COMMUNISM Evergrande Denies Rumors Of Bankruptcy As Crisis Boils Over, Social Unrest Breaks Out Across China

[Blacknarwhal]

"Social Unrest Across China." That's a real four-word phrase that will poop in your corn flakes.

Fair use cited so on and so forth.

Zerohedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

Evergrande Denies Rumors Of Bankruptcy As Crisis Boils Over, Social Unrest Breaks Out Across China

by Tyler Durden
Monday, Sep 13, 2021 - 10:14 AM

China Evergrande Group, the largest and most indebted, and certainly most insolvent property developer in China, is - together with its $300+ billion in debt - rapidly approaching its "China moment."

Five days after reports of a technical default at Evergrande, which slammed China's property market and sent Chinese junk bond yields to the highest level since March 2020, the company took the unprecedented step of publishing a statement on its website, according to which it is "indeed facing unprecedented difficulties but it firmly fulfills responsibilities." The company added that it will go all out to resume work and production, ensure to deliver buildings, do everything possible to restore normal operations, and protect the legitimate rights and interests of customers.


The company's statement was also prompted by the growing operational and liquidity crunch that has crippled Evergrande's business and balance sheet, and as Bloomberg reports this morning is now manifesting itself in mounting protests by homebuyers, retail investors and even its own employees, raising the stakes for authorities in Beijing as they try to prevent the property giant’s debt crisis from sparking social unrest.

According to Caixin, police descended on Evergrande’s Shenzhen headquarters late Monday after dozens of people gathered to demand repayments on overdue wealth management products. Protesters numbered in the hundreds on Sunday.

In what appears the sad - and inevitable - beginning of the end for Evergrande, the largest Chinese developer told employees at its office in Shenyang, near the border with North Korea, to work from home after staffers who bought the company’s WMPs staged a protest over the weekend, Bloomberg reported citing a person familiar with the matter said. In Guangzhou, angry homebuyers surrounded a local housing bureau last week to demand Evergrande restart stalled construction.

Videos of protests against the developer in other parts of China were being shared widely on China's microblogging platform, Weibo. For now, there has been indication that any of them have turned violent.

As a reminder, among its creditors, Evergrande lists - in addition to official creditors - various shadow banking conduits such as Wealth Management Products (or WMPs). It is these shadow bank funding sources that are being throttled now as the company finds itself increasingly insolvent.

Monday's uproar follows Evergrande’s proposal late last week to impose lengthy repayment delays on holders of WMPs, the lightly regulated investment vehicles that have become a key source of funding for the developer. While Evergrande tweaked its plan on Monday in an attempt to mitigate the backlash, retail and institutional investors will still face delays unless they accept repayment in the form of Evergrande-developed properties.

And while small-scale protests over troubled investment products aren’t unheard of in China, but they’re rare enough to attract attention from authorities who put a premium on social stability and have little tolerance for unsanctioned gatherings. Whether they prompt Xi Jinping’s government to change tack on Evergrande remains to be seen.

As a reminder, last week we learned that late in August, China’s top financial regulator signed off on the developer’s plan to renegotiate payment deadlines with banks and other creditors. It’s unclear if officials had given explicit guidance on WMPs.

The immediate reason for the public anger is the realization that (most of the) money may be gone: Evergrande proposed three repayment options for WMPs on Monday, according to Bloomberg source: they included repayment through cash installments, properties or investors’ payables on residential units they have already purchased, the people said. Retail investors can choose to be repaid 10% of their principal and interest every quarter, starting the final working day of the month due. The new proposal treats all investors equally, in contrast to an interim plan released late last week that prioritized smaller investors, according to people familiar with the matter.

When Evergrande stopped repaying some investors last Thursday, those holding less than 100,000 yuan ($15,488) were to be paid in full and those with exactly 100,000 yuan were to get half back, according to two investors briefed earlier. Those holding more than 100,000 yuan were to see payments extended by two to four years and amortized.

Apart from the cash option, the new plan allows investors to purchase Evergrande’s residential units, offices, stores and parking units at deeper discounts to offset wealth products due. If investors have bought Evergrande’s residential units by Sept. 12, they can also request to use the money they’re owed to offset payments. Details are still pending for the second and third option. Evergrande doesn’t disclose details of its WMP issuance, making it difficult to gauge the size of its outstanding products.

A local TV station in Anhui province reported that thousands of people in the province hold overdue Evergrande WMPs that total between 1.3 billion and 1.8 billion yuan, citing a wealth management consultant at Evergrande named Liu Yuntin. The consultant said 70% to 80% of Evergrande’s own employees in Anhui purchased such products and that’s likely to be the situation for branches nationwide. Evergrande repeatedly told staff that it would be responsible for interest and principal and that Hui Ka Yan himself would guarantee payments, Liu said.
Then there is the question of bondholders.

With more than $300 billion in liabilities, Evergrande has long been seen as the most systemically important distressed company in China, which unlike its similarly insolvent peer Huarong, has not yet been given an explicit bailout backstop from the government. On top of its obligations to WMP investors and bondholders, it owes about $147 billion in trade and other payables to suppliers and received down payments on yet-to-be-completed properties from more than 1.5 million home buyers as of December according to Bloomberg calculations.
Meanwhile, Evergrande’s bonds are pricing in a near-certain likelihood of default, with its dollar note due 2022 falling by about 2 cents to 31 cents on Monday.

China Evergrande Group may undergo one of the country’s biggest-ever debt restructurings, if the developer’s distressed-level bond prices are any indication.

It’s “almost unavoidable,” said Nomura International Hong Kong Ltd. credit analyst Iris Chen. Her base case is a government-supervised deal that ensures Evergrande delivers homes and pays suppliers, where dollar debt investors would get 25% of their money back. Luther Chai, a senior research analyst at CreditSights Singapore LLC, also predicts Evergrande may default and enter restructuring. That risk is being priced in, with many of Evergrande’s dollar bonds trading near 30 cents.

According to an analysis published on Sunday, Evergrande would undergo one of the country’s biggest-ever debt restructurings, if the developer’s distressed-level bond prices are any indication.

It’s “almost unavoidable,” said Nomura International Hong Kong Ltd. credit analyst Iris Chen. Her base case is a government-supervised deal that ensures Evergrande delivers homes and pays suppliers, where dollar debt investors would get 25% of their money back. Luther Chai, a senior research analyst at CreditSights Singapore LLC, also predicts Evergrande may default and enter restructuring. That risk is being priced in, with many of Evergrande’s dollar bonds trading near 30 cents.

The trick is that nobody really knows what would happen in case of a full-blown bankruptcy. Debt defaults at developers the size of Evergrande are so rare in China that investors, analysts and regulators would only have a few case studies to go on. Kaisa Group Holdings Ltd. in 2015 became the first Chinese builder to default on dollar bonds. The restructuring of another, China Fortune Land Development Co., is currently under negotiation.

Any disorderly failure by the firm may pose a threat to the financial system. The lack of clear precedents also means Chinese authorities have yet to test mechanisms in solving a debt problem quite like Evergrande, which has more than $300 billion in liabilities.

Evergrande restructures its debt and bondholders recover a portion of their funds. This would be an “orderly wind down,” says Omotunde Lawal, head of Barings LLC’s emerging-market corporate debt group. There may be some contagion across China’s property issuers at first, according to Nomura’s Chen, though sentiment would improve as a key overhang would be removed. She expects only a 5% recovery rate for investors in Evergrande unit Scenery Journey Ltd.
It’s essential that normal operations continue after any potential default of a Chinese developer, wrote Morgan Stanley analysts led by Kelvin Pang in an Aug. 18 note. In other words, construction projects would be completed and homes would be delivered. And because dollar debt funding is “crucial” for developers, a defaulted property developer may not necessarily favor onshore creditors over those offshore, according to Morgan Stanley.

In a scramble to shore up its liquidity, the developer said it’s exploring the sale of interests in its listed electric vehicle and property services units, as well as other assets, and seeking to bring in new investors and renew borrowings. It’s also discounting properties aggressively to boost sales, with mixed success. Contracted sales, including those to suppliers and contractors to offset payments, tumbled 26% last month from a year ago.

Evergrande said in August it was forced to suspend work on some projects due to overdue payables. The company’s billionaire founder, Hui Ka Yan, pledged to complete projects this month, issuing what he called a “military order” to ensure property construction and delivery.

 

[Hfcomms]

China’s Lehman moment? Once the end of the string is pulled it starts to unravel the whole ball of yarn. And it won’t be isolated to China either. Everything is so interconnected today once the dominoes start falling they are all going to be knocked down.

 

[bw]

No one wants our buildings any longer, so we can't repay you the money we owe you, but if you like we can pay you in buildings!

Yeah, that'll work fine.

 

[Cacheman]

Seems like this is a good thread to post this article...

China is in deep trouble and bound to get worse

Is China the next superpower? Is the media's depiction of the country as a ten-foot giant really accurate? That's dubious. For all its bluster on the global stage, China is a giant in trouble. Here are some of the reasons we know: Perha...

www.americanthinker.com

americanthinker.com

China is in deep trouble and bound to get worse
By Uldis Sprogis

8-10 minutes

Is China the next superpower? Is the media's depiction of the country as a ten-foot giant really accurate? That's dubious. For all its bluster on the global stage, China is a giant in trouble.

Here are some of the reasons we know:

Perhaps the biggest problem in China is its erstwhile "one child" policy, which created many single, self-absorbed adults with poor social skills and an entitlement mindset that included no great desire to marry young and bear the financial burden of offspring. China switched to a two-child policy and recently revised it to allow three children per family. But it's too little, too late. The best result is that in about 20 years, the Chinese population will probably be more than halved anyway, instead of something worse, and the elderly will be a great burden on their single offspring and the economy.

Already only about 10% of China's young population is getting married, which implies an even more precipitous drop in population in the future. China does not encourage immigration from abroad, so a precipitous drop in population will have a drastically bad impact on a shrinking economy and even on the social life of the average Chinese.

Another problem is income disparity, with a vast gulf of differences between a tiny urban elite and the country's many urban and rural poor. It's an even greater disparity in income wealth distribution than exists in the United States. That may be a reason why the CCP has decided to crack down on glorified celebrities and wealthy capitalists and is forcefully trying to redistribute their wealth, especially to the tech working class, who largely have been working a 996 shift, which means working from 9 A.M. to 9 P.M.., six days a week.

With such a hard work schedule, it is no wonder that the CCP had to suppress a lying flat movement on the internet, which tried to popularize minimum work, no marriage, living single, and not doing much of anything. This movement sprang up as a passive revolt over the oppressive working conditions in the nation. It is no wonder that with slave labor–like working conditions, Chinese youths have little time to socialize and, with low, wages don't have enough money to comfortably support a family with offspring.


The CCP also views foreign influences, and especially the English language, as another corrupting influence on the population. Too many ideas about freedom and a population starts to question why their dictatorial leaders should be there. That is seen as a threat to the country's stability; therefore, the authorities have acted.

The Chinese government recently has stopped having exams for the English language in primary schools. Instructors will probably soon no longer teach much English to the average Chinese. You can almost say the CCP is getting paranoid about Western culture corrupting the Chinese population. Already there has been censorship of Western literature, movies, videos, websites, and apps. Meanwhile, video games are limited to three hours a day for children under 18, visas are harder to get for Chinese citizens and foreigners, and probably more censorship of lifestyle is on the way.
On the foreign policy front, China has problems, too.

Because Chinese fishing fleets fish in the territorial waters of foreign nations, because they make the "Belt and Road" loans to foreign countries for development on unscrupulous terms, and because they build artificial islands in the South China Sea in a bid to nationalize international territory, they are in trouble. They are in even worse trouble because of COVID-19's spread throughout the world, which hasn't improved their global name. Worse still, they threateningly fly military aircraft into Taiwanese airspace, and, in a new development to come of it, many nations have banded together to challenge Chinese hegemony. China's reputation as a potential trusted ally is being quickly eroded, and many companies are leaving China and seeking profitable havens in other countries.

In China's rush to outcompete the West by stealing intellectual property and making cheap knockoffs, the Chinese are developing a bad, unethical reputation internationally. That reduces its clout. Amazon has finally stopped selling thousands of counterfeit Chinese goods on the internet, and many stock investors are beginning to pull their money out of Chinese company stocks, fearing more strong-arm censorship tactics from the CCP such as making for-profit tutoring companies illegal.

China rushed to make a submarine for the military, but that has been trouble for the Chinese, too. The end product was so noisy that it left an easy-to-locate signal underwater, which makes it rather useless as a stealth weapon in future military conflicts. Its aircraft carriers are also handicapped with flaws that make them marginally useful in times of war.


China may be good at knockoffs, but innovation is not its forte. There is no attempt at stimulating intellectual property and patents in research and development. In effect, there is very little national or private incentive for new, innovative companies to start and grow into viable companies, as is the case in Silicon Valley and elsewhere in the USA.

Meanwhile, industrialization is polluting the water supply and countryside, farmers are restricted from moving into cities for fear that food shortages will escalate, wealthy celebrities and capitalists are being financially cut down to size or ostracized, there is a housing bubble that threatens to decimate the real estate business and many workers with it, and the average citizen is being terrorized by a social credit system and cell phone surveillance, all designed to create fear in dissenters and rule-breakers.

There are many signs of hasty faulty planning and building, which is resulting in high-rise building and bridge defects and even collapses, overflowing dams, and severe flooding conditions that are ruining potable drinking water and disrupting many lives. All of this is just further evidence that China has troubles up the wazoo and will have even more in the foreseeable future.

China may still have a favorable balance of trade with other nations, but it seems as though the CCP's unethical attempt to force more traditional communism onto the nation will result in long-duration suffering for the people and an inability to become a respected dominant political player in the international field. The CCP is attempting to further increase centralized top-down government planning, which is always disastrous in the long run and portends failure and misery for China, similar to the final failure of the Soviet Union government.

Many failing debt-overloaded businesses are being subsidized by a deficit spending government, so bankruptcies are still few and far between, but the day of financial reckoning is rapidly coming.

The United States is in bad shape morally and economically, but the power of money has corrupted the leadership of China to the point where no amount of coercive CCP effort will solve the problems. China's troubles will balloon in the foreseeable future. China is in trouble, and the CCP's strong-arm tactics, censorship, and high housing costs are just making a bad situation worse for the average Chinese citizen.

 

[WTSR]

No worries, Biden will bale them out.

 

[Old Gringo]

Interestingly it always siphons down to rules of capitalism.

 

[vestige]

Ain't westernization grand.

 

[Blacknarwhal]

Seems like this is a good thread to post this article...

China is in deep trouble and bound to get worse

Is China the next superpower? Is the media's depiction of the country as a ten-foot giant really accurate? That's dubious. For all its bluster on the global stage, China is a giant in trouble. Here are some of the reasons we know: Perha...

www.americanthinker.com

americanthinker.com

China is in deep trouble and bound to get worse
By Uldis Sprogis

8-10 minutes

Is China the next superpower? Is the media's depiction of the country as a ten-foot giant really accurate? That's dubious. For all its bluster on the global stage, China is a giant in trouble.

Here are some of the reasons we know:

Perhaps the biggest problem in China is its erstwhile "one child" policy, which created many single, self-absorbed adults with poor social skills and an entitlement mindset that included no great desire to marry young and bear the financial burden of offspring. China switched to a two-child policy and recently revised it to allow three children per family. But it's too little, too late. The best result is that in about 20 years, the Chinese population will probably be more than halved anyway, instead of something worse, and the elderly will be a great burden on their single offspring and the economy.

Already only about 10% of China's young population is getting married, which implies an even more precipitous drop in population in the future. China does not encourage immigration from abroad, so a precipitous drop in population will have a drastically bad impact on a shrinking economy and even on the social life of the average Chinese.

Another problem is income disparity, with a vast gulf of differences between a tiny urban elite and the country's many urban and rural poor. It's an even greater disparity in income wealth distribution than exists in the United States. That may be a reason why the CCP has decided to crack down on glorified celebrities and wealthy capitalists and is forcefully trying to redistribute their wealth, especially to the tech working class, who largely have been working a 996 shift, which means working from 9 A.M. to 9 P.M.., six days a week.

With such a hard work schedule, it is no wonder that the CCP had to suppress a lying flat movement on the internet, which tried to popularize minimum work, no marriage, living single, and not doing much of anything. This movement sprang up as a passive revolt over the oppressive working conditions in the nation. It is no wonder that with slave labor–like working conditions, Chinese youths have little time to socialize and, with low, wages don't have enough money to comfortably support a family with offspring.


The CCP also views foreign influences, and especially the English language, as another corrupting influence on the population. Too many ideas about freedom and a population starts to question why their dictatorial leaders should be there. That is seen as a threat to the country's stability; therefore, the authorities have acted.

The Chinese government recently has stopped having exams for the English language in primary schools. Instructors will probably soon no longer teach much English to the average Chinese. You can almost say the CCP is getting paranoid about Western culture corrupting the Chinese population. Already there has been censorship of Western literature, movies, videos, websites, and apps. Meanwhile, video games are limited to three hours a day for children under 18, visas are harder to get for Chinese citizens and foreigners, and probably more censorship of lifestyle is on the way.
On the foreign policy front, China has problems, too.

Because Chinese fishing fleets fish in the territorial waters of foreign nations, because they make the "Belt and Road" loans to foreign countries for development on unscrupulous terms, and because they build artificial islands in the South China Sea in a bid to nationalize international territory, they are in trouble. They are in even worse trouble because of COVID-19's spread throughout the world, which hasn't improved their global name. Worse still, they threateningly fly military aircraft into Taiwanese airspace, and, in a new development to come of it, many nations have banded together to challenge Chinese hegemony. China's reputation as a potential trusted ally is being quickly eroded, and many companies are leaving China and seeking profitable havens in other countries.

In China's rush to outcompete the West by stealing intellectual property and making cheap knockoffs, the Chinese are developing a bad, unethical reputation internationally. That reduces its clout. Amazon has finally stopped selling thousands of counterfeit Chinese goods on the internet, and many stock investors are beginning to pull their money out of Chinese company stocks, fearing more strong-arm censorship tactics from the CCP such as making for-profit tutoring companies illegal.

China rushed to make a submarine for the military, but that has been trouble for the Chinese, too. The end product was so noisy that it left an easy-to-locate signal underwater, which makes it rather useless as a stealth weapon in future military conflicts. Its aircraft carriers are also handicapped with flaws that make them marginally useful in times of war.


China may be good at knockoffs, but innovation is not its forte. There is no attempt at stimulating intellectual property and patents in research and development. In effect, there is very little national or private incentive for new, innovative companies to start and grow into viable companies, as is the case in Silicon Valley and elsewhere in the USA.

Meanwhile, industrialization is polluting the water supply and countryside, farmers are restricted from moving into cities for fear that food shortages will escalate, wealthy celebrities and capitalists are being financially cut down to size or ostracized, there is a housing bubble that threatens to decimate the real estate business and many workers with it, and the average citizen is being terrorized by a social credit system and cell phone surveillance, all designed to create fear in dissenters and rule-breakers.

There are many signs of hasty faulty planning and building, which is resulting in high-rise building and bridge defects and even collapses, overflowing dams, and severe flooding conditions that are ruining potable drinking water and disrupting many lives. All of this is just further evidence that China has troubles up the wazoo and will have even more in the foreseeable future.

China may still have a favorable balance of trade with other nations, but it seems as though the CCP's unethical attempt to force more traditional communism onto the nation will result in long-duration suffering for the people and an inability to become a respected dominant political player in the international field. The CCP is attempting to further increase centralized top-down government planning, which is always disastrous in the long run and portends failure and misery for China, similar to the final failure of the Soviet Union government.

Many failing debt-overloaded businesses are being subsidized by a deficit spending government, so bankruptcies are still few and far between, but the day of financial reckoning is rapidly coming.

The United States is in bad shape morally and economically, but the power of money has corrupted the leadership of China to the point where no amount of coercive CCP effort will solve the problems. China's troubles will balloon in the foreseeable future. China is in trouble, and the CCP's strong-arm tactics, censorship, and high housing costs are just making a bad situation worse for the average Chinese citizen.

China's economy has been 30 percent smoke, 30 percent mirrors, and 40 percent actual economy for years.

 

[Doomer Doug]

In the name of God let the VILE china communist barbarians finally be held accountable for their many WARCRIMES over the last 70 years, ESPECIALLY releasing the binary bio weapon from wuhan. Xi the Merciless can finally go to hell where he belongs.

 

[rob0126]

Makes me wonder if the ccp is going to abandon the majority of its population.

 

[Doomer Doug]

China’s Lehman moment? Once the end of the string is pulled it starts to unravel the whole ball of yarn. And it won’t be isolated to China either. Everything is so interconnected today once the dominoes start falling they are all going to be knocked down.

But socialism/communism WORKS. just ask biden.

 

[The Snack Artist]

If they could print their own money, the problem would be solved. But only in theory. It would still exist. Now, apply this theory to the U.S. and you can see how unsustainable our debt is and why we will NEVER pay it back.

 

[Quiet Man]

Evergande is huge. It will be a disaster if they fail uncontrollably. It will spread around the world.

 

[The Snack Artist]

Evergande is huge. It will be a disaster if they fail uncontrollably. It will spread around the world.

This debacle will undoubtedly hurt jyna. The world's reserve currency is the dollar. Will "investors" flee to the dollar when they go down? We shall see.

 

[psychgirl]

Maybe they shouldn’t have given all their money to Sleepy Joe

 

[Dobbin]

Ain't westernization grand.

Maybe Evergrande is "too big to fail?"

Print a few more Yen, and call it saved.

No wait - print a few more dollars, with Joe's help - and call it saved.

This is what we do - support the Chinese Hegemony.

Dobbin

 

[Sid Vicious]

This debacle will undoubtedly hurt jyna. The world's reserve currency is the dollar. Will "investors" flee to the dollar when they go down? We shall see.

The dollar is going to be broken soon as evidenced by the Saudis starting to cozy up to the Russians. Separate the dollar from OPEC and our economy implodes overnight.

I've read reports made in the past that china is too big and once communism failed they would break up into 4-6 different countries.

 

[The Snack Artist]

The dollar is going to be broken soon as evidenced by the Saudis starting to cozy up to the Russians. Separate the dollar from OPEC and our economy implodes overnight.

I've read reports made in the past that china is too big and once communism failed they would break up into 4-6 different countries.

jyna is like a chocolate Easter Bunny. Hard shell on the outside edge with zero in the interior.

 

[vestige]

jyna is like a chocolate Easter Bunny. Hard shell on the outside edge with zero in the interior.

Also a good description of America

 

[Housecarl]

The dollar is going to be broken soon as evidenced by the Saudis starting to cozy up to the Russians. Separate the dollar from OPEC and our economy implodes overnight.

I've read reports made in the past that china is too big and once communism failed they would break up into 4-6 different countries.

The FRN isn't just backed via OPEC oil delivery guarantees but also by the amount of canned sunshine the US possesses, and that isn't valued in terms of equivalent kW-hs either.....

 

[Samuel Adams]

Also a good description of America

Beg to differ, when push comes to shove, but....point taken.

 

[samus79]

My question is, how desperate will they get to hold onto power and onto their dream of becoming the lone world super power? My theory is one of the big reasons they intentionally released covid and allowed it to spread around the world was to knock everyone else down a peg to their level. Once the collapse is seen to be imminent they might lash out with something far worse than covid.

 

[LoupGarou]

Evergrand is not the only one in trouble over there. And there have been plenty of people warning about this for at least 2 years.

From the guy that brought us "Take down the CCP!" (Miles Guo):
Mr. Miles Guo’s warning on forthcoming economic bomb - YouTube (5:23)
6 25 2021 Miles Guo (Gettr): CCP's Plan to Detonate Its Financial Nuclear Bomb To Crush US Europe - YouTube (5:22)
6/20/2021 Mr.Miles Guo's warning - YouTube (17:55)

The translations on some of them are rough, but you get the drift. The ball has started to roll and nobody knows what is about the get crushed first. I'm wondering if China starts to see it take more damage than anyone else up front, that it launches against Taiwan and EVERYTHING else at once, as well as gets it's proxies in the fight (Iran, NK, SouthAmerica...)

The song: Steve Bannon's War Room Video: Miles Guo - Take Down the CCP - YouTube (4:00)

 

[Doomer Doug]

China was 45 miles off the Alaskan coast with war ships flipping us off.
They are ptepping for WAR with the USA. Russia has 200, 000 plus troops in war games next to Poland. Wuhan binary bioweapon is exploding in china since they lost control of it. is everywhere.

 

[bbbuddy]

The dollar is going to be broken soon as evidenced by the Saudis starting to cozy up to the Russians. Separate the dollar from OPEC and our economy implodes overnight.

I've read reports made in the past that china is too big and once communism failed they would break up into 4-6 different countries.

Kinda like here???

 

[bracketquant]

No worries, Biden will bale them out.

And Hunter will paint a rosy picture.

 

[danielboon]

China was 45 miles off the Alaskan coast with war ships flipping us off.
They are ptepping for WAR with the USA. Russia has 200, 000 plus troops in war games next to Poland. Wuhan binary bioweapon is exploding in china since they lost control of it. is everywhere.

INDEED

 

[Old Gray Mare]

No worries, Biden will bale them out.

It may be the China real estate bubble is bursting and taking their banks down with it? The CCP recently enacted new regulations regarding real estate than has in effect slowed the volatility of their real estate market.

Joe can't bail China out on this one. Its many trillions of trillions.

 

[marsh]

Behemoth in China Real Estate Readying for Bankruptcy - Is This the Beginning of a Massive China Real Estate Crash? | The Gateway Pundit | by Joe Hoft

Last week we reported on the massive real estate corporation based in Hong Kong with holdings throughout China, Evergrande. Now the firm is readying for bankruptcy.

www.thegatewaypundit.com

Hong Kong Behemoth in China Real Estate Readying for Bankruptcy – Is This the Beginning of a Massive China Real Estate Crash?

By Joe Hoft
Published September 14, 2021 at 8:30am

Last week we reported on the massive real estate corporation based in Hong Kong with holdings throughout China, Evergrande. Now the firm is readying for bankruptcy.

Here is our post last week.


Zerohedge reported this morning:

It took Evergrande less than a day to go from denying “rumors” of bankruptcy (as per a statement posted on its website earlier today), to confirming that a bankruptcy is imminent.

In a filing on the Hong Kong stock exchange on Tuesday, Evergrande which was busy trying to convince angry Chinese mobs that they will get their money and/or apartments and that it has no plans of default, the company all but conceded that a bankruptcy is imminent when it said it has hired notable bankruptcy advisors Houlihan Lokey and Admiralty Harbour Capital as joint FAs to “assess the firm’s capital structure”, a well-known euphemism of “prepare to file for bankruptcy.” And just so there was no doubt as to what is coming next, the company said if it’s unable to repay debts on time or get creditors to agree to extensions or alternative arrangements, it may lead to cross-default.

It quickly went downhill from there, with the company saying that it expects “significant continuing decline” in contract sales in September, resulting in “continuous deterioration” of cash collection, according to the statement. That will place “tremendous pressure” on the group’s cashflow and liquidity.

Finally, guaranteeing that a default is just a matter of days if not less, the company admitted that it has failed to make “material progress” on the sale of stakes in China Evergrande New Energy Vehicle Group Ltd. and Evergrande Property Services Group Ltd., while the sale of its office building in Hong Kong hasn’t been completed within the expected timetable.

Is this the beginning of the fall of the Chinese economy?

 

[Sleeping Cobra]

Evergrande, one of China's biggest real estate developers, has raised concerns that it will be unable to repay investors. Its debts, in the form of bonds, have been repeatedly downgraded by ratings agencies over concerns over how it has struggled to raise the money to meet repayments.16 hours ago

 

[Sleeping Cobra]

But socialism/communism WORKS. just ask biden.

Funny how the Government claimed for decades they hate Communism but I bet they would love to have that much power over us - Americans.

 

[Techwreck]

Not sure this will make the Great Reset Omelette, but sure sounds like some economic eggs are about to get broken.

 

[night driver]

If EVERYTHING falls the way the Mandarins want, Evergrande will get unwound without major violence.

But there are at least 3 more standing right behind Evergrande in the same suits.

At SOME point those WILL be internationally contagious, and I expect to see Biden speaking in a month or so about how the Chinese contagion is contained.

You won't see the parenthetical "to Earth" on the statement.

 

[Cacheman]

Wonder who owned these?

https://twitter.com/i/web/status/1437664359778381826

View: https://twitter.com/Jon_Hartley_/status/1437664359778381826?s=20

 

[Blacknarwhal]

If EVERYTHING falls the way the Mandarins want, Evergrande will get unwound without major violence.

But there are at least 3 more standing right behind Evergrande in the same suits.

At SOME point those WILL be internationally contagious, and I expect to see Biden speaking in a month or so about how the Chinese contagion is contained.

You won't see the parenthetical "to Earth" on the statement.

Think that's off the table.

Fair use cited so on and so forth.

Zerohedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

China's "Lehman Moment" Arrives On 13th Anniversary Of Lehman Bankruptcy: Beijing Tells Banks Evergrande Won't Pay Interest

by Tyler Durden
Wednesday, Sep 15, 2021 - 09:17 AM

Yesterday, when covering the non-stop drama surrounding China's most insolvent property developer, Evergrande, we said that it would be remarkably ironic if Evergrande were to announce a default - which everyone knows is coming - today, on the 13th anniversary of Lehman's bankruptcy filing on Sept 15, 2008.

Well, in this delightfully absurd world we live in, that's just what happened only instead of Evergrande making the announcement, it was the entity that will soon control the massively overlevered property developer that made it for them: the Chinese government.

According to Bloomberg, Chinese authorities told major lenders to China Evergrande Group not to expect interest payments due next week on bank loans, which takes the cash-strapped developer a step closer the nation’s largest modern-day restructurings, and guarantees that China's "Lehman Moment" is now just a matter of days, if not hours.

According to Bloomberg, citing unnamed sources, the Ministry of Housing and Urban-Rural Development told banks in a meeting this week that Evergrande won’t be able to pay its debt obligations due on Sept. 20, and instead most of Evergrande’s working capital in now being used to resume construction on existing projects, the housing ministry told bankers, according to a Bloomberg source.

And since nonpayment of interest and principal will represent an event of default, the company is unlikely to make any subsequent interest, or principal, payments either since it will have already default even though Bloomberg claims that "Evergrande is still discussing the possibility of getting extensions and rolling over some loans." It won't, especially since the developer will also miss a principal payment on at least one loan next week, which means it's game over.

Meanwhile, as reported previously, Chinese authorities are already laying the groundwork for a debt restructuring of the $300 billion company (which recently hired Houlhan Lokey to advise it during the upcoming historic bankruptcy), assembling accounting and legal experts to examine the finances of the group. With senior leaders in Beijing silent on whether they will allow Evergrande creditors to suffer major losses, bondholders have priced in slim odds of a rescue infuriating countless investors and creditors who have mobbed the company's offices across the country and also gathered at its HQ, demanding the company "return their money." It won't happen.

It’s unclear whether Evergrande, founded by billionaire Hui Ka Yan, intends to pay about $84 million of dollar-bond interest due Sept. 23. We doubt it: according to Bloomberg, Guangdong officials have turned down at least one bailout request from Hui, who owns a controlling stake in the developer.

The company’s complex web of obligations to banks, bondholders, suppliers and homeowners has become one of the biggest sources of financial risk in the world’s second-largest economy.

China banks and property firms tumbled after Bloomberg reported the delayed payments, while Evergrande dollar bonds and shares hit session lows Wednesday afternoon, after Bloomberg's report, as bond investors are bracing for missed payments and as Moody’s and Fitch both downgraded Evergrande this month, citing an increasing likelihood of default.

The Firm’s 8.75% note due 2025 fell 1.6 cents on the dollar to 25.8 cents as of 2:27pm in Hong Kong, according to Bloomberg-compiled prices. The 8.25% dollar bond due 2022 dropped 1.4 cents to 25.3 cents, on pace for record closing low. Shares fell as much as 6.1% to their lowest since January 2014.

As noted on Monday, Evergrande’s failure to meet its obligations on time has led to protests across China by homebuyers, retail investors and even the developer’s own staff, raising the prospect of social unrest if the property giant’s troubles spin out of control. The company said on Tuesday if it’s unable to repay debts on time or get creditors to agree to extensions or alternative arrangements, it may lead to cross-default.

Whether the selloff drags down the broader credit market may depend on the company’s ability to buy time with banks, as well as the overall state of the Chinese economy. A messy default on loans could stoke fears of widespread contagion, something Xi Jinping’s government has been keen to avoid even as it tightens financing restrictions on overstretched developers and discourages government bailouts.

Commenting on the upcoming fireworks, Keith Temperton, sales trader at Forte Securities said "The Asian banks will get hit hard if there's a default, but then there will be a 10-year recovery process. The market's getting a hang of it. The way they've managed the news flow seems quite clever. They haven't let a swathe of bad news at once."

That's true, but as Mark Twain said, when explaining "How do you go bankrupt? Two ways. Gradually, then suddenly."

Until now we were in the "gradually" phase. Today, we just got to the "suddenly" part.

 

[Blacknarwhal]

There IS an update in here, folks; I just don't know how to change the title to reflect that. I think that's a mod's position.

 

[Twisted]

Houlihan Lokey oversaw the Lemans bankruptcy lol! The spelling in you last post is Houlhan Lokey. Are they the same?

Edit to add:
Houlihan Lokey China Ltd and Admiralty Harbour Capital Ltd will assess the group’s capital structure, evaluate the liquidity of the group and “explore all feasible solutions to ease the current liquidity issue and reach an optimal solution for all stakeholders as soon as possible”, Xu added.

 

[night driver]

IF within the first 24 hours, just edit the OP, and you will have access to the title.
If AFTER the first 24 hrs, have to PM a MOD.

 

[Dozdoats]

Confusion to the enemy!

 

[marsh]

Evergrande Is Collapsing - Will Not Make Its Massive Debt Payments - 5 Times Bigger than Lehman Brothers | The Gateway Pundit | by Joe Hoft

This is really scary. These are big numbers that may affect the entire world.

www.thegatewaypundit.com

Evergrande Is Collapsing – Will Not Make Its Massive Debt Payments – 5 Times Bigger than Lehman Brothers

By Joe Hoft
Published September 15, 2021 at 2:30pm

This is really scary. These are big numbers that may affect the entire world.

Hong Kong real estate holding company in China, Evergrande, is in dire straights.

This company has $300 billion in debt and it is unable to make its payments.

[After living in Hong Kong the past decade, my hunch is that Evergrande is not the only company unable to make debt payments on real estate in China.]

A couple of days ago we warned that Evergrande is preparing for bankruptcy.



The problem is Evergrande is five times the size of Lehman Brothers, made famous in the 2008 crash in the US. On September 7, Zerohedge shared:

With algos busy chasing upward momentum in futures and global stocks, the biggest – if largely ignored story – remain the ongoing collapse of “China’s Lehman“, the $300+ billion China Evergrande, where following our earlier reports (see below) that a bank run emerged among creditors of the biggest and most indebted Chinese developer as its bonds were no longer eligible collateral in the repo market after a ratings downgrade, on Monday the rout went from bad to catastrophic as various Evergrande bonds crashed amid a liquidation frenzy, prompting China’s stock exchanges to halt trade.

The Shanghai Stock Exchange said in a statement that it had temporarily suspended trading in China Evergrande Group’s 6.98% July 2022 corporate bond following “abnormal fluctuations.” The exchange had also suspended trading in the bond on Friday. Tether commercial paper could be Chinese and it is one of the largest commercial paper traders in existance.

View: https://youtu.be/p1wzC8ozaDc
10:35 min

[Personal comment – there are numerous billionaires in Hong Kong and many, if not all, are in Chinese real estate. They may have been encouraged to do so. If these companies have problems similar to Evergrande, this could be a very big problem.]

This really could make 2008 in the US look like nothing. Hold tight.