China's Evergrande liquidation is 'trillion dollar problem'

China's largest property developer Evergrande (3333.HK) faces liquidation after courts deemed the company incapable of delivering on restructuring plans. The Chinese economy contends with uncertainties as officials attempt to inject a stimulus package of $278 billion (2 trillion Chinese yuan) back into markets.
Meyer, Unkovic & Scott Partner Dennis Unkovic comments on contagion fears associated with Evergrande's liquidation for both China's property sector and its markets.
"It reminds me a little bit of the Lehman Brothers moment. When Lehman Brothers went down, there was a question about how it would spread. You have other companies like Evergrande, for example, Country Garden (2007.HK), that have similar debts," Unkovic says. "Country Garden is now the largest private real estate company in China, and it has similar problems to Evergrande. The problem is it isn't over, and it really may just be beginning."
#youtube #China #stockmarket
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[@allblacks405]

If ultimately, homebuyers (those who aren't speculators) are protected, that would be the best outcome from this saga. Speculative investors shouldn't get any sympathy.

[@apsmith1635]

I agree with the statement about being cautious on investing in China

[@Highlander1432]

Remember how right after Trump increased tariffs on them there was this horrible virus unleashed upon the world ?

[@GK-qc5ry]

Feels like contagion with ripple effects to incomes and confidence

[@lastChang]

China 🇨🇳 may be in the same situation as Evergrande is. - That's why Moody's rating agency moved China down to "Negative" rating last year. It had concerns about China's ability to pay its world-highest debt, at $55 trillion.

[@CosmicSeeker69]

01:36 - The 'coincidence of timing' - Bro, there ain't no coincidences in world finances - or in world epidemics. NONE

[@CosmicSeeker69]

03:19 Classic moment in KZbin history!

[@n33oh]

Remember what Warren said about what to do when others are panicking?

[@EliHuangIPW]

感谢

[@brodobroggins]

Any insights into economic contagion? We are looking at a 2008 level recession here.

[@lokesh303101]

Good Opportunity for Asset Management Companies.

[@reonalfa1562]

Disaster!

[@Castle743]

No big surprise

[@janechoy2073]

Well. If it's one country one system, then yes, mainland China should by their own words recognize this ruling by the HK govt. Otherwise it's going to look really bad if it asks the HK govt to rescind.

[@christiansmith-of7dt]

Responsibility initiative guilt penalty experience

[@HKim0072]

This isn't Lehman. It's way more Japan than the US.

[@Atrain81]

This is not Lehman, you are correct, it is multitudes larger that will span across the globe. Bond holders around the world will be impacted which can spill into other cascading events. Then again in a digital age with modern money theories and high frequency algorithmic trading bots, anything can be manipulated to look the narrative!?

[@HKim0072]

@@Atrain81 lol, no dude. There is minimal leverage. It's a 2 dimensional problem. There aren't crazy derivatives attached to the debt. Bad debt = bad debt to one party. Seriously, please do a little research instead of vomiting words and phrases that mean nothing. Edit: I'm 100% sure you don't know about the last 2 rounds of toxic assets that CCP China had to bailout. Come on. We have tons of correct information to look at it. Be curious and use a little elbow grease.

[@sting114]

Lots of bank managers getting kickbacks money 💴 just to approves bogus loans. That’s why it collapsed

[@Highlander1432]

Sounds like 2005-2007 USA

[@teatree6228]

China not bailing wvergrande as many investors in Ever are from UXA speculative companies

[@vthomas2482]

Finally

[@tkyap2524]

Some are supposed to be celebrating the news, but are they? It's the repercussions that are worrying.

[@tkyap2524]

@@micro-organism-pv5gd - Other people's money.

[@mrsn3sbit888]

GUH

[@bravosierra2447]

Creditors: we want our money back. CCP: but, but one country two systems. Creditors: ….

[@john_wick1]

Only the offshore assets can be liquidated... none of the onshore can be touched... CCP won't allow it

[@user-vc5zt9ci12]

So what does the CCP do? Pump a trillion in to cover? Plus another trillion to complete all the projects?

[@madsam0320]

HK has independent judiciary from mainland China, it works both way, no court in mainland China is going to heed HK court order.

[@user-vc5zt9ci12]

@@madsam0320 so how is the $330,000,000,000 going to be covered? and the 1,200 projects funded?

[@user-vc5zt9ci12]

@@HoLeeFook68 exactly. When you lose the rule of law in your fiscal system, you no longer have a fiscal system. Inward investment will drop to nothing.

[@madsam0320]

@@user-vc5zt9ci12 evergrande was predicted to collapse for years but they still haven’t, they have massive debts, but also assets and all the projects are potentially assets. You try getting assets from New York or London as a creditor outside of the country and see if they really care. Everyone looks after their own interests, that’s rule number one.

[@rohanmodi6348]

Nice stuff against hypocrisy of china

[@jeromepasion6524]

yepp. american exceptionalism is hard to replicate…especially by totalitarians. now their landscape is littered by concrete unfinished towers.

[@questioneryusef8264]

DOMINO EFFECT

[@Highlander1432]

DXY keeps getting stronger and stronger!!

[@davidholmes9643]

Where does the money come from to finish these shell buildings? Many built using poor quality materials. What will happen is Most will have to demolished. GPD is Negative and has been for over a decade. Simple False Accounting.

[@lizzlewisus]

How is the US going in the right direction? We're all interwoven. Don't forget 2008.

[@aisha.m]

5:10 - 5:59 @MovingHomewithCharlie

[@WizardHarry69]

Here come all the trading halts to keep this clown of a manipulated stock market going.

[@hanskleinjan]

I’m afraid the problems are too solid and problematic to liquidate.

[@ArabicReja973]

The liquidity of Evergrande is the beginning, not the end, of the Great Fall of 🇨🇳China. - Evergrande's $340 billion debt is more than the GDP of Vietnam. - *Empty apartments,* mostly unfinished, are sufficient to house the population of Germany. - The company's eye-watering $81 billion loss over 2 years is bigger than the GDP of 40 countries. - It lost 80% of its market value on the first day of resuming trading after 16 months of absence. - Evergrande said, as of June, it received more than *2,200 lawsuits,* totaling $73.40 billion in liability.

[@n33oh]

Evergrande loss is like 2% of China GDP, don't forget, China is still a whale.

[@great4ever845]

Okay what about the U.S corporate real estate

[@GOU28]

accept NVIDIA

[@SkankHuntForty2]

Is this going to trigger a worldwide economic crisis?

[@icu17siberia]

no. many countries (the smart ones) have built a financial wall around china.

[@HKim0072]

Have you heard of the country of Japan? Have you heard of Japan's lost decade(s)?

[@rabuanmantine8522]

China reigning in real estate is a good thing. Capitalism without control is alternative reality

[@TheESLtv]

Hongkong has nothing to say

[@jjmmat133]

I thought it's 300 Billion

[@gf5617]

CCCCCCrap

[@xfactor6099]

USSSa$$

[@xfactor6099]

DNNNCik

[@xfactor6099]

RNNNCrap

[@richprich]

Us company with this company are going down

[@axequalsb8431]

Stock markets good = economy is good? 😂

[@xiphoid2011]

My pay went up 4%, I just got a bigger than average bonus because last quarter business was good. And my 401k is happy. Inflation is down below my pay increase. So yeah, economy is good. 😊

[@pushslice]

^^^ Original commenter has just admitted they don’t have a US-heavy portfolio. Well, that’s a shame. Keep your chin up, buddy!

[@reonalfa1562]

I am moving to Mexico 🇲🇽, much better 🏆🌞👍

[@TheFlagUnit]

Enjoy the cartels

[@oscarencinas7011]

@@TheFlagUnit not a problem in big cities like monterrey

[@Highlander1432]

Sounds like it's gonna be a good time to buy a house soon if you're in China

[@standoctor]

30% in real estate going down in China means that 70% is unaffected. China is still achieving positive growth in EV , batteries, solar, AI, rare earth, pharmaceutical. So do your maths, China 's growth may not be double figures in previous years but still better than the 1-2% in EU and the usa's growth artificially propped up by weapon sales from the wars

[@Alfisti156]

CCP going bankrupt!

[@CosmicSeeker69]

30% in real estate going down in China - source: CCP news/propaganda machine. Reality is: 30% of Chynese real estate is only a Tofu Dong shell. Oh, and BTW - The EV market is tanking as we type.. Those cheap Chynese EV Karaoke boxes are going to pile up in UK/US dock sites bc the market for these cars DOES NOT EXIST.

[@icu17siberia]

China will need investment capital for those industries, and it won't be available from Chinese banks.

[@GK-qc5ry]

No that is too simplistic. If people's deposits or house purchases are worth nothing people's real incomes or savings will be lost/affected which affects consumption which is a bigger part of the economy.

[@Neosin1]

Do the opposite of what these guys says and you will make money!

[@matsmcmats]

Yeah, go invest in Evergrand and other Chinese real estate, son! 😂

[@FinanceAdvise_NL]

Buy bitcoin

[@CosmicSeeker69]

😂😂😂😂😂😂 sell BTC, while/if you can (and Yes, I hold BTC)