# China's Evergrande Group crisis



## greggles (19 September 2021)

This is starting to get very serious. The Evergrande Group has $300 billion of liabilities and it is increasingly looking like it will default. Some analysts have described the Evergrande crisis as “China’s Lehman Brothers moment”

But the problems with China's property sector look terminal. Ghost cities, overpriced real estate, property development companies failing, projects sitting unfinished. It's all starting to look very untidy, and it could be a major trigger for an economic crisis in China.




Is this the corporate collapse that will kick off a correction on global markets?


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## over9k (19 September 2021)

greggles said:


> This is starting to get very serious. The Evergrande Group has $300 billion of liabilities and it is increasingly looking like it will default. *Some analysts have described the Evergrande crisis as “China’s Lehman Brothers moment”*
> 
> But the problems with China's property sector look terminal. Ghost cities, overpriced real estate, property development companies failing, projects sitting unfinished. It's all starting to look very untidy, and it could be a major trigger for an economic crisis in China.
> 
> ...




Oh you... 


(In answer to your question, I'm honestly thinking it more likely than not at this point)


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## over9k (19 September 2021)

Evergrande is now paying its creditors with properties/assets. No idea if said bonds were secured against the assets but it's happening even if they weren't.


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## againsthegrain (19 September 2021)

so the other thirty dollar question is will zee bail them out, and I mean not just evergrande because he will have to bail the others if he does the first? can he, probably can, does he want to?


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## Value Collector (19 September 2021)

againsthegrain said:


> so the other thirty dollar question is will zee bail them out, and I mean not just evergrande because he will have to bail the others if he does the first? can he, probably can, does he want to?



If I had to guess, I think they won’t be bailed out as such, but will be nationalised in some way.


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## Dona Ferentes (19 September 2021)

In an announcement [last]n Wednesday, the Chinese Housing Ministry confirmed that Evergrande would not be making interest payments to banks scheduled for Monday. This has raised the uncomfortable possibility that Evergrande’s woes could spread into the Chinese banking system, with potentially far-reaching consequences.

_Contagion_ ? _Level playing field for repayments_ ?


> In a recent interview with _Bloomberg_, Nomura International Hong Kong credit analyst Iris Chen shared her prediction that Beijing will ensure that Evergrande delivers homes to buyers and pays suppliers, but that dollar denominated investors would get only 25 per cent of their money back.


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## divs4ever (19 September 2021)

Value Collector said:


> If I had to guess, I think they won’t be bailed out as such, but will be nationalised in some way.



 some sort of help for the Chinese population ( workers/buyers. debtors ) looks a likely choice to me 

 ALTHOUGH China  has a solid amount of US denominated debt  it could liquidate  , and redeem the Evergrande foreign bonds ( at say 90 cents in the dollar face value )

 leaving China less exposed to US sanctions in the future 

 i can't get a good reading of Xi , but he is certainly no klutz 

 i would love to know who is at risk in Evergrande defaults on the US denominated bonds  , it probably wouldn't take much to trigger a GFC ver. 2  ( you can bet they have been leveraged up )


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## Garpal Gumnut (19 September 2021)

I've just been down a few rabbit holes on this. 

Sentiment is Xi will bail out domestic Chinese property market at a cost but not foreign bond holders.

Fe may fall further as a result and foreign property prices will be hit as Chinese developers sell foreign property assets. 

Otherwise its business as usual. 

Then its getting towards October.

gg


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## Knobby22 (19 September 2021)

againsthegrain said:


> so the other thirty dollar question is will zee bail them out, and I mean not just evergrande because he will have to bail the others if he does the first? can he, probably can, does he want to?



On ABC they said no one is getting bailed out.
They showed some unfinished residential buildings being collapsed.
Its not the USA. Xi won't look after the wealthy and as we know he is actually taking a few of them on.


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## divs4ever (19 September 2021)

i am thinking  the minnows and workers first ( if anybody )

 but this is China we are talking about  , Xi's father was a  Chairman Mao  general  ( so ' tough love '  is very possible )

 obviously Nationalization  is a possibility  as well  since Evergrande was a diverse conglomerate 

 now in the West one option would be the government to grab a major stake  ( say 50% ) , but would that be a Chinese option


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## qldfrog (19 September 2021)

Knobby22 said:


> On ABC they said no one is getting bailed out.
> They showed some unfinished residential buildings being collapsed.
> Its not the USA. Xi won't look after the wealthy and as we know he is actually taking a few of them on.



RE is a national game there.. similar to Australia except that the IP flats are usually left empty.not bailing them out means a lot of small investors but also retirees with Evergrande coupons and contractors etc will lose..i do not believe Xi can affort  not to bail at least some of these ..


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## Knobby22 (19 September 2021)

divs4ever said:


> i am thinking  the minnows and workers first ( if anybody )
> 
> but this is China we are talking about  , Xi's father was a  Chairman Mao  general  ( so ' tough love '  is very possible )
> 
> ...



My guess is the conglomerate will be split up  and the good bits sold to help pay the debt. 
Also there will be someone who helped run the company publicly trialled and jailed for not acting in accordance with Communist principles.


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## Knobby22 (19 September 2021)

qldfrog said:


> RE is a national game there.. similar to Australia except that the IP flats are usually left empty.not bailing them out means a lot of small investors but also retirees with Evergrande coupons and contractors etc will lose..i do not believe Xi can affort  not to bail at least some of these ..



We shall see. It depends on the whims of a despot.


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## moXJO (19 September 2021)

China won't show weakness at this point. Most likely nationalisation and hush it. Otherwise there is a deep dark hole of hidden finance and debt that no one wants to go down.


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## divs4ever (20 September 2021)

although if China could bring down two  or three  international 'too big to fail ' banks ( or hedge funds )  that would be very tempting to them 

 remember  with the current argy-bargy China probably  considers itself involved in a cold war


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## qldfrog (20 September 2021)

Knobby22 said:


> My guess is the conglomerate will be split up  and the good bits sold to help pay the debt.
> Also there will be someone who helped run the company publicly trialled and jailed for not acting in accordance with Communist principles.



Jailed or shot...


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## divs4ever (20 September 2021)

either is possible under Xi remember the tainted milk scandal  , they do take punishment seriously


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## divs4ever (20 September 2021)

CHINA’S COMMON PROSPERITY - EXPLAINED!


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## over9k (20 September 2021)

It's getting worse:


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## greggles (20 September 2021)

over9k said:


> It's getting worse:
> 
> View attachment 130506




This amounts to a fire sale of assets. $300 billion of liabilities is a lot to extinguish by paying with discounted property, especially in an overpriced property market. This is clearly the only option they have, but it's not going to be good for China's property market.



> Specific payment methods and details are subject to local conditions, a customer service representative told Reuters on Sunday.
> 
> According to a proposal seen earlier by Reuters that Evergrande did not confirm, wealth management product investors can choose from discounted apartments, office, retail space or car parks for repayment.












						Evergrande begins repaying wealth product investors with property
					

Cash-strapped developer China Evergrande Group (3333.HK) has begun repaying investors in its wealth management products with real estate, a unit of its main Hengda Real Estate Group Co Ltd unit said.




					www.reuters.com


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## Sean K (20 September 2021)

greggles said:


> This amounts to a fire sale of assets. $300 billion of liabilities is a lot to extinguish by paying with discounted property, especially in an overpriced property market. This is clearly the only option they have, but it's not going to be good for China's property market.
> 
> 
> 
> ...




Any significant Chinese developers in Australia who will need to sell assets quickly or not be able to follow through with builds I wonder? Probably concentrated in the commercial sector.


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## Dona Ferentes (20 September 2021)

China’s Communist ‘Common Prosperity’ Campaign​ 
The “common prosperity” ideology is the realization of Chinese socialism imposed upon market-based, modern activity, which makes it especially hard for investors to interpret.









						China’s Communist ‘Common Prosperity’ Campaign
					

The “common prosperity” ideology is the realization of Chinese socialism imposed upon market-based, modern activity, which makes it especially hard for investors to interpret.



					thediplomat.com
				




...  _looking like a Lehman moment ??_


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## wabullfrog (20 September 2021)

Another POV, admittedly from Twitter but thought it was an interesting read.



Same info presented in a more conventional way









						Threader - Good threads every day
					

Welcome to Threader, a place to read and discover stories and knowledge from Twitter. Get a selection of good threads every day.




					threader.app


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## basilio (20 September 2021)

wabullfrog said:


> Another POV, admittedly from Twitter but thought it was an interesting read.
> 
> 
> 
> ...





Excellent analysis.  Not good news at all.


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## greggles (20 September 2021)

It feels like we are at a tipping point. Real estate market and financial markets at highs throughout most of the western world, but it all feels like it's built on a foundation of sand and does not reflect reality. Is the Australian economy in better shape now than it was in 2019? Or is it all an illusion driven by COVID-19 induced irrationality?

The CCP is trying to prevent the Chinese economy from imploding by injecting capital into the banking system, but to what end? So more easy money can prop up the house of cards?

How much more money can governments around the world print before the chickens finally come home to roost? There are consequences for all things, and there is a price to pay for endless money printing and low interest rates.

Time to pay the piper?


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## over9k (20 September 2021)

greggles said:


> *It feels like we are at a tipping point.* Real estate market and financial markets at highs throughout most of the western world, but it all feels like it's built on a foundation of sand and does not reflect reality. Is the Australian economy in better shape now than it was in 2019? Or is it all an illusion driven by COVID-19 induced irrationality?
> 
> The CCP is trying to prevent the Chinese economy from imploding by injecting capital into the banking system, but to what end? So more easy money can prop up the house of cards?
> 
> ...



Here's evergrande today:




I've been expecting something like this for a long time. Very concerned that this will be the domino that falls or the thing that upsets the apple cart or just pick your idiom.


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## Sean K (20 September 2021)

over9k said:


> I've been expecting something like this for a long time. Very concerned that this will be the domino that falls or the thing that upsets the apple cart or just pick your idiom.




That is the question isn't it. Is it contained in China. Will they pull a rabbit out of the hat.


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## over9k (20 September 2021)

kennas said:


> That is the question isn't it. Is it contained in China. Will they pull a rabbit out of the hat.



Well, we first have to figure out just what rabbit could even be pulled from the hat before we start thinking about whether they'll actually be able to do it or not. 

A lot of china's economic problems are long term headwinds. They've been cracking down on all kinds of stuff all year, casino's were just the latest of a long list a few days ago. 

There's more to come, I just don't know what. According to the people I follow, they've been planning this for quite some time.


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## joeno (20 September 2021)

Does anyone think evergrande might be a good stock pick if it drops a bit more? Or am I crazy.

I'm looking at luckin coffee and we might see a similar "long term bounce" if it drops to ridiculous lows without going completely bust


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## againsthegrain (20 September 2021)

joeno said:


> Does anyone think evergrande might be a good stock pick if it drops a bit more? Or am I crazy.
> 
> I'm looking at luckin coffee and we might see a similar "long term bounce" if it drops to ridiculous lows without going completely bust




yeah shure.. they will send u sand as divy payout


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## basilio (20 September 2021)

Feels like a re run of 2008. 









						Shares in China’s Evergrande plunge again as fears of contagion grow
					

Hong Kong stock fell up to 19% amid default fears that are beginning to have a knock-on effect on other markets




					www.theguardian.com


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## frugal.rock (20 September 2021)

againsthegrain said:


> yeah shure.. they will send u sand as divy payout



However to receive your sand divvy, you must first pay a ¥100 fee and supply a reply paid return addressed envelope.... and wait around 3 years or so


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## waterbottle (20 September 2021)

This is certainly gaining traction in financial news...

Not sure what the long-term consequences will be though. I do remember when Luckin coffee (?sp) was ousted for fraud, several commentators were quick to highlight it was one of many Chinese companies defrauding investors with false financial records. In fact, these fears have been ever-present in China since as far as I can remember (at least post-2008) when each year doubt has been cast over the accuracy of China's GDP.

The reality has been that despite this concern, accurate or not, it has proven irrelevant as the CCP - to their credit - have managed to maintain stability throughout their economy and amongst their society. 

I think the question here is whether the CCP _can_ lose control, and if not, is it willing to cede control to market forces?

I would think the answer to both of those question is a firm 'no', and that's backed up by the actions of the CCP in regards to previous economic & health issues.


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## qldfrog (20 September 2021)

https://finance.yahoo.com/news/chinese-property-developer-halts-trading-080415576.html


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## over9k (20 September 2021)

U.S Futures have been dropping precipitously all day, I'd say about 15ish basis points per hour. 

It's now 15 mins before open and the s&p is down 1.6% premarket. Most of europe is more than 2% in the red, the HSI closed 3.3% down as normal chinese markets were closed today (can't remember why), and the vix is up 23%.


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## joeno (21 September 2021)

over9k said:


> U.S Futures have been dropping precipitously all day, I'd say about 15ish basis points per hour.
> 
> It's now 15 mins before open and the s&p is down 1.6% premarket. Most of europe is more than 2% in the red, the HSI closed 3.3% down as normal chinese markets were closed today (can't remember why), and the vix is up 23%.




A correction to the US market is well due. #1 victim of the pandemic. All problems being bandaided by money-printing. I'm surprised the S&P has boosted over their pre-pandemic levels so much (despite the money printing).

My guess is another 30% drop some time before the federal reserve panics and decides to annihilate the USD so investors are happy.


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## aus_trader (21 September 2021)

No where to hide... ?under a 🪨

Maybe the USD will strengthen further in the short term due to "flight to safety"


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## qldfrog (21 September 2021)

aus_trader said:


> No where to hide... ?under a 🪨
> 
> Maybe the USD will strengthen further in the short term due to "flight to safety"
> 
> View attachment 130553



I think it is a given.my us portfolio..bear focused went up and i offloaded the riskier positions.
Very disappointed with silver which is down down down..and that is a major part of my supposedly bear portfolio


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## Smurf1976 (21 September 2021)

over9k said:


> They've been cracking down on all kinds of stuff all year, casino's were just the latest of a long list a few days ago.
> 
> There's more to come, I just don't know what.



Some of the things China's been cracking down on are really quite bizarre.

Casinos OK I can follow some logic being applied there. Not saying I agree but I can follow that there's some thinking behind it.

Playing video games is stretching it though, and pop music is getting a bit weird as a thing for a government to crack down on.

My thinking being that Evergrande is a visible symptom and a "poster boy" casualty but it's not the real story here. I suspect that a focus on economic analysis will turn out to be the wrong one overall even if it's right on some detail.


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## Sean K (21 September 2021)

Smurf1976 said:


> Playing video games is stretching it though, and pop music is getting a bit weird as a thing for a government to crack down on.




Is this the Afghanistan thread?


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## qldfrog (21 September 2021)

kennas said:


> Is this the Afghanistan thread?



next, they will close music venues, censor SM, add curfews and prevent both domestic and international travels..bloody CCP 
They are really amateurs


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## bsnews (21 September 2021)

The market has know this was going down for some time I really don't understand the overreaction.
CCP will bail then out.
All looks like a lot of market manipulation from my POV US side.


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## Sean K (21 September 2021)

bsnews said:


> The market has know this was going down for some time I really don't understand the overreaction.
> CCP will bail then out.
> All looks like a lot of market manipulation from my POV US side.




So, maybe just an excuse for a decent market correction?


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## divs4ever (21 September 2021)

kennas said:


> So, maybe just an excuse for a decent market correction?



 or a distraction from the US debt ceiling grand-standing and the EU banking issues 

 but yes if it all unravels ( as it is due to ) China and Evergrande would be palatable scapegoats


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## divs4ever (21 September 2021)

remember the West is addicted to low interest rates and QE  ,  God forbid this got labeled as Taper Tantrum 2 just 3 years after the last one


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## basilio (21 September 2021)

ABC analysis of Evergrande situation.  $400Billion in debts across customers, suppliers, employees and investors









						Could a Chinese company collapse trigger another global financial crisis? Here's what the experts say
					

It was once a darling of China's booming property sector, but share markets around the world now watch in horror as Evergrande threatens to sink.




					www.abc.net.au


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## tech/a (21 September 2021)

If the debt---any debt for a sovereign country is* internal* and not external as in owing to anyone other than themselves.

Then they can* print or click away funds required and debt.* That's what is happening now in sovereign countries to finance
the Costs of COVID. The only time it is a killer is when the debt is owed to externals. Why do you think the UK wanted out
of the EU. They didn't want a debt to the EU. You cant do that as a Company or a private individual but if your print your
own money---- So who's really at risk? There wont be any bailing! No Need.


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## bsnews (21 September 2021)

There would have to be some liabilities owing to the West that I am pretty sure CCP will pay up as they can not do without USD just yet.
The internal debt meh!


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## basilio (21 September 2021)

tech/a said:


> If the debt---any debt for a sovereign country is* internal* and not external as in owing to anyone other than themselves.
> 
> Then they can* print or click away funds required and debt.* That's what is happening now in sovereign countries to finance
> the Costs of COVID. The only time it is a killer is when the debt is owed to externals. Why do you think the UK wanted out
> ...




I think that is not fully accurate and IMV too simplistic an analysis.

There are substantial external debt holders.  The simple printing of money  by the Chinese government to bail out Evergrande isn't on the cards.  They will certainly attempt to control the collapse.  From our POV there will almost certainly be a larg contraction in Chinas economy  as a consequence.









						Explainer: How China Evergrande's debt troubles pose a systemic risk
					

China Evergrande Group (3333.HK) has raised fresh warnings of default risks amid late payments to wealth management and trust products.




					www.reuters.com


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## qldfrog (21 September 2021)

tech/a said:


> If the debt---any debt for a sovereign country is* internal* and not external as in owing to anyone other than themselves.
> 
> Then they can* print or click away funds required and debt.* That's what is happening now in sovereign countries to finance
> the Costs of COVID. The only time it is a killer is when the debt is owed to externals. Why do you think the UK wanted out
> ...



Yes China itself is at no risk, it is more the swiss banks, etc which own these Evergrande bonds which are at risk, and countries with overall huge debt to.. China and huge trade deficits:
Europe italy francethe whole block
US at risk if USD loses its refuge status.maybe not yet
And all the minnows 
Turkey here, Argentina there etc
For Australia, just a proper economic crisis i think due to no more china purchase of coal, iron, gas..and so back to agriculture and expresso economy.
The winners? Russia, India, China...
I obviously have no crystal ball so know nothing....


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## divs4ever (21 September 2021)

SOME Evergrande debt is denominated in $US (  i don't see any mention of debt in Euros )

 i suspect China will handle the internal part ( but might not be gentle  about it )

 the question is do we know how much foreign debt ( and derivatives ) is involved here  by the time you get to CDS  you might be talking a trillion dollars worth  rattling around in hedge funds and pension funds 

 it was the derivatives held by AIG that nearly out the global economy in the GFC ( few of the big banks would have had any 'insurance ' , if AIG was let fail )


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## qldfrog (21 September 2021)

bsnews said:


> There would have to be some liabilities owing to the West that I am pretty sure CCP will pay up as they can not do without USD just yet.
> The internal debt meh!



Why would ccp pay the bond to UBS or Blackrock? No way.it is a gigantic FU coming...


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## qldfrog (21 September 2021)

https://www.bloomberg.com/news/arti...top-funds-with-exposure-to-china-s-evergrande
But also european banks, UBS, Blackrock and HSBC


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## tech/a (21 September 2021)

As I said there wont be any bailing out of Evergrande. There will only be Govt rescue if it suits the Govt.
The GFC threatened Stability in the US monetary system and others and as such there were Govt bailouts.

The idea of Sovereign Debt (The Myth) isn't mine 

This is a good Audible listen https://blogs.lse.ac.uk/lsereviewof...h-of-the-peoples-economy-by-stephanie-kelton/


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## divs4ever (21 September 2021)

qldfrog said:


> Why would ccp pay the bond to UBS or Blackrock? No way.it is a gigantic FU coming...



if they and their rivals are exposed  expect a huge amount of derivatives as well 

 and yes i expect  China to raise an index finger to  those insatiable vampires 

 i assume most of their risk is buried in their clients accounts


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## sptrawler (21 September 2021)

tech/a said:


> If the debt---any debt for a sovereign country is* internal* and not external as in owing to anyone other than themselves.
> 
> Then they can* print or click away funds required and debt.* That's what is happening now in sovereign countries to finance
> the Costs of COVID. The only time it is a killer is when the debt is owed to externals. Why do you think the UK wanted out
> ...



Spot on Duck and exactly the reason the 1987 crash affected Australia much more than the GFC.


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## basilio (21 September 2021)

divs4ever said:


> SOME Evergrande debt is denominated in $US (  i don't see any mention of debt in Euros )
> 
> i suspect China will handle the internal part ( but might not be gentle  about it )
> 
> ...



 IMV this is the critical issue with debt exposure. As they say " you only see who's swimming naked when the tide goes out."


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## frugal.rock (21 September 2021)

It would seem that many in Aus think today is a buy the dip moment....😂
I hope that works out for them... however I'm playing it as a sucker rally, rightly or wrongly. (I have bought some AXE and OOO though 🤫)

I think the Fed is due for an announcement about tapering on Wed.
Emergency stimulus payments to US people's (unemployed etc) ended 2 weeks ago, and well guess what? The masses aren't flooding the job markets yet...
interesting times.


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## aus_trader (21 September 2021)

sptrawler said:


> Spot on Duck and exactly the reason the 1987 crash affected Australia much more than the GFC.



So is this China Property Developer worries more like a GFC or 1987 or some news and media BS to scare/panic the markets (i.e. storm in a teacup) that wouldn't affect Australia ?


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## againsthegrain (21 September 2021)

frugal.rock said:


> It would seem that many in Aus think today is a buy the dip moment....😂
> I hope that works out for them... however I'm playing it as a sucker rally, rightly or wrongly. (I have bought some AXE and OOO though 🤫)
> 
> I think the Fed is due for an announcement about tapering on Wed.
> ...




The masses are starting to flood the streets,  aussie construction industry is grinding to a halt, doesn't look like a good times moment


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## tech/a (21 September 2021)

againsthegrain said:


> The masses are starting to flood the streets,  aussie construction industry is grinding to a halt, doesn't look like a good times moment




Not in this town (Adelaide.)


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## aus_trader (21 September 2021)

againsthegrain said:


> The masses are starting to flood the streets,  aussie construction industry is grinding to a halt, doesn't look like a good times moment



Market is resilient though, that's why asked what this could turn into or nothing to worry here...




No one can predict with 100% accuracy but good to listen to both sides of the argument and we are free to express our opinion here.


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## tech/a (21 September 2021)

Boooing Boooing Boooing


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## sptrawler (21 September 2021)

aus_trader said:


> So is this China Property Developer worries more like a GFC or 1987 or some news and media BS to scare/panic the markets (i.e. storm in a teacup) that wouldn't affect Australia ?



With regard Australia it wont be a 1987 event, from memory some of our banks nearly went under, due to the overseas borrowings being called in.
I would think the only way it will affect Australia, would be on the demand side, that is raw materials.
As far as I know the Chinese aren't undertaking many, if any, major construction builds in Australia, or stumping up the funding for any. I could be wrong, but I would have expected it to be all over the news by now, after all it would bad news, which is always good for circulation.
With raw materials it could have a dramatic effect on volumes, as a major recession in China, would have a huge effect on demand.


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## qldfrog (21 September 2021)

Just to be specific, dday is actually Thursday where Evergrande has massive..probably defaulted.. payment...
Until it is just a btd or be scared moment.
We are so overdue a correction..but thos is what it is.if it crashes, i am ready with just the 2 weekly system exposure..still hurt but hey..and if it bounces well the weekly gains will make me happy


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## tech/a (21 September 2021)

sptrawler said:


> With regard Australia it wont be a 1987 event, from memory some of our banks nearly went under, due to the overseas borrowings being called in.
> I would think the only way it will affect Australia, would be on the demand side, that is raw materials.
> As far as I know the Chinese aren't undertaking many, if any, major construction builds in Australia, or stumping up the funding for any. I could be wrong, but I would have expected it to be all over the news by now, after all it would bad news, which is always good for circulation.
> With raw materials it could have a dramatic effect on volumes, as a major recession in China, would have a huge effect on demand.




The word was 2 mths ago that China was to place a 30% export tax on steel so as to squash demand as they had more internally than they could handle. So we bought lots of steel to meet domestic demand and in anticipation.
2 mths later and no 30% tariff but a supply shortage more to do with Boxes (containers) and ship space than with under availability.

Very similar with Timber/plastic/Computer chips/Vehicals and earthmoving equipment.


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## tech/a (21 September 2021)

tech/a said:


> Boooing Boooing Boooing
> 
> View attachment 130566




*That Cat is pretty flat!*


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## Sean K (21 September 2021)

tech/a said:


> *That Cat is pretty flat!*




Maybe just having a nap?


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## divs4ever (21 September 2021)

aus_trader said:


> So is this China Property Developer worries more like a GFC or 1987 or some news and media BS to scare/panic the markets (i.e. storm in a teacup) that wouldn't affect Australia ?



Evergrande itself  , probably not 

the reminder of the dangers of 'off-the-plan' buying  for both buyers and lenders  ,  well that might be completely different , there must be some other fragile building companies that are smaller versions of Evergrande , still out there


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## Smurf1976 (21 September 2021)

kennas said:


> Is this the Afghanistan thread?



Nah but for clarity, I'm interpreting the situation going forward as being far more about government and politics than the company itself.


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## Sharkman (21 September 2021)

Smurf1976 said:


> Playing video games is stretching it though, and pop music is getting a bit weird as a thing for a government to crack down on.




i'm not the least bit surprised. it's basically part of the culture. similar stuff has happened, is happening, and will happen to millions upon millions of Chinese kids everywhere (not just in China but immigrants in Aust, US etc. as well) - unsatisfactory school results means no video games and no entertainment. i should know... i was one, and that is exactly what happened to me and most of my Asian schoolmates growing up in the 90s. marks not good enough = video games taken away and locked up until academic performance improved. i wasn't really into music that much, but the kids who were had their CDs (remember those?) taken away too.

this is essentially the adult equivalent of that - i'd wager it's at least partially a response to the growing "laying flat" movement, where people have essentially given up on pursuing "success" and the associated competitive life pressures, and are instead opting to pursue happiness in minimalism. the authorities probably view it as people "lazing around and doing the bare minimum" and they don't like it as it doesn't gel with the whole growth and prosperity vision.

so just like Asian parents taking away their kids' entertainment and forcing them to do schoolwork for hours and hours every day, Asian authorities crack down on it as a heavy handed way of pushing adults towards what they would regard as more productive activities. we might see it as harmless entertainment (well not so harmless in the case of casinos) but the authorities over there probably see it as very much a harmful impediment to their vision, and hence crack down on it. i've seen news articles claiming that the government is even cracking down on social websites discussing the laying flat movement, so it would seem that they are aware of it, and this is the next step in suppressing it.


----------



## Knobby22 (21 September 2021)

tech/a said:


> Not in this town (Adelaide.)



A lot of them aren't even construction workers. There was a clever guy selling high viz to the Melbourne entries to Dumb and Dumber.

My daughter saw a video of guys  sniffing Ketamine before joining the riot.


----------



## tech/a (21 September 2021)

Have mates over there with businesses in the construction industry and concur with what your seeing.
2000 wankers stuffing up 200000 genuine workmen and women.


----------



## tech/a (21 September 2021)

DJIA futures up +300 at the moment so that cat may have some life in it yet!


----------



## over9k (21 September 2021)

tech/a said:


> Have mates over there with businesses in the construction industry and concur with what your seeing.
> 2000 wankers stuffing up 200000 genuine workmen and women.



The powers that be used to actually plant troublemakers etc within the union ranks precisely to cause things like this. 

Were they actually legit union guys or were they really working for someone else?


----------



## over9k (21 September 2021)

tech/a said:


> DJIA futures up +300 at the moment so that cat may have some life in it yet!



Last night had a solid rally in the last hour/into the close. This almost always precedes a bounce and futures are now WELL into the green premarket.

It was always today (tonight) that was/is the day of reckoning, not yesterday. If we were deep into the red today then it was armageddon.


----------



## tech/a (21 September 2021)

over9k said:


> The powers that be used to actually plant troublemakers etc within the union ranks precisely to cause things like this.
> 
> Were they actually legit union guys or were they really working for someone else?



Dont know —— there are forces on both sides that will spread news to suit each so who knows!


----------



## basilio (21 September 2021)

Evergrande effect! Chinese property developer Sinic shares tank 87% today, trading halted
					

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 principally engaged in property development and property leasing, according to Reuters.




					economictimes.indiatimes.com


----------



## divs4ever (21 September 2021)

a fair number of Australian listed REITs  run at about 40% gearing  , watch for more capital raising in this sector , that MIGHT be tagged on to new acquisitions ( say buy a $100 million property but raise $200 million ) so read carefully 

 ALSO watch for credit rating changes on the REITs  ( and service companies )

 i am watching to buy extra ACF  but other construction related businesses  could be hit by negative sentiment as  well  ( BKW , CSR , ABC  etc )


----------



## frugal.rock (21 September 2021)

I believe our RBA has issued some sort of warning regarding Evergrande as well.
I guess a dead cat needs to be dropped from lofty heights or into a deep abyss to actually get a bounce... it would really need to reach terminal velocity first. 🙀


----------



## qldfrog (21 September 2021)

tech/a said:


> Have mates over there with businesses in the construction industry and concur with what your seeing.
> 2000 wankers stuffing up 200000 genuine workmen and women.



And propaganda works well i can see.
Gov applying bully school yard tactics: a few of you misbehave so we lock the whole of you..and it works like a charm..the blame is put on these nasty anyvax..obviously, you have to be antivax, not freedom fighter if you think being forced without svientific reason to be used as a guinea pig is legit...anyway as far as i remember, it is not the antivax closing the business construction included now

this country will get what it deserves.
A pity, it could have turned good


----------



## qldfrog (21 September 2021)

qldfrog said:


> And propaganda works well i can see.
> Gov applying bully school yard tactics: a few of you misbehave so we lock the whole of you..and it works like a charm..the blame is put on these nasty anyvax..obviously, you have to be antivax, not freedom fighter if you think being forced without svientific reason to be used as a guinea pig is legit...anyway as far as i remember, it is not the antivax closing the business construction included now
> 
> this country will get what it deserves.
> A pity, it could have turned good



And soon enough, we will see the economic results of being dumb.
Even if the only casualty of Evergrande is IO, it will be costly here


----------



## qldfrog (21 September 2021)

qldfrog said:


> And soon enough, we will see the economic results of being dumb.
> Even if the only casualty of Evergrande is IO, it will be costly here



And a last note, i am not exactly a bull, think the correction is well past due time, but i somehow do not believe this is the big one yet.
Anything planned is usually controlled.there is no surprise so far with Evergrande..any surprise would be a positive like being bailed out or bond interests paid.
We need a black swan to trigger a real crash, something no fed can foresee or has  time to fix.
This is not it..maybe 10pc down but no more.still a btd case imho


----------



## tech/a (21 September 2021)

qldfrog said:


> And propaganda works well i can see.
> Gov applying bully school yard tactics: a few of you misbehave so we lock the whole of you..and it works like a charm..the blame is put on these nasty anyvax..obviously, you have to be antivax, not freedom fighter if you think being forced without svientific reason to be used as a guinea pig is legit...anyway as far as i remember, it is not the antivax closing the business construction included now
> 
> this country will get what it deserves.
> A pity, it could have turned good




Shite—-didnt take long !


----------



## qldfrog (21 September 2021)

tech/a said:


> Shite—-didnt take long !



@tech/a  ..you put the blame for closing construction on the protest , not the gov imposing it? Do you remember your school year? that's the level of mgt we are subject too.
Not especially keen on CFMEU which i consider a thug mafia, just scared that all the basic of propaganda, the us vs them etc seems to be swallowed like gospel even by reasonably intelligent people.


----------



## martaart077 (21 September 2021)

kennas said:


> That is the question isn't it. Is it contained in China. Will they pull a rabbit out of the hat.



The rabbit is Taiwan and
nationalism on the rise. 
Conflict to reset the economy and confirm the status of the leadership


----------



## qldfrog (21 September 2021)

martaart077 said:


> The rabbit is Taiwan and
> nationalism on the rise.
> Conflict to reset the economy and confirm the status of the leadership



And that would be the black swan..waking up with CNN pictures of CCP flag over Taipei with a few burning buildings in the background


----------



## finicky (22 September 2021)

Seems a common-sense rundown. He sees this as likely to not only affect our commodity suppliers but also our r/e values due to Chinese interests liquidating foreign assets to meet domestic obligations. Don't have a view personally.


----------



## qldfrog (22 September 2021)

finicky said:


> Seems a common-sense rundown. He sees this as likely to not only affect our commodity suppliers but also our r/e values due to Chinese interests liquidating foreign assets to meet domestic obligations. Don't have a view personally.




I like common sense,seems rare and missing lately in our country. 
When you take a step back.. Evergrande down means construction sector down ,means the key user of steel down . All the pig iron for these ghost cities..so IO down but not only steel but copper for cabling,coal for cement factories.
For the first time in ages,we could see a slow down in construction in ChinaAnd this is bad news at the very least for our miners, especially domestic ones with our major export partner down.
That's the positive scenario with no contagion.
There is no jab untested or not, against the economic China cold. If they sneeze,our economic is sick,but our stock market?


----------



## Smurf1976 (22 September 2021)

qldfrog said:


> I like common sense,seems rare and missing lately in our country.
> When you take a step back.. Evergrande down means construction sector down ,means the key user of steel down .



Steel - production of that uses lots of iron ore and the price of that has fallen in a heap. 

Making steel is also the largest use by far of coking coal. Coal being one of Australia's largest exports. Price seems to have held up thus far but there's a disconnect there - if steel production is to fall, and iron ore price is falling in a heap, then unless there's a disruption to coking coal supply (?) that logically also should see price decline sooner or later. If you're not making steel with it then you don't need the coking coal. Steel isn't the only use of it but it's the big one.

Which brings me to question the impact of this on the AUD going forward?


----------



## qldfrog (22 September 2021)

Smurf1976 said:


> Steel - production of that uses lots of iron ore and the price of that has fallen in a heap.
> 
> Making steel is also the largest use by far of coking coal. Coal being one of Australia's largest exports. Price seems to have held up thus far but there's a disconnect there - if steel production is to fall, and iron ore price is falling in a heap, then unless there's a disruption to coking coal supply (?) that logically also should see price decline sooner or later. If you're not making steel with it then you don't need the coking coal. Steel isn't the only use of it but it's the big one.
> 
> Which brings me to question the impact of this on the AUD going forward?



On AUD, i have been wrong too often.
We should see a fall of AUD vs USD
But internationally,aud is seen as gold (producer) linked and as such a refuge currency.
So this old belief is protecting the AUD somewhat.
There is also the fact the USD/DXY is on a long down trend.so will lessen the aud vs usd fall.
I personally have moved obviously PM but also yuan and Russian market. Market as I could not find currency etf


----------



## qldfrog (22 September 2021)

https://www.abc.net.au/news/2021-09...ould-be-very-bad-news-for-australia/100480268


----------



## qldfrog (22 September 2021)

qldfrog said:


> https://www.abc.net.au/news/2021-09...ould-be-very-bad-news-for-australia/100480268



Not too bad article coming from their ABC 
Managed to not mention lgbt or climate warming/ extremist far right anti jab...
I noted BNP and RBC as exposed..these are added to the list


----------



## basilio (22 September 2021)

Analysis on ABC about Evergrande and how it might or might not be managed  without bringing the house down.

Lot of eggs being juggled at the moment 









						Evergrande's collapse could be very bad news for Australia and the world. Here's why
					

The financial woes of a developer half a world away wouldn't seem to have much direct impact on Australians' daily lives, but Evergrande's looming default is already sending shock waves Down Under and around the world of finance, writes David Taylor.




					www.abc.net.au


----------



## over9k (22 September 2021)

Smurf1976 said:


> Steel - production of that uses lots of iron ore and the price of that has fallen in a heap.
> 
> Making steel is also the largest use by far of coking coal. Coal being one of Australia's largest exports. Price seems to have held up thus far but there's a disconnect there - if steel production is to fall, and iron ore price is falling in a heap, then unless there's a disruption to coking coal supply (?) that logically also should see price decline sooner or later. If you're not making steel with it then you don't need the coking coal. Steel isn't the only use of it but it's the big one.
> 
> Which brings me to question the impact of this on the AUD going forward?



AU is boned. I moved 90% of my capital into ADR's/USD denominated assets quite some time ago. 

The pain this country is soon going to find itself in is not news to some. I made a series of posts over the FMG thread explaining what's gone on.


----------



## qldfrog (23 September 2021)

So all green in the NYSE so far oil,market,pm..but USD does not fall much.
 Still some fear here.probably because today in Australia is DDay with Evergrande..
We may know tonight what wctually happen to these billions..
A bit scared running with systematic systems today. But hey ....stats are better than my judgement


----------



## Smurf1976 (23 September 2021)

qldfrog said:


> USD does not fall much.



The movement in currencies, or more to the point the lack of it, is the one that has me intrigued as to what's going on.

Anyone looking only at exchange rates could be excused for thinking Evergrande was just some inconsequential local small business that hadn't paid a few sub-contractors and owed a few $ to whatever the Chinese equivalent of Bunnings is. Etc. Iron ore loses ~half it's value and the AUD stays roughly unchanged - I'm missing something here?


----------



## over9k (23 September 2021)

Smurf1976 said:


> The movement in currencies, or more to the point the lack of it, is the one that has me intrigued as to what's going on.
> 
> Anyone looking only at exchange rates could be excused for thinking Evergrande was just some inconsequential local small business that hadn't paid a few sub-contractors and owed a few $ to whatever the Chinese equivalent of Bunnings is. Etc. Iron ore loses ~half it's value and the AUD stays roughly unchanged - I'm missing something here?



I'm perplexed too but the U.S markets are doing quite well and the AUD follows them quite closely.


----------



## qldfrog (23 September 2021)

Smurf1976 said:


> The movement in currencies, or more to the point the lack of it, is the one that has me intrigued as to what's going on.
> 
> Anyone looking only at exchange rates could be excused for thinking Evergrande was just some inconsequential local small business that hadn't paid a few sub-contractors and owed a few $ to whatever the Chinese equivalent of Bunnings is. Etc. Iron ore loses ~half it's value and the AUD stays roughly unchanged - I'm missing something here?



And IO fall is after drastic slashing of coal export: sure coal price is still high, but China is locking us out.
As for international students..none and we are still locked out of the world economy with domestric still hit by lockdown.
The AUD should be in free fall..not that i want that..but basic economy..
Do we have gov intervention to support AUD? I do not think so.
Got a rideon mower yesterday.
5k new 5y ago to the month nearly 8k for same model now..
Took one k in the last 2m..supposedly extra high shipping costs.. which are high indeed..but who cares the reasons.it is very high inflation coming..so the purchase now


----------



## Knobby22 (23 September 2021)

Very good article in the Age today, which I get delivered,  from their North East Asian correspondent Eryk Bagshaw. Worth reading but I am not going to provide a link.

The basic conclusion is that the Chinese Government will use their significant powers of persuasion over smaller firms, investors and homeowners  to accept a compromise out of a sense of national duty. 

You may say well that is typical but I would argue the USA Chapter 13 bankruptcy law is similar where creditors are forced to take a haircut while the firm is allowed to continue.


----------



## waterbottle (23 September 2021)

I think the error arises from assuming CCP will behave anything like Western institutions. They really do have total control.


----------



## qldfrog (23 September 2021)

Knobby22 said:


> Very good article in the Age today, which I get delivered,  from their North East Asian correspondent Eryk Bagshaw. Worth reading but I am not going to provide a link.
> 
> The basic conclusion is that the Chinese Government will use their significant powers of persuasion over smaller firms, investors and homeowners  to accept a compromise out of a sense of national duty.
> 
> You may say well that is typical but I would argue the USA Chapter 13 bankruptcy law is similar where creditors are forced to take a haircut while the firm is allowed to continue.



https://www.theage.com.au/world/asia/what-caused-the-evergrande-crisis-20210922-p58tru.html
for anyone interested


----------



## divs4ever (23 September 2021)

there is probably something going on

i suspect there are some bailouts happening in the West  , although most of those toxic CDOs  from the GFC disappeared ( probably via shady book-work

 and let's face it the Basel III stress tests outside of Australia  have been a joke  ( and given some of our bankers' record in Australia might have been window dressing as well )


----------



## over9k (24 September 2021)

Here's what the bonds are being sold for in cents on the dollar just for everyone's info:


----------



## divs4ever (24 September 2021)

the main problem in the West  will be a reminder of how fragile the construction industry can be , the US has timber price spikes  and supply disruptions

  and the Melbourne ( and i assume  Victoria in general ) situation  in Australia  , will have buyers and financiers remember the bad times in the past  ,

 opportunity for the brave  , but would you jump in


----------



## aus_trader (24 September 2021)

US timber prices have steadily fallen in the recent months after peaking at ridiculous levels in above US$1600 in may.

"Sell in may and go away" _commodity version_ ©️  ?




Anyway the hysteria over US real estate prices due to timber shortages have also subsided as a result.

I remember commentators and news articles at the time trying so hard to run scare mongering tactics fueling the US Real Estate bubble predicting inflation was going to run rampant and supply disruptions was going to cause Lumber to double, triple, quadruple and so forth.

*In the case of lumber* I guess FED'ers were right when they didn't raise interest rates and said they believed the inflation that was seen was transitory or temporary from their analysis. I am not trying to predict inflation in general which is made up of so many factors including commodity price increases, just looking at lumber prices in isolation in this case.


----------



## basilio (24 September 2021)

‘Eerie silence’ as Evergrande misses payment deadline
					

As debt-laden Chinese property giant enters 30-day grace period, officials look to limit unrest and job losses




					www.theguardian.com


----------



## qldfrog (30 September 2021)

nice bet once you dare.for the side effects:
https://finance.yahoo.com/news/funds-holding-evergrande-distressed-debt-203647011.html


----------



## waterbottle (30 September 2021)

qldfrog said:


> View attachment 130845
> 
> nice bet once you dare.for the side effects:
> https://finance.yahoo.com/news/funds-holding-evergrande-distressed-debt-203647011.html



Side effects include palpitations, chest pain, insomnia, night sweats....


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## e_abrams (1 October 2021)

aus_trader said:


> US timber prices have steadily fallen in the recent months after peaking at ridiculous levels in above US$1600 in may.
> 
> "Sell in may and go away" _commodity version_ ©️  ?
> 
> ...



What was the reason for the tinder shortage, actually? Was it the pandemic?


----------



## qldfrog (1 October 2021)

e_abrams said:


> What was the reason for the tinder shortage, actually? Was it the pandemic?



Not a shortage as such: trees are still there,do not go wasted if left in forest for an extra year but disruption of the supply chain due to pandemic measures.. remember,the virus did not kill tress, stop trucks and timber fellers, the lockdown and stop work mandate did.
Add to this the shipping containers pricing going exponential and movement of high volume low value items..like grain, timbers, raw materials is last in priority list for cargo load..
Timber is not a long term worry, grain more serious..as it rots, as are perishable goods..do not expect to see aussie mangoes in China this year...
My view and how even raw product sich as Ag goods are affected


----------



## qldfrog (1 October 2021)

All part of the Reset with food shortages on the line if you have a bit of conspiracy..or unfortunate well matched coincidences😊


----------



## aus_trader (1 October 2021)

e_abrams said:


> What was the reason for the tinder shortage, actually? Was it the pandemic?



@qldfrog has given a great explanation, better than I could.

So in summary it was the supply chain disruption that caused the lumbar prices to skyrocket temporarily. It was a shorter term price anomaly, however other supply chain disruptions will take longer to play out... One I can think of the top of my head is the semiconductor chip supply chain disruption.


----------



## divs4ever (1 October 2021)

from memory predominantly forest fires , which SOME were allegedly started by activists , but a secondary factor was mills stock-piling ( allegedly  hoarding ) for selected customers  but other factors were involved  , but without the fires ( supply disruptions ) possibly nothing spectacular  , just another hindrance


----------



## e_abrams (2 October 2021)

Thank you both for explaining that! I only heard about it recently, I had not paid much attention to lumber prices before that, but I was very surprised when I did hear about it.


----------



## Smurf1976 (2 October 2021)

e_abrams said:


> What was the reason for the *tinder* shortage



Tinder shortage?   

That's a rather different sort of problem..... 

Seriously, there's so much that seems to be going on in China at present that I think the one certainty to all this is that any analysis will be missing some bits.

Banning cryptocurrencies, video games, Evergrande, power shortages, the various diplomatic issues.....

My point there isn't a political one as such, just noting that there seems to be rather a lot going on all at once which leads me to assume there's probably quite a bit more to come that isn't yet apparent. "Expect surprises".


----------



## e_abrams (2 October 2021)

I meant "tiMber shortage". Ah, what a typo, sorry about that. 😅

That said, considering the disproportionate amount of men to women in their population currenty, it turns out the typo was spot on anyway. 🤣


----------



## qldfrog (3 October 2021)

e_abrams said:


> I meant "tiMber shortage". Ah, what a typo, sorry about that. 😅
> 
> That said, considering the disproportionate amount of men to women in their population currenty, it turns out the typo was spot on anyway. 🤣



Thanksfully, numbers self balance due to Grinder
Would be interesting to know the covid economic effect on these types of apps with restrictions..but not affected yet by Evergrande


----------



## Dona Ferentes (3 October 2021)

Growth in China in the early 2000s was unlike anything in economic history. As many as 250 million people moved from subsistence farming to working in cities with far better lifestyles in a few decades. But they needed housing:

From a 2019 article about the superblock construction mania, found in  https://radiichina.com/building-china-rise-...the-superblock/

_Building China; Rise of the Superblock _



> Chinese officials in the 1990s were under pressure to expand the housing supply, and fast. The most expedient way of accomplishing this was to parcel out enormous plots of land to private developers, who quickly filled them with 30 story residential towers. The city planning authorities, meanwhile, obligingly built eight lane highways between the blocks to service inevitable car traffic.





> One reason for this… is the symbolic importance of cars and highways. Chinese officials obsessed with projecting a _modern, world class_ facade would of course seek to emulate the American city model, no matter how badly that model has been discredited. For ordinary Chinese people, too, car ownership was a crucial indicator of socioeconomic status.





> But an even more important reason behind the continued insistence on superblock planning is the reliance of Chinese city governments on land lease revenue. Since the _tax sharing _reforms of 1994, cities have been obliged to fork over an enormous percentage of their tax revenue to the central government. In order to generate enough revenue to cover social services and other costs, cities have come to rely heavily on China's _*land lease *_mechanism that allows the city to rent parcels of land to private developers for a period of 70 years.





> Superblock planning therefore was irresistible to Chinese officials, who could quickly expand the housing supply and generate a massive amount of tax revenue in the process. Although it is changing, it is still the case that Chinese cities generate an astonishing percentage of their revenue from land leases ... more than half by most estimates.


----------



## e_abrams (3 October 2021)

Clearly that model is not quite as practical anymore, if considering their current problems. I wonder if the government will bail Evergrande out.


----------



## greggles (4 October 2021)

Evergrande shares have been suspended from trading in Hong Kong after bondholders said the company has missed interest payments.









						Evergrande: Company set to update market on 'major transaction'
					

It comes as a China media report says a rival firm is set to buy a big stake in an Evergrande unit.



					www.bbc.com
				




Looks like the asset fire sale isn't managing to generate enough cash to get Evergrande out of trouble. Can anyone else hear the air getting let out of China's property market?


----------



## aus_trader (4 October 2021)

greggles said:


> Evergrande shares have been suspended from trading in Hong Kong after bondholders said the company has missed interest payments.
> 
> 
> 
> ...



Looks like it's badly in need of a CCP bailout if it's to continue the business.


----------



## over9k (4 October 2021)

Share trading has just been suspended. Lol. 

This is not going to get better.


----------



## againsthegrain (4 October 2021)

over9k said:


> Share trading has just been suspended. Lol.
> 
> This is not going to get better.




Yeah where is that guy who was thinking to "buy the dip" ... hopefully he didn't


----------



## aus_trader (4 October 2021)

againsthegrain said:


> Yeah where is that guy who was thinking to "buy the dip" ... hopefully he didn't



Agree, even buying the last little rally would look like a mistake now...


----------



## moXJO (5 October 2021)

Distressed developer China Evergrande will sell a half-stake in its property management unit to Hopson Development for more than $5 billion, Chinese media said on Monday, after both Evergrande and Hopson requested trading halts ahead of a major transaction.

https://m.economictimes.com/news/in...&utm_campaign=cppst&__twitter_impression=true

Bit of FUD at the moment. I don't see the ccp letting this get out of control. At most they might want to attempt to tank foreign markets.


----------



## over9k (5 October 2021)

moXJO said:


> Distressed developer China Evergrande will sell a half-stake in its property management unit to Hopson Development for more than $5 billion, Chinese media said on Monday, after both Evergrande and Hopson requested trading halts ahead of a major transaction.
> 
> https://m.economictimes.com/news/in...&utm_campaign=cppst&__twitter_impression=true
> 
> Bit of FUD at the moment. I don't see the ccp letting this get out of control. At most they might want to attempt to tank foreign markets.



Problem is, they know that the more bailouts they give, the more reckless the companies will be. 

Bit of a jam they're in, isn't it?


----------



## e_abrams (5 October 2021)

This is an absolute mess. I'm just baffled that they let it get this bad before doing anything about it.


----------



## over9k (5 October 2021)

The virus has played merry hell with stuff like this. Have you seen the housing markets in the west lately?

This wouldn't have been nearly as bad if not for the virus (and more to the point, the response to the virus).


The same piper is going to have to be paid in the west too, it just appears that someone else will be the first domino to fall.


----------



## aus_trader (5 October 2021)

over9k said:


> Problem is, they know that the more bailouts they give, the more reckless the companies will be.
> 
> Bit of a jam they're in, isn't it?



Very insightful, would China follow the US ?

It's the case with the US zombie companies doing whatever they like (since they found the holy grail of the sin pardon i.e. rescue) taking on mountains of debt never ever worrying about paying any of it back. Not a care or a worry in the world when everything is backstopped and/or bailed out by the FED.


----------



## moXJO (5 October 2021)

over9k said:


> Problem is, they know that the more bailouts they give, the more reckless the companies will be.
> 
> Bit of a jam they're in, isn't it?



China just disappears some CEOs or takes all their and their families money.


----------



## qldfrog (5 October 2021)

moXJO said:


> China just disappears some CEOs or takes all their and their families money.



or? and  with a bullet in the head if you become too much of a trouble


----------



## moXJO (5 October 2021)

qldfrog said:


> or? and  with a bullet in the head if you become too much of a trouble



Yeah they don't mess around.


----------



## e_abrams (6 October 2021)

That won't fix the company's debt, however. Unless the state just declares it null and void. Who knows what they'd do. 🤷‍♂️


----------



## Smurf1976 (6 October 2021)

It seems Evergrande might not be the only one.



> A mid-sized Chinese real estate developer has failed to make a $282 million payment due to bondholders












						Fantasia Holdings is not the size of Evergrande Group but it has missed a huge payment and asked for a halt to trading
					

Chinese real estate developer Fantasia Holdings Group fails to make a $280 million payment due to bondholders, adding to worries over the country's property sector as Evergrande teeters on the brink of collapse.




					www.abc.net.au
				




I've nothing much to add other than to note that what I call "mouse theory" is probably applicable here.

Mouse theory = if you've seen one, be assured there's plenty more not far away.


----------



## over9k (6 October 2021)

e_abrams said:


> That won't fix the company's debt, however. Unless the state just declares it null and void. Who knows what they'd do. 🤷‍♂️



State takeover/nationalisation of the company. Creditors get paid, directors get gulag'd.


----------



## over9k (6 October 2021)

Here's the next domino:


----------



## aus_trader (6 October 2021)

e_abrams said:


> That won't fix the company's debt, however. Unless the state just declares it null and void. Who knows what they'd do. 🤷‍♂️



I've also read in various sources that China is more likely to think of it's national interest and if there is a bailout it'll be more like the nationalisation of the company and assets (unbuilt or partly built apartments) that @over9k mentioned.

It's possible, but I fear only the local creditors and apartment depositors are likely beneficiaries:

Local creditors (Chinese state owned banks for e.g.) will get all or some (could be a haircut) of their money back
The Chinese citizens who are about to jump off the apartment towers fearing they've lost their life savings will be re-assured that their investment will be saved via their apartment built to completion.
However the overseas creditors may lose out in such a deal, so there could be some write-downs outside of China e.g. in Global funds etc. If it's Evergrande write-down only, the funds may be able to save their balance sheet. But what if there are more mice in the field as per @Smurf1976's comment ?


----------



## over9k (6 October 2021)

Yeah, when lehmann brothers went and the rest of the hedge funds were looking like then falling like domino's they were seriously considering getting the retail banks like JPM etc to absorb them but then realised that would essentially have the retail banking sector absorb the entire investment bank/hedge fund sector. It would have saved the investment banks but at the cost of creating absolute leviathans that controlled both the entire retail sector as well as investment banking as well. 

Nationalisation was politically impossible/absolute anathema (because government control/ownership of anything would be communism) and actually sending the scumbags to jail etc even more so, so the only alternative was to literally give them bailouts (the money they lost) that they then paid themselves bonuses with.


So I'm actually all for china's approach to this sort of thing.


----------



## greggles (6 October 2021)

Smurf1976 said:


> It seems Evergrande might not be the only one.
> 
> 
> 
> ...




These sorts of things do tend to have a domino effect. As confidence in the sector deteriorates, real estate prices will decline as demand falters.  This will have a flow on effect to other troubled Chinese property developers. One by one they will collapse until only the strong survive. The problem is, we can never know how far the rot has penetrated and how many companies will collapse before it bottoms out. By then, global markets may be in a tailspin.


----------



## sptrawler (6 October 2021)

aus_trader said:


> I've also read in various sources that China is more likely to think of it's national interest and if there is a bailout it'll be more like the nationalisation of the company and assets (unbuilt or partly built apartments) that @over9k mentioned.
> 
> It's possible, but I fear only the local creditors and apartment depositors are likely beneficiaries:
> 
> ...



Now what is the Chinese Government going to do with all this stranded property?









						China to move 100 million farmers to cities in urbanisation plan
					

According to a government plan published last year, China aims to raise the number of registered urban residents to around 45 per cent by 2020.




					economictimes.indiatimes.com


----------



## over9k (6 October 2021)




----------



## moXJO (6 October 2021)

I'd be looking to the west to see what might go under. Got a feeling China might see a weakness somewhere.


----------



## over9k (6 October 2021)

Nahhhhh... 


What tipped you off?


----------



## qldfrog (6 October 2021)

sptrawler said:


> Now what is the Chinese Government going to do with all this stranded property?
> 
> 
> 
> ...



3y ago, by night, most of the high rise residential buildings were lightless..not occupied.. and same for offices..huge overshot..before covid..so doubt it has been filled


----------



## sptrawler (6 October 2021)

qldfrog said:


> 3y ago, by night, most of the high rise residential buildings were lightless..not occupied.. and same for offices..huge overshot..before covid..so doubt it has been filled



So all of a sudden the companies that were supported to build them, have fallen over, surprise surprise, lucky the Gov will be there to help mop up. 
That's the way to get social housing sorted.


----------



## Smurf1976 (6 October 2021)

qldfrog said:


> 3y ago, by night, most of the high rise residential buildings were lightless..not occupied..



An opportunity wasted.

Some artwork of a sort could have been created by opening the blinds on selected windows and turning the lights on in that room. When viewed from a distance it would create an image of a sort.

Seriously, if they were empty 3 years ago and they've kept building in the meantime then how many are empty now? Must be a huge number.

Worth watching this and note the date - it's presumably even more now?


----------



## qldfrog (6 October 2021)

Smurf1976 said:


> An opportunity wasted.
> 
> Some artwork of a sort could have been created by opening the blinds on selected windows and turning the lights on in that room. When viewed from a distance it would create an image of a sort.
> 
> ...




Most office buildings in shenzhen had inbuilt leds on the windows and were giant screens, luckily not too much residential ones .as you still want to sleep


----------



## qldfrog (6 October 2021)

qldfrog said:


> Most office buildings in shenzhen had inbuilt leds on the windows and were giant screens, luckily not too much residential ones .as you still want to sleep



I wanted to add pictures/video but not on phone anymore


----------



## divs4ever (6 October 2021)

selling off the plan is a very common model for the construction industry  ( in the developed world ) and the  risks now being discovered  ( by some ) have always existed with this business model 

the survival rate across the industry  will depend on each companies debt obligations and their ability to service them 

 while everyone is watching China , don't forget Australia , US , US , and EU adore this business model as well  and the same banks will be lending to all of them  .. and don't forget also those CDS bets behind the scenes as well


----------



## qldfrog (6 October 2021)

qldfrog said:


> I wanted to add pictures/video but not on phone anymore



a bit of entertainment: please enjoy
	

		
			
		

		
	






or 
	

		
			
		

		
	

View attachment 1530321806032.mp4

Look at all the Australian and Chinese coal burnt for that; 
At the very least, Evergrande via the UBS and other western groups will have created cute light  shows...
These billions did not go in smoke but in lights


----------



## Smurf1976 (7 October 2021)

qldfrog said:


> At the very least, Evergrande via the UBS and other western groups will have created cute light shows...
> These billions did not go in smoke but in lights



Nice video - only problem is I wasn't expecting sound, had the speakers turned up, and the sudden music scared the proverbial out of the cat....


----------



## over9k (7 October 2021)

It wouldn't be the first time someone around here had scared some pussy off. 




(Ok I'll see myself out)


----------



## over9k (7 October 2021)

Jokes aside, even energy & banks are now deep into the red tonight. Everyone are in full on freak-out mode. 

A good 2-3 weeks too late IMO, but they are.


----------



## aus_trader (7 October 2021)

over9k said:


> Jokes aside, even energy & banks are now deep into the red tonight. Everyone are in full on freak-out mode.
> 
> A good 2-3 weeks too late IMO, but they are.



Are we talking US stocks or China stocks ?


----------



## over9k (7 October 2021)

aus_trader said:


> Are we talking US stocks or China stocks ?



U.S. China already plummeted early today. You see my post about the hang seng tech index hitting a new record low?


----------



## aus_trader (7 October 2021)

over9k said:


> U.S. China already plummeted early today. You see my post about the hang seng tech index hitting a new record low?



Yes I read that comment.

So looks like more red on the asx tomorrow... 

I sold a couple of stocks in the speculative portfolio. At this rate there might be more casualties...


----------



## moXJO (7 October 2021)

over9k said:


> Nahhhhh...
> 
> 
> What tipped you off?



Hey I'm still trying to decipher if it US or China getting the upper hand.

On another note what are you thinking of buying come the crazed sell off?


----------



## waterbottle (7 October 2021)

RBNZ now raising interest rates. 

Energy crisis + rampant speculation would be an excellent pretext for raising rates...


----------



## aus_trader (7 October 2021)

waterbottle said:


> RBNZ now raising interest rates.
> 
> Energy crisis + rampant speculation would be an excellent pretext for raising rates...



I think NZ might become the leader when it comes to heading the fiscal world in the right direction.

Wouldn't be at all surprised if other countries follow suit. Just too much easy-money borrowed near 0% rates fueling a lot of mal-investments that probably needs cleansing before the next bull market.


----------



## againsthegrain (7 October 2021)

aus_trader said:


> I think NZ might become the leader when it comes to heading the fiscal world in the right direction.
> 
> Wouldn't be at all surprised if other countries follow suit. Just too much easy-money borrowed near 0% rates fueling a lot of mal-investments that probably needs cleansing before the next bull market.




slowly seeping into Europe too



> The National Bank of Poland raised the reference rate to 0.5% from 0.1%. Wednesday's decision came as a surprise. Many experts had expected that interest rates wouldn't go up until next year because many of the reasons for the rising inflation are related to temporary shocks beyond the control of the central bank


----------



## over9k (7 October 2021)

moXJO said:


> Hey I'm still trying to decipher if it US or China getting the upper hand.
> 
> On another note what are you thinking of buying come the crazed sell off?



USA/mexico/india, but healthcare's a biggy. Lots of boomers in need of a lot of pills soon.


----------



## divs4ever (7 October 2021)

am preferring India and Mexico  , but both are difficult to get exposure to (  and in depth research  is hard as well )

but remember both are still higher risk , so you need higher rewards to go with the risk  , but keep an eye of Brazil  maybe recent events might result in opportunities


----------



## over9k (7 October 2021)

Yeah it's political instability that has me worried with brazil.


----------



## aus_trader (7 October 2021)

over9k said:


> USA/mexico/india, but healthcare's a biggy. Lots of boomers in need of a lot of pills soon.



Any Mexican / Brazilian ETF's or stocks in our local market ?

Local asx listed ETF (code: IIND) will give some Indian exposure.


----------



## divs4ever (7 October 2021)

one might argue that with the pressure placed on Modi  is immense as well  in a nation of competing needs  

 how would India do without Modi  balancing it all out ( international  and national pressures )

 BUT there is plenty of room for improvement ( in both India and Brazil ) and thus opportunity if you can seize the correct options ( it might be pipelines , tech fab companies , or just farm machinery  manufacture )


----------



## over9k (7 October 2021)

aus_trader said:


> Any Mexican / Brazilian ETF's or stocks in our local market ?
> 
> Local asx listed ETF (code: IIND) will give some Indian exposure.



Doubtful. Check betashares. Otherwise it's U.S listed only. 

BRZU, MEXX, INDL for the true degenerates


----------



## divs4ever (7 October 2021)

aus_trader said:


> Any Mexican / Brazilian ETF's or stocks in our local market ?
> 
> Local asx listed ETF (code: IIND) will give some Indian exposure.



 for India exposure  i hold ASIA ( 'free-carried' ) and EAI neither India specific but the best i could find at the time ( ASIA bought at the end of 2018 ) ( EAI bought   October 2018 and topped up in March 2020 )

 IIND and NDIA  are on the watch list  IF we have a big global dip ( or a ' China crisis ' )

 Brazil and Mexico  no i haven't spotted  anything specific enough yet 

 i have held IEM in the past  but lost patience with it selling in 2014 ( it has risen more than $20 since  i exited )


----------



## qldfrog (7 October 2021)

aus_trader said:


> Any Mexican / Brazilian ETF's or stocks in our local market ?
> 
> Local asx listed ETF (code: IIND) will give some Indian exposure.



using last of these: IIND.recent exposure so not a long experience yet


----------



## basilio (8 October 2021)

The Reserve Bank has concerns about the potential impact of Evergrandes collapse on the Chinese economy.  
I wonder how much of the demand for  the scores of high rise apartments Australia's  is going to be affected. 









						An Evergrande collapse is 'likely' without government support, but a bailout has its own problems for China, RBA warns
					

There are fresh questions about the health of the Chinese property sector and what that means for countries — like Australia — that are heavily dependent on robust Chinese economic growth, writes David Taylor.




					www.abc.net.au


----------



## aus_trader (12 October 2021)

Some worries for bond holders...





__





						Chinese property crisis worsens as firm asks to delay bond's maturity
					





					www.msn.com


----------



## qldfrog (12 October 2021)

qldfrog said:


> using last of these: IIND.recent exposure so not a long experience yet



Out..do not think india will be safe.will get back in after crash


----------



## aus_trader (12 October 2021)

qldfrog said:


> Out..do not think india will be safe.will get back in after crash



Interesting @qldfrog...

Do you think the Eastern worries will hit other emerging markets including India ?


----------



## over9k (12 October 2021)

India & china don't like each other. Whatever gets KO'd in china would likely be quite good for india. 

It's the flow on effects (contagion) to be worried about. China effecting a country that india DOES need/want for example, that kind of thing.


----------



## aus_trader (12 October 2021)

over9k said:


> India & china don't like each other. Whatever gets KO'd in china would likely be quite good for india.
> 
> It's the flow on effects (contagion) to be worried about. China effecting a country that india DOES need/want for example, that kind of thing.



I can't really provide any historical backing unfortunately.

India's top 50 (Nifty50) index for example only goes back to 2009. It would have been very enlightening to see how it would have behaved in the Asian financial crisis in the 1997 period...


----------



## qldfrog (12 October 2021)

aus_trader said:


> Interesting @qldfrog...
> 
> Do you think the Eastern worries will hit other emerging markets including India ?



An uninformed view:
India is still very poor, does not have the power China has on the west.
If china and the west sneeze, india will pay dearly.i also expect it to be smashed on the next crash..just a matter of time.not worth the rest.back in cash pm..and after a moderate loss.
I will keep pm, yuan and russia exposure the rest will have very tight SL


----------



## over9k (12 October 2021)

An awful lot has changed in both countries since then though. Both are different countries compared to a generation ago.


----------



## Smurf1976 (13 October 2021)

over9k said:


> India & china don't like each other.




I know very little of the detail there but "the enemy of my enemy is my friend" comes to mind.

Would the issues with China not prompt the West to do things to the advantage of India going forward?


----------



## over9k (13 October 2021)

Smurf1976 said:


> I know very little of the detail there but "the enemy of my enemy is my friend" comes to mind.
> 
> Would the issues with China not prompt the West to do things to the advantage of India going forward?











						Quadrilateral Security Dialogue - Wikipedia
					






					en.wikipedia.org
				




https://www.smh.com.au/world/north-...iance-to-whole-new-level-20210310-p579bd.html 

https://www.smh.com.au/world/north-...-the-leaders-of-the-quad-20210924-p58ueq.html 

It's all about _energy _


----------



## qldfrog (13 October 2021)

Smurf1976 said:


> I know very little of the detail there but "the enemy of my enemy is my friend" comes to mind.
> 
> Would the issues with China not prompt the West to do things to the advantage of India going forward?



I see your point but comparing china to india is comparing New York to Mali...
China is only a developing nation due to artificial change rate and world bodies manipulation
Exceptfor a few polluting and dangerous industries (chemical industry in my mind) , and export of workers (aka IT), India really lag in my opinion against China..so for what really matters we have no choice and can not use India yet 
And India has no real interest to challenge China..I know the border incidents..but not much to win, and a lot to lose


----------



## qldfrog (13 October 2021)

qldfrog said:


> I see your point but comparing china to india is comparing New York to Mali...
> China is only a developing nation due to artificial change rate and world bodies manipulation
> Exceptfor a few polluting and dangerous industries (chemical industry in my mind) , and export of workers (aka IT), India really lag in my opinion against China..so for what really matters we have no choice and can not use India yet
> And India has no real interest to challenge China..I know the border incidents..but not much to win, and a lot to lose



but honestly I have no real clue as to what will unfold..India could side with China and have a win.
Siding with the west does not help them against Pakistan and Bangladesh whereas China has no issue squashing any muslim rising and is a natural ally


----------



## aus_trader (13 October 2021)

over9k said:


> An awful lot has changed in both countries since then though. Both are different countries compared to a generation ago.



True. I just wanted to get an idea whether there is more of a Asian crisis contagion spilling over to India from a past perspective.

For our local markets (All Ords: xao) for example it was easy to look up the past and compared to GFC or Covid, Asian crisis hardly made a blip on the chart:


----------



## Smurf1976 (13 October 2021)

qldfrog said:


> I see your point but comparing china to india is comparing New York to Mali...
> China is only a developing nation due to artificial change rate and world bodies manipulation
> Exceptfor a few polluting and dangerous industries (chemical industry in my mind) , and export of workers (aka IT), India really lag in my opinion against China..so for what really matters we have no choice and can not use India yet



Having never been to either country I'm not overly well educated on the subject but is there anything physically or culturally that's a major barrier to India developing further over the coming years? 

Anything that actually stops them apart from getting sufficient investment and so on?

Being a bit trivial here but what I do know is that some stuff I bought online from India recently arrived last week but something bought from China on the same day hasn't arrived yet.


----------



## over9k (13 October 2021)

aus_trader said:


> True. I just wanted to get an idea whether there is more of a Asian crisis contagion spilling over to India from a past perspective.
> 
> For our local markets (All Ords: xao) for example it was easy to look up the past and compared to GFC or Covid, Asian crisis hardly made a blip on the chart:
> 
> View attachment 131443



Yeah but again, both economies are WILDLY different beasts compared to 30 or 20 or even 10 years ago. What might have wiped it off the face of the earth in 2000 may barely even cause a ripple in 2021. 


For what it's worth, ignoring india's massive geographical advantages alone, here's why I'm 100% bull on India (I hold INDL) and 100% bear on China: 




Once you add India's massive geographical advantage to this you realise that China doesn't stand a chance.


----------



## over9k (13 October 2021)

Smurf1976 said:


> Having never been to either country I'm not overly well educated on the subject but is there anything physically or culturally that's a major barrier to India developing further over the coming years?
> 
> Anything that actually stops them apart from getting sufficient investment and so on?
> 
> Being a bit trivial here but what I do know is that some stuff I bought online from India recently arrived last week but something bought from China on the same day hasn't arrived yet.



I've got a couple of Indian mates: 

Caste system. The cream doesn't rise to the top in India like it really should. But China's cronyist, so relatively speaking, again, India wins by miles.


----------



## Smurf1976 (13 October 2021)

over9k said:


> It's all about _energy _



You're preaching to the converted there with that one. 

Worth noting in that context that China, India, the EU, UK and much of South America all have energy supply problems at the moment and there are others at risk of joining that list too. Engineering technical stuff aside, the economic and political consequences of it are potentially very significant.


----------



## qldfrog (13 October 2021)

Smurf1976 said:


> Having never been to either country I'm not overly well educated on the subject but is there anything physically or culturally that's a major barrier to India developing further over the coming years?
> 
> Anything that actually stops them apart from getting sufficient investment and so on?
> 
> Being a bit trivial here but what I do know is that some stuff I bought online from India recently arrived last week but something bought from China on the same day hasn't arrived yet.



Well going back to basics: 
Litterary and schooling
	

		
			
		

		
	




Then cast system, religions and health. 
That should be enough to ensure you will not that easily catch up with China
And few places on earth have more money focus than China..which is good...well for business....


----------



## over9k (13 October 2021)

Smurf1976 said:


> You're preaching to the converted there with that one.



Hah. Yeah. I think you & I are pretty much entirely on the same page with this one  


I keep saying it but Australia has so, so, SO much more leverage on the world stage than people realise. If you need this country's rocks/dirt/minerals in any form (Iron ore, coal, uranium etc) then AU really has you by the balls. 

Australia is the entire world's quarry. Last I checked/IIRC, 55% of the entire planet's supply of iron ore came from this country, just as an example.


----------



## Smurf1976 (13 October 2021)

Some more rats appearing:









						Evergrande and these Chinese real estate developers are already in trouble
					

China's real estate crisis isn't showing any sign of letting up.




					edition.cnn.com
				






> Luxury apartment developer Fantasia Holdings is teetering on the brink.






> Beijing-based developer Modern Land is also struggling to pay up on time






> Homebuilder Sinic Holdings is the latest to join the ranks of struggling developers




So along with not so Evergrande that's 4 rats making their appearance.

I wonder where the others are? There'll be more, they live in big groups normally not just a few.

Meanwhile the one rat, well mouse, that I actually want hasn't yet made an appearance. That being the remote controlled one I've ordered for the cat - yep, I've bought a remote controlled mouse. Furry mouse that is, not a computer mouse, for the cat to chase. Remote controlled and it's from China, presently somewhere in transit....


----------



## Smurf1976 (13 October 2021)

over9k said:


> I keep saying it but Australia has so, so, SO much more leverage on the world stage than people realise. If you need this country's rocks/dirt/minerals in any form (Iron ore, coal, uranium etc) then AU really has you by the balls.



In the context of uranium, South Australia alone has more than any other country and known deposits exist in NT, Qld, NSW and WA too bringing the Australian total to about 30% of world reserves.


----------



## basilio (13 October 2021)

Smurf1976 said:


> Meanwhile the one rat, well mouse, that I actually want hasn't yet made an appearance. That being the remote controlled one I've ordered for the cat - yep, I've bought a remote controlled mouse. Furry mouse that is, not a computer mouse, for the cat to chase. Remote controlled and it's from China, presently somewhere in transit....




It's probably on a sinking ship at the moment..


----------



## basilio (13 October 2021)

The list of struggling Chinese developers is growing.  Wonder who is holding the loan chits ? 









						'It is pretty serious now': China's property sector wary of Evergrande default
					

A wave of developers face payment deadlines before the end of the year and with Evergrande's fate looking increasingly bleak, fears mount of a wider crisis.




					www.abc.net.au


----------



## aus_trader (13 October 2021)

over9k said:


> Yeah but again, both economies are WILDLY different beasts compared to 30 or 20 or even 10 years ago. What might have wiped it off the face of the earth in 2000 may barely even cause a ripple in 2021.
> 
> 
> For what it's worth, ignoring india's massive geographical advantages alone, here's why I'm 100% bull on India (I hold INDL) and 100% bear on China:
> ...



Nice research @over9k , it really shows the high percentage of younger Indian population that could contribute to the economy.


----------



## greggles (13 October 2021)

over9k said:


> Yeah but again, both economies are WILDLY different beasts compared to 30 or 20 or even 10 years ago. What might have wiped it off the face of the earth in 2000 may barely even cause a ripple in 2021.
> 
> 
> For what it's worth, ignoring india's massive geographical advantages alone, here's why I'm 100% bull on India (I hold INDL) and 100% bear on China:
> ...




This demographic chart tells a story that can't be ignored. It is inevitable that India is going to outpace China economically in the next 10 to 20 years as China runs short of a young labour force to power its economy. Watch Western companies slowly move their manufacturing facilities to India over the next decade.


----------



## waterbottle (13 October 2021)

greggles said:


> This demographic chart tells a story that can't be ignored. It is inevitable that India is going to outpace China economically in the next 10 to 20 years as China runs short of a young labour force to power its economy. Watch Western companies slowly move their manufacturing facilities to India over the next decade.



What about automation?


----------



## over9k (13 October 2021)

waterbottle said:


> What about automation?



Japan is the country that leads the world in automation (as they saw this coming quite some time ago) and, well, take a look at the nikkei. It hasn't (and isn't going to) save them.


----------



## aus_trader (13 October 2021)

over9k said:


> Japan is the country that leads the world in automation (as they saw this coming quite some time ago) and, well, take a look at the nikkei. It hasn't (and isn't going to) save them.




short term looks bearish...





Long term too...


----------



## over9k (13 October 2021)

aus_trader said:


> short term looks bearish...
> 
> View attachment 131474
> 
> ...



Run it out a few decades


----------



## qldfrog (13 October 2021)

waterbottle said:


> What about automation?



It will be more China outsourcing labour intensive tasks to india and asian countries like vietnam, laos cambodia Burma 
We won't have anything left to outsource 
But yes India will grow..see my own previous posts on iind etf on the asx


----------



## aus_trader (13 October 2021)

over9k said:


> Run it out a few decades



Been falling since 2012


----------



## over9k (13 October 2021)

Or, despite the fluctuations, flat since the 90's.


----------



## Smurf1976 (14 October 2021)

So far as manufactured products are concerned, there's also the question of marketing.

If companies perceive that being associated with a particular country is bad for business, that consumers are deterred by it, then that in itself becomes a reason to shift production.

As a simple example, well this battery manufacturer didn't put the country of manufacture prominently on the product by accident. They've done it for a reason and that would come down to marketing. Otherwise, well they could just have put it in fine print in an inconspicuous place on the side if they didn't see value in drawing attention to it. Photo taken yesterday in a supermarket so they're current stock for sale.




I've noticed that on quite a few other things lately. The packaging prominently displaying that the product is made in some country that isn't China.

I'm not passing judgement there but business is business. If someone does their market research and finds that consumers would prefer products from one country over another, and both have similar costs to manufacture, well then that probably does tip the balance.


----------



## over9k (14 October 2021)

Smurf1976 said:


> So far as manufactured products are concerned, there's also the question of marketing.
> 
> If companies perceive that being associated with a particular country is bad for business, that consumers are deterred by it, then that in itself becomes a reason to shift production.
> 
> ...



Agreed. With that being said, I've noticed that there's a bit of a branding thing like that going on at the moment too where people (and I know I've done this myself with something but I can't think what) will say "It's chinese but it's GOOD chinese" or similiar. Computer parts come to mind but I know there's others. 

Kind of like korean cars - korean cars have come a long, long, LONG way. I know I've seen a couple of the mrs's friends ask about some new car one of them bought commenting on how she liked it etc and the other girl responded by going yes, this is a _KIA, _only to have everyone else respond with astonishment.


Thing is, India's a much more service based economy (think indian call centres) and I can't think of a single indian manufactured/made good I've ever bought unless you count the food, so the ball's very much in their court there I would think - they have a golden opportunity to make a hell of a first impression on the world stage.

I do know they have this: https://en.wikipedia.org/wiki/Make_in_India scheme running but I'm not aware of much else.


----------



## aus_trader (14 October 2021)

China also has great sales channels that India currently lacks, so it may take a while for India to come to sell directly in a world market platform.

I am talking about the global market places like Alibaba. In fact quite a few Indian, Bangladesh and other neighboring sellers sell their products through Alibaba due to the platform's global reach.

One thing that India has as pointed out earlier by @over9k is the young workforce who are very affordable by Western income levels. So I wouldn't be surprised if a few tech giants or other large manufactures set up business branches over there to take advantage of the educated young workers.


----------



## finicky (14 October 2021)

Smurf1976 said:


> I've noticed that on quite a few other things lately.











						Fingernail Health – Nutrition for Dry, Brittle Nails
					

If you want healthy fingernails, you have to nourish yourself from the inside-out. Fingernail health starts with a nutritious diet, because you truly are what you eat.




					www.everydayhealth.com


----------



## againsthegrain (14 October 2021)

finicky said:


> Fingernail Health – Nutrition for Dry, Brittle Nails
> 
> 
> If you want healthy fingernails, you have to nourish yourself from the inside-out. Fingernail health starts with a nutritious diet, because you truly are what you eat.
> ...




LOL
I thought it was just me


----------



## aus_trader (14 October 2021)

againsthegrain said:


> LOL
> I thought it was just me



Yeah, I thought that had to be the most relevant EverestGrandadiest comment so far...


----------



## moXJO (15 October 2021)

India has terrible permits and planning. Takes ages to get things done. The guys that get stuff done there are next level. As you have the weight of an incompetent public service and government bodies tied round your neck.


----------



## qldfrog (15 October 2021)

moXJO said:


> India has terrible permits and planning. Takes ages to get things done. The guys that get stuff done there are next level. As you have the weight of an incompetent public service and government bodies tied round your neck.



And never forget the negative effects of democracy on an economy with a society with a me first mindset.
Brings NIMBY, socialism and tall poppy syndrom..not the marks of a brilliant economy..and bureaucracy in India is a Victorian time left over.
There is money to be made by sheer numbers and youth, we agree but that's different from becoming a world economic juggernaut.
Not sure for example Nigeria is a threat to China or  US number one position yet...our neighbour Indonesia has both of these factors too...yet made in Indonesia not really common.
We often forget where China came from, it was a decent power before being destroyed by communism and the brits.
As Germany or Japan were by war.
The key cultural and social elements were in place to reposition back into the economic ladder.not applicable to India in my view


----------



## aus_trader (15 October 2021)

I waited till the close today and on our local front, this week looks bullish actually...




This is despite all the Evergrande and other China property developer negative headlines. There was even the rare headline that Australia could be affected by all this... well not a chance right 

I am thinking about looking at trading equities again after sitting on my hands or doing the odd sell of held stocks over the last few weeks.  Could the market decline be behind us or could this be a bull trap ?


----------



## sptrawler (15 October 2021)

@over9k  the Indian's are starting to get their act together, the Indian motor cycle manufacturer Royal Enfield, recently developed a 650 twin and it is really getting traction in Western markets.
Not only is it a quality product, it costs about the same as a Japanese 250, so it is selling well world wide. As the Korean's have proven, once you get a good product selling, there is a knock on effect.
https://www.rideapart.com/news/433356/royal-enfield-interceptor-top-selling-bike/

Then of course there is Jaguar and Land Rover/ Range Rover


----------



## over9k (15 October 2021)

aus_trader said:


> I waited till the close today and on our local front, this week looks bullish actually...
> 
> View attachment 131569
> 
> ...



What else are you in? My bitcoin is now up 30% in three weeks and still going.


----------



## qldfrog (16 October 2021)

sptrawler said:


> @over9k  the Indian's are starting to get their act together, the Indian motor cycle manufacturer Royal Enfield, recently developed a 650 twin and it is really getting traction in Western markets.
> Not only is it a quality product, it costs about the same as a Japanese 250, so it is selling well world wide. As the Korean's have proven, once you get a good product selling, there is a knock on effect.
> https://www.rideapart.com/news/433356/royal-enfield-interceptor-top-selling-bike/
> 
> Then of course there is Jaguar and Land Rover/ Range Rover



My MGB look was great, the inside....and not much has changed since..looking at the style of the latest Jaguar and land Rover..not sure we are on the winners there...


----------



## aus_trader (18 October 2021)

over9k said:


> What else are you in? My bitcoin is now up 30% in three weeks and still going.



Possibly looking at a few of the Gold mining stocks to buy as well as increase exposure to flight and travel stocks given that the worst of the pandemic looks to be behind us and Syd/Melb are opening up to live with the virus having being vaccinated.

Or with regards to interest rates we were talking about at some stage, NZ adding a little fuel to the fire...









						New Zealand inflation surges at fastest pace in over a decade
					

New Zealand's Consumer Price Index (CPI) rose 2.2% in the third quarter, beating expectations and surging at the fastest pace in over a decade driven by housing-related costs and other supply constraints, data released on Monday showed.




					www.reuters.com


----------



## over9k (18 October 2021)

Everything's fine, move along, nothing to see here.


----------



## aus_trader (18 October 2021)

over9k said:


> View attachment 131629
> View attachment 131628
> 
> 
> Everything's fine, move along, nothing to see here.



Absolutely, as I was saying earlier we must be in an investor frenzy or speculator frenzy that every doomy gloomy headline is giving the markets a nice little rally. Go figure...


----------



## over9k (18 October 2021)

CSI300 down another 1.5% today.

Bitcoin meanwhile is up to $84k AUD and still going


----------



## greggles (21 October 2021)

The 30 day grace period for Evergrande to meet its financial obligations expires Saturday. Clearly, it's not going to happen.









						Evergrande 'may be very close to liquidation'. So what happens then?
					

The 30-day grace period for a bond interest payment that Evergrande initially missed will expire this week. If no payments are made, a formal default will occur, meaning creditors could place the company into liquidation.




					www.abc.net.au
				




I think the market has delayed any reaction to the Evergrange crisis as the grace period had not yet expired. Well, the clock is now ticking down and a formal default now seems inevitable.

I am going on the record as predicting a huge global market selloff this Friday.


----------



## over9k (21 October 2021)

More than 10% drop and a trading halt. 

It's going to zero guys, make no doubt about it.


----------



## StockyGuy (21 October 2021)

greggles said:


> I am going on the record as predicting a huge global market selloff this Friday.




Gotta respect the boldness of a pretty concrete prediction like that!


----------



## wayneL (21 October 2021)

over9k said:


> More than 10% drop and a trading halt.
> 
> It's going to zero guys, make no doubt about it.



...and the likely contagion?

I've got my crystal ball out, but as usual, it is singularly unenlightening.


----------



## over9k (21 October 2021)

wayneL said:


> ...and the likely contagion?
> 
> I've got my crystal ball out, but as usual, it is singularly unenlightening.



Don't invest in china.


----------



## wayneL (21 October 2021)

over9k said:


> Don't invest in china.



I have my concerns about the global debt market. Perhaps I have joined too many disparate dots, but both sh*t and fan are in close proximity to each other, and the sh*t is in the move.


----------



## over9k (22 October 2021)

wayneL said:


> I have my concerns about the global debt market. Perhaps I have joined too many disparate dots, but both sh*t and fan are in close proximity to each other, and the sh*t is in the move.



Rough numbers here, but you're clearly old enough to remember the GFC: 

China's real estate bubble is more than 3x as bad as america's was.


----------



## qldfrog (27 October 2021)

Found this interesting
https://finance.yahoo.com/news/china-87-billion-electric-car-210000336.html
Wtf not even a single car produced and sold...
Will post this in ev thread too


----------



## Knobby22 (28 October 2021)

over9k said:


> Rough numbers here, but you're clearly old enough to remember the GFC:
> 
> China's real estate bubble is more than 3x as bad as america's was.



But this is actually caused by the leadership tightening rules to reduce a lending bubble.
I don't think you can equate this to the USA property crash. To me it's a bit more like a Japan story. Older demographics resulting in slower growth. overheated prices leading to an economic slowdown.
Also this is only  the first hiccup. They will recover. Regulations will be relaxed. I really can't see that much serious happening. It is a controlled economy not  free wheeling Capitalism. 

Some in the west are hoping for the worst, this being China but not yet. 
It will take twenty years of authoritarian/despotic rule to destroy the countries economy.
This leader will eventually go and they might get a more enlightened ruler/emporer (and some previous leaders were pretty smart).

What is more relevant is the International forces including political and private enterprise action that is now occurring that will stifle China's growth over time. We don't want them to go into severe recession/isolationist policies as then  populace unrest might embolden the leaders to declare a war. Or even worse an internal power struggle that spills into a coup. We want them to have too much to lose.


----------



## mullokintyre (28 October 2021)

Getting back to the Evergrande crisis, an Interesting article from Pam Mertens about the totally corrups big four accounting auditors once again.


> In 2012, short seller Citron Research released a 57-page report alleging fraudulent accounting at China Evergrande Group, the now teetering Chinese property development conglomerate that is causing severe anxiety in global markets. After spelling out six specific forms of accounting fraud that it believed to be taking place, the Citron report noted the following: “Meanwhile, Evergrande’s auditor, PricewaterhouseCoopers (Hong Kong office) has continued to provide an unqualified opinion.”
> 
> The author of the Citron report, Andrew Left, received a 5-year trading ban in Hong Kong by the Hong Kong Market Misconduct Tribunal over what it alleged was a false report.






> On November 30, 2016, GMT Research, an accounting research firm that focuses on Asia, released a report titled: “China Evergrande: Auditors Asleep.” The report found that Evergrande had overcapitalized interest and classified its own commercial premises as an investment property.
> 
> Yesterday, those previous charges of accounting irregularities were given new meaning when a specialist from the Congressional Research Service, the research arm of Congress, testified before a House hearing and leveled her own charges.
> 
> ...



So a guy who posted about the problems in Evergrande back in 2012 gets a five year ban, and the Auditor that  gave unqualified support to the annual reports just keeps right on  raking in the dough.
Be interesting to see exactly which way the US will go in relation to the requirements of audited accounts of overseas controlled entities that list on the US stock exchange. Will they force those companies to delist, or just continue to turn a blind eye.
One thing that we can be certain of , China will not kowtow to US SEC regulators and release the auditors work papers.
Mick


----------



## aus_trader (29 October 2021)

mullokintyre said:


> Getting back to the Evergrande crisis, an Interesting article from Pam Mertens about the totally corrups big four accounting auditors once again.
> 
> 
> 
> ...



Good find Mick,  accordingly a bit of corruption was happening from quite some time back.


----------



## Smurf1976 (29 October 2021)

qldfrog said:


> Found this interesting
> https://finance.yahoo.com/news/china-87-billion-electric-car-210000336.html
> Wtf not even a single car produced and sold...
> Will post this in ev thread too



So a seriously struggling company plans to change its focus to a completely different industry which just happens to be the current hot sector.

Hmm, now where have I seen that before.....

Reminds me of all those companies circa 1999 which added ".com" to their actual business name simply to create the impression of being a tech company when in truth they had no real business at all and certainly not one relating to the then new internet. 

It's always a huge red flag when someone who's failed to run a successful business decides to jump into whatever the current "hot" sector is at the time.


----------



## qldfrog (29 October 2021)

Smurf1976 said:


> So a seriously struggling company plans to change its focus to a completely different industry which just happens to be the current hot sector.
> 
> Hmm, now where have I seen that before.....
> 
> ...



Nothing new,look at rare earth lithium then H2 and green washing..even FMG BHP...one common point in general: financed by taxpayers one way or another, taxs*ckers would be a better name.
In China,here or the states. Same same..
And the distant second is usually the long term share holder


----------



## over9k (29 October 2021)

You can see how exposed the banks were (are) to this.


----------



## againsthegrain (29 October 2021)

They are now chasing the owner/ceo to pay out of his own pocket 😂 lovely


----------



## over9k (29 October 2021)

againsthegrain said:


> They are now chasing the owner/ceo to pay out of his own pocket 😂 lovely



Not so much chasing as saying they're not going to step in again until after he's paid out of his own pocket first, which I suspect he's probably not going to do. 

It's just a giant game of chicken.


----------



## aus_trader (1 November 2021)

over9k said:


> Not so much chasing as saying they're not going to step in again until after he's paid out of his own pocket first, which I suspect he's probably not going to do.
> 
> It's just a giant game of chicken.



Only thing, unlike in the US when all the subprime CDO package schemers and bankers got to walk away freely, China may impose some disciplinary action against the CEOs if they haven't run the companies responsibly.


----------



## qldfrog (1 November 2021)

aus_trader said:


> Only thing, unlike in the US when all the subprime CDO package schemers and bankers got to walk away freely, China may impose some disciplinary action against the CEOs if they haven't run the companies responsibly.



and that charge could be a full metal jacket leaded sentence


----------



## waterbottle (11 November 2021)

__





						DMSA Deutsche Markt Screening Agentur GmbH
					






					www.dmsa-agentur.de
				




Reporting default on some bonds. 
Today is also the last day of the CCP's plenary meeting where Xi is expected to win a 3rd term. 

My guess is he isn't going to start off his 3rd time with a failure....


----------



## willfairfax89 (13 November 2021)

Chinese developer China Evergrande Group paid interest on overdue bonds - the media write that the company has so far managed to avoid a default.

This is reported by Reuters, NYT and Bloomberg.

Reuters reported on Nov. 10, citing a source, that some bondholders of China Evergrande Group did not receive the coupon until the end of business hours in Asia on Wednesday, when a 30-day grace period for late payments expired.
It is noted that the company did not default on any of the issues, but a 30-day grace period for payments of more than $ 148 million on bonds maturing in April 2022, 2023 and 2024 ended on Wednesday.
Evergrande declined to comment on Wednesday.
On the morning of November 11, Reuters reported that China Evergrande Group still avoided default (for the third time in a month) - newspaper sources said that several bondholders had received late payments.
NYT, citing sources, also writes that China Evergrande Group did carry out at least 2 issues on Wednesday, "which indicates that it again managed to overcome the default."
https://www.reuters.com/business/in...-mln-payment-amid-contagion-fears-2021-11-09/


----------



## qldfrog (13 November 2021)

Interesting, so in a nutshell, Chinese government came in and "saved" them at the last hour


----------



## SyBoo (13 November 2021)

Evergrande: the bond and interest payment deadlines to watch | Financial Times (ft.com)


----------



## SyBoo (13 November 2021)

Ponzi scheme - Wikipedia

" A *Ponzi scheme* (/ˈpɒnzi/, Italian: [ˈpontsi]) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity (e.g., product sales or successful investments), and they remain unaware that other investors are the source of funds."


----------



## SyBoo (15 November 2021)

Some light reading from the crazy crew at DMSA.

THE GREAT RESET: Evergrande and the Final Meltdown of the Global Financial System

Link: Microsoft Word - 20211024_DMSA_EVG_RR_en.docx (dmsa-agentur.de)  (pdf size 1.82MB)

_(this is my last post on this tread, bye)_


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## waterbottle (15 November 2021)

Who exactly is DMSA? 

I'm still skeptical about a collapse. 

The evergrande dilemma should be viewed through a geopolitical lens, with the recent coronavirus pandemic and US-China trade wars in mind. 

It doesn't make sense for the CCP to allow evergrande to collapse and allow the narrative of China being a poor global citizen to continue. 

The GFC triggered made credit markets lock up overnight because of international events. I don't doubt for a second that if such an event were to occur and China were solely responsible (by allowing collapse), then there would be a targeted, international response restricting funds into China. Ergo, the ramifications of a collapse in China outweigh whatever philosophy they're trying to push. 

What I think will happen is the CCP will hand out its own form of economic justice. The world watched as banks were bailed out during the GFC with no/limited consequences to the executives on duty or their companies. 
I think China will be harsher in this regard, with executives held personally responsible. It would be in keeping with their model of shared social duty for unified economic gain.


----------



## greggles (7 December 2021)

Almost three months later and the Evergrande implosion seems to be playing out in slow motion with the company continuing to sell assets to pay down debt.









						Evergrande moves toward restructuring; state swoops in to contain risk
					

China Evergrande Group has set up a risk management committee as the cash-strapped property developer inches closer to a debt restructuring that has loomed for months over global markets and the world's second-largest economy.




					www.reuters.com
				




China's Central Bank and authorities in China's Guangdong province are stepping in to try and contain the fallout from the crisis. The situation is being played down by Chinese regulatory authorities in an attempt to restore confidence in China's ailing property sector.

_"Evergrande's problem was mainly caused by its own mismanagement and break-neck expansion," the People's Bank of China said.

Short-term risks caused by a single real estate firm will not undermine market fundraising in the medium and long term, it said, adding that housing sales, land purchases and financing "have already returned to normal in China."_

It seems China is determined to make the Evergrande collapse a case of letting the air out of a balloon slowly instead of allowing to pop all at once.


----------



## divs4ever (7 December 2021)

greggles said:


> Almost three months later and the Evergrande implosion seems to be playing out in slow motion with the company continuing to sell assets to pay down debt.
> 
> 
> 
> ...



 if you mean across China  and NOT just Evergrande  , is that plan so bad , has to be better than regular discreet bailouts and  continued reckless expansion .

 but this has happened before in the West  , the Evergrande problem  is probably because Western investors  backed up the truck  to grab a BIG load of high-yield debt ( and probably leveraged those assets and created derivatives  on that mix of 'products ' )

 i doubt the greedy over-expansion stopped at the Chinese border (with the corporate debt transactions )

 but not only should it send shivers of caution  across the Chinese financial and construction sectors   , it is a timely reminder to re-assess your investments  across the globe in these sectors ( there will be contracts and contractors at risk here as well not just investors , banks and employees )


----------



## mullokintyre (8 December 2021)

Evergrande appears yo have missed the payment deadline.
Now comes the negotiations between bond holders.
Could be interesting.


From  ABC News


> Chinese developer Evergrande is edging closer to formal default, with reports suggesting that it has missed its final deadlines to pay some bondholders.
> 
> Key points:​
> Multiple sources have told financial news service Reuters that Evergrande has missed a payment deadline
> ...



Mick


----------



## Dona Ferentes (8 December 2021)

The Financial Times has a story about the Risk Management committee with 7 people on it, including 4 from the Guandong CCP. Shenzen itself is too busty managing another property implosion .


> _Liu Zhihong, a senior executive from Guangdong Holdings, a conglomerate controlled by the Guangdong provincial government, was named co-chairman of the committee.
> 
> According to two people involved in Evergrande’s restructuring, the Guangdong government has assumed responsibility for Evergrande in part because the officials in Shenzhen have been preoccupied with similar problems at Baoneng, a local property and financial services group._




China’s central bank, securities regulator and banks regulator all issued statements on Friday asserting that the developer’s woes stemmed from management errors and its crisis would not destabilise the financial system. On Monday night, the Chinese Communist Party’s Politburo said it would take steps to “boost public housing and support the housing market”.

In a statement issued on Monday night after shares in Evergrande fell to a record low in Hong Kong trading, [the soon to be disenfranchised] CEO Hui said the new committee would not report to the board “_but will play an important role in mitigating and eliminating the future risks of the group_”.


----------



## divs4ever (8 December 2021)

divs4ever said:


> if you mean across China  and NOT just Evergrande  , is that plan so bad , has to be better than regular discreet bailouts and  continued reckless expansion .
> 
> but this has happened before in the West  , the Evergrande problem  is probably because Western investors  backed up the truck  to grab a BIG load of high-yield debt ( and probably leveraged those assets and created derivatives  on that mix of 'products ' )
> 
> ...



 for further reference  , i got a scorching via some ASX listed companies ( contractors ) when the Arab miracle popped  , i believe most of the damage was done via Dubai projects  , i don't remember any of the ASX listed banks admitting any real damage  , but  some construction companies  sure had some fallout .

but if financiers start   to get nervous  with other ambitious projects elsewhere  , that could ripple


----------



## qldfrog (10 December 2021)

Well I believe this is it, start of the Evergrande collapse, how long before the spread reaches the market, took nearly a month in march 20202 for covid scare to spread.
I am ctually surprised at how slow news travel when the focus of the medias is on the 4 5 6th pfizer jab and omicron vs real issues.
But true, it is harder to force a Reset and keep the populace down  on the news of a bond collapsing in China.
yet the effects will be real IMHO


----------



## mullokintyre (10 December 2021)

Kaisa group, another Chinese developer, has also missed a payment deadline.
From Zero Hedge


> Fitch said there was limited information available on Kaisa's restructuring plan after it missed $400 million in offshore bonds repayment on Tuesday. Evergrande said last week it planned to forge ahead with a restructuring of its debt.



I found this piece of data surprising.


> But most importantly, as noted earlier, China is desperate to limit the fallout on the broader housing market, *in a country where real estate accounts for about a quarter of economic output and as much as 75% of household wealth as we have noted for half a decade.  *China’s housing slump has intensified in recent months after sales plunged and home prices fell for the first time in six years.



Mick


----------



## divs4ever (10 December 2021)

it would be more than just the  Chinese Government  worried about contagion  from Evergrande and Kaisa  ,  if only we had a better idea who was holding that distressed debt  ( and derivatives on them )   are they  tucked away in Pension/Super funds  , hiding in bank portfolios  maybe in ETF bond funds

  and of course every building company that sells 'off the plan ' ( and their financiers ) and their contractors/sub-contractors whether they do business inside China or outside of it 

 one thing to  watch is any real decrease  in bonds being bought by Central Banks ( even if they only  buy local bonds because several have been buying mortgage banked securities over the past two ears propping up local property markets )


----------



## over9k (10 December 2021)

divs4ever said:


> it would be more than just the  Chinese Government  worried about contagion  from Evergrande and Kaisa  ,  if only we had a better idea who was holding that distressed debt  ( and derivatives on them )   are they  tucked away in Pension/Super funds  , hiding in bank portfolios  maybe in ETF bond funds
> 
> and of course every building company that sells 'off the plan ' ( and their financiers ) and their contractors/sub-contractors whether they do business inside China or outside of it
> 
> one thing to  watch is any real decrease  in bonds being bought by Central Banks ( even if they only  buy local bonds because several have been buying mortgage banked securities over the past two ears propping up local property markets )



I haven't looked into it too much, but I'm pretty confident that the bonds which were defaulted on were offshore and dollar bonds, so that's probably why the chinese government didn't step in - defaulting to foreigners is a very different thing to defaulting to your own internal citizens.


----------



## wayneL (10 December 2021)

My opinion is that, except for those who have had their bonds defaulted on, this is a nothing burger in terms of the world economy.

Don't forget we now live in a financial Twilight zone where inflation is 10 or 12% (real,not reported) and 10 year yields less than 2%, with no real prospect in the near to medium term that they're going anywhere.

we have a US economy that is going straight down the sh¹t chute and a stock market that keeps cracking all-time highs.

We have a precious metals market that despite all the above is absolutely moribund.

There's all sorts of other weirdnesses, but it's Friday afternoon and I am three sheets to the wind, so you'll have to fill in the blanks yourselves.


----------



## divs4ever (10 December 2021)

wayneL said:


> My opinion is that, except for those who have had their bonds defaulted on, this is a nothing burger in terms of the world economy.
> 
> Don't forget we now live in a financial Twilight zone where inflation is 10 or 12% (real,not reported) and 10 year yields less than 2%, with no real prospect in the near to medium term that they're going anywhere.
> 
> ...



 the market ( and lending ) runs on confidence  ,  if every lender/investor  was a hard-headed realist  like Warren Buffet  , they would be sitting on piles of cash .. WAITING

 ( i would be as well but i need to be EARNING otherwise i would have a few  good stocks and a mix of bullion and cash )

 good luck


----------



## wayneL (10 December 2021)

divs4ever said:


> the market ( and lending ) runs on confidence  ,  if every lender/investor  was a hard-headed realist  like Warren Buffet  , they would be sitting on piles of cash .. WAITING
> 
> ( i would be as well but i need to be EARNING otherwise i would have a few  good stocks and a mix of bullion and cash )
> 
> good luck



I'm in the sitting on piles of cash camp (apart from some PM and crypto HODLs), because I am still earning (at least until some galloping housewife's mongrel warmblood takes out my knee cap or something like that).

... But I am not very comfortable with that. Yes waiting, and yes taking a few trades on the commodities, but I just want to plonk it somewhere and go and have a festive dinner with friends and family.


----------



## divs4ever (10 December 2021)

i am retired  , i need  to be running with ( or in front of ) real inflation 

  yes it is very hard to park money sensibly  , currently 

 a wizard like Buffet  would have some juicy  hybrids  (  mine redeemed a few years back with no suitable replacements found  )

 good luck  organizing the festive season  i suspect there will be some extra dramas  coming 

 cheers


----------



## wayneL (10 December 2021)

divs4ever said:


> i suspect there will be some extra dramas  coming
> 
> cheers



Of that I am certain you are correct


----------



## wayneL (10 December 2021)

wayneL said:


> I'm in the sitting on piles of cash camp (apart from some PM and crypto HODLs), because I am still earning (at least until some galloping housewife's mongrel warmblood takes out my knee cap or something like that).
> 
> ... But I am not very comfortable with that. Yes waiting, and yes taking a few trades on the commodities, but I just want to plonk it somewhere and go and have a festive dinner with friends and family.



So pretty much like all major parties then?


----------



## qldfrog (2 January 2022)

For a useful thread of news in China RE unwindings
https://www.scmp.com/topics/evergra...MI3PmEx7CR9QIVzBhyCh3dMARBEAEYASAAEgJXzfD_BwE


----------



## sptrawler (3 January 2022)

Things aren't looking good.








						Evergrande shares placed in trading halt after luxury island demolition order
					

Troubled Chinese property giant Evergrande's shares have been suspended from trading on the Hong Kong stock exchange. The company did not give a reason for the halt.




					www.abc.net.au


----------



## mullokintyre (18 January 2022)

Following on from the above collapse meme, we now have  the bonds of the biggest Chinese hpousing developer, Country gardens , plunged overnight after rumours it did not get support for a convertible bond deal.
From Bloombergs


> Since taking the top spot from China Evergrande Group in 2017, *Country Garden has remained the nation's largest developer in China by contracted sales. *It employs more than 200,000 people.
> 
> Headquartered in the southern city of Foshan in Guangdong province, the firm - like China Evergrande Group - has focused in recent years on building housing developments in lower-tier cities.
> 
> ...



And the contagion may well spread to others. 


> Meanwhile, in the latest wave of selling, investors are now scrutinizing Country Garden's capacity to raise funding from a variety of channels, particularly as the offshore credit market remains effectively closed to most developers. It needs to repay or refinance some US$1.3 billion on bonds this year, the majority of which are dollar notes. Its next maturity is a US$425 million bond due Jan 27.
> 
> The selling in Country Garden's bond accelerated last week after the company struggled to tap the market for fresh funds, *reportedly pulling a $300 million convertible bond issue due to weak demand. *At the same time, Sunac’s shares sank a record 23% after it sold new equity. Focus has also turned to the spillover effects of Country Garden's falling bond prices on the notes of other stronger developers as fears of contagion risks remain elevated.
> 
> ...



Mick


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## mullokintyre (22 March 2022)

Seems that Evergrande shares hve been placed in a trading halt (again).

From Indian Business Insider



> Share of embattled property developer China Evergrande Group were suspended from trading on Monday, a filing from the Hong Kong stock exchange showed.
> 
> 
> 
> ...



Wonder what it is this time?
Mick


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## Dona Ferentes (16 July 2022)

mullokintyre said:


> Wonder what it is this time?



_Snowballing_?

China Real Estate Information Corporation reported that home buyers had stopped mortgage payments on at least 100 uncompleted projects in more than 50 cities on Wednesday. What was particularly worrying was that the numbers indicated a rapidly growing trend, up from 28 projects on Monday and then 58 projects on Tuesday.

There are three connected reasons mortgagees could be boycotting payments.

*First*, there are concerns that shaky property developers will go out of business before the projects are completed. Defaults and delayed debt repayments have basically continued for a year, since the problems surrounding Evergrande.

Nomura economists this week estimated that Chinese developers have only delivered about 60 per cent of homes they pre-sold between 2013 and 2020 – a period in which Chinese mortgage debt rose by $US4 trillion.

*Second*, there are concerns that banks, which have an estimated $US6.8 trillion of mortgages on their books and another $US1.9 trillion in loans to developers, may crack under the weight of this property debt. A series of bank runs in recent weeks on lenders that froze developers have raised concerns about the fragility in this sector.

*Finally*, there are obvious concerns that recent falls in house prices – down for a 10th-straight month in June – mean properties are worth less than what consumers paid for them.


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## mullokintyre (16 July 2022)

Dona Ferentes said:


> _Snowballing_?
> 
> China Real Estate Information Corporation reported that home buyers had stopped mortgage payments on at least 100 uncompleted projects in more than 50 cities on Wednesday. What was particularly worrying was that the numbers indicated a rapidly growing trend, up from 28 projects on Monday and then 58 projects on Tuesday.
> 
> ...



Just to  add to the problems, it seems that (some) of the peasants are revolting
From Zero Hedge


> Chinese residents are increasingly walking the walk. First, it was the violent outcry against mandatory covid vaccines that put an end to Beijing's desire to forcibly innoculate all Beijing residents _*in just 48 hours *_- a feat not all of America's armed militias have been able to achieve, and now it's a grassroots push for what appears to be a debt jubillee as millions of homeowners suddenly stop paying their mortgages, a shocking move that has sent shockwaves across China's capital markets and has sparked panic within China's political leadership circles.
> 
> As Bloomberg reports overnight, *a rapidly increasing number of "disgruntled Chinese homebuyers" are refusing to pay mortgages for unfinished construction projects, *exacerbating the country’s real estate woes and stoking fears that the crisis will spread to the wider financial system as countless mortgages default.
> 
> According to researcher China Real Estate Information, *homebuyers have stopped mortgage payments on at least 100 projects in more than 50 cities as of Wednesday, *up from 58 projects on Tuesday and only 28 on Monday, according to Jefferies Financial Group Inc. analysts including Shujin Chen.





> *The boycotts raise the risk of mortgage defaults, a new set of troubles for banks that are already squeezed by exposure to ailing property developers. Mortgages make up almost 20% of total bank loans outstanding, amounting to about 39 trillion yuan* ($5.8 trillion).
> 
> In a rather panicked note from Morgan Stanley economist Zhipeng Cai (available to pro subscribers), he addresses the topic of widespread mortgage nonpayment and writes that "w*e estimate 188mn sqm (1.7mn units) are at risk. *We expect local governments will be urged to help completion, but a national bazooka solution remains difficult in near term."
> 
> ...



These things always seem to develop very quickly in China, and just as quickly get killed off.
Mick


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## mullokintyre (21 July 2022)

The "I aint gunna pay no more" paradigm seems to be spreading in China.
From  Zero Hedge


> In a jarring case study of what happens when a ponzi scheme goes into reverse, hundreds of contractors to the property industry complained that *they can no longer afford to pay their own bills *because developers including China Evergrande Group still owe them money, Caixin reported, citing a statement it received from a supplier Tuesday.
> 
> Similar to homebuyers who have taken a stand and refuse to pay for properties that remain uncompleted, one group of small businesses and suppliers circulated a letter online saying *they will stop repaying debts after Evergrande’s cash crisis left them out of pocket.
> 
> ...


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## rcw1 (29 November 2022)

Good morning,
Been reported today (29/11/22):

 Evergrande has sold land earlier earmarked for its headquarters in the southern tech hub Shenzhen for $1 billion, according to an official document, as it fights for survival.  The real estate behemoth has been involved in restructuring negotiations after racking up $300 billion in liabilities following Beijing’s crackdown on excessive debt and rampant speculation in the property sector.

The 10,377-square-metre (111,700-square-foot) land in Nanshan district was sold to Shenzhen Anhe No. 1 Real Estate Development Co. for 7.5 billion yuan, according to land transaction records published by the city’s Public Resource Exchange Centre on Saturday.

Evergrande has scrambled to offload assets in recent months and its financial situation has worsened considerably since last year.

Its troubles are emblematic of the crisis rippling across China’s massive property sector, with smaller companies also defaulting on loans and others struggling to raise cash after Beijing imposed widespread lending curbs in 2020.

Major developers including Evergrande have failed to complete projects, sparking mortgage boycotts and protests from homebuyers.  China’s banking regulator earlier this month unveiled sweeping measures to support the property sector, including credit support for distressed developers to ensure the completion and handover of projects to homeowners.

Have a very nice day, today.

Kind regards
rcw1


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