on a local bond even after it had missed coupon payments on several dollar notes.

“Hidden debt worries aren’t new in China,” said Leung. “But when companies come close to the brink of collapse, it becomes even harder to tell what news is real or fake.”

-----------------------------------
https://money.usnews.com/investing/news/articles/2022-03-17/goldman-says-china-high-yield-developers-default-rate-understates-stresses

SHANGHAI (Reuters) - Chinese high-yield property issuers have by one measure defaulted on nearly a quarter of their outstanding bonds this year, Goldman Sachs analysts estimated, highlighting liquidity stress as Beijing looks to stabilise the battered sector.

Estimating the year-to-date default rate at 5.5%, Kenneth Ho and Chakki Ting said in a note Friday that this headline figure understated stress in a sector where developers have entered into bond exchanges to avoid triggering defaults.

"If we assume all the bonds from issuers that have entered into bond exchange or maturity extension transactions as being in default, the (year-to-date) default rate would rise to 23.4%," they said.

Ho and Ting said they maintained a default forecast for the sector of 19% for 2022, with a bull case of 10.5% and a downside case of 31.6%.

"Whilst credit stresses have picked up, China policymakers have also reiterated their accommodative policy stance," they said, adding that "risks are clearly tilted towards the downside case."

Of bonds in the sector that have passed their final maturity dates so far this year, 31% have entered into bond exchange or maturity extension transactions, 26% have defaulted and 42% were fully repaid.

More bond exchanges and defaults are likely, with $2.3 billion maturing in April, and more than $3 billion each in June, July and August, they said.

[RandomGuy]

https://www.youtube.com/watch?v=UptsCnj0vpA

The write down of Evergrandes assets will be the first domino.

[Trainwreck2100]

im so tired of hearing about how evergrand is gonna fuck over the chinese market, they've said that for years, fucking do it already