Collapse Of Evergrande Will Not Be China’s Lehman Moment
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The world (especially investors) is watching Evergrande (China’s second largest property developer by sales) of China this week and in the coming weeks and months, for how things are handled may determine whether there would be global financial impact in years to come.
What the Chinese property giant’s crisis means for global investors Evergrande, China’s most indebted property developer, has kept global markets on edge and sparked protests at home as it struggles to survive. WSJ explains why the company’s crisis is raising questions about the state of the world’s second-largest economy, in the video published on Sep. 27, 2021, “Why China’s Evergrande Has Global Markets on Edge | WSJ“, below:
Investors have been on tenterhooks over whether China Evergrande would default on $83m in dollar bond interest payments this week. That may come down to semantic and legal arguments over what “default” means. The bigger issue is whether a two-tier China bond market is emerging, with domestic currency investors advantaged over foreign currency bondholders, in the video published on Sep. 23, 2021, “Evergrande Default Day“, below:
The financial woes of Evergrande the once-mighty Chinese property developer highlight a showdown between two competing objectives for China’s Communist Party. They aim to force China’s private sector away from speculative and risky lending practices while avoiding a financial meltdown and the collapse of the property sector, in which more than 70% of the nation’s urban wealth is locked up, in the video published on Sep. 22, 2021, “Evergrande & The Chinese Economy“, below:
In an interview with local media, an Evergrande financial adviser said the products were a type of “supply chain finance”. While the money from retail investors may in years past have gone to its suppliers, the Evergrande executives in Shenzhen receiving retail investors said this was no longer the case. One of the executives of Evergrande’s wealth management division said Hubei Gangdun was just a shell company. “Proceeds from the Wealth Management Products have been used to bridge various funding gaps faced by the parent company,” the executive said. “There is no need to thoroughly examine where the money actually went. “Some WMP proceeds were used to repay previous products but sales plummeted, making it difficult for the business model to continue,” he admitted. – This is essentially the definition of a Ponzi Scheme, in the video published on Sep. 21, 2021, “Evergrande Wealth Management Products – A Ponzi Scheme?” below:
In today’s bonus video, I’ll explain the Evergrande crisis, including how we got here and how it might impact you, in the video published on Sep. 23, 2021, “The Evergrande Crisis Explained – Today’s The Deadline, Why The World Is Worried“, below:
China’s Evergrande has bought itself a lifeline by agreeing to make a $36 million dollar interest payment due to domestic lenders on Thursday. That was enough to calm global markets that have been rocked this week by the Chinese property giant’s debt crunch. And more importantly, it buys Evergrande some time to find a way out of a full-on collapse that could wreak havoc on the Chinese economy, in the video published on Sep. 23, 2021, “Evergrande seeks to reassure investors | DW Business“, below:
David Rosenberg, Rosenberg Research president, joins The Exchange to discuss the abatement of the fear that Evergrande’s default is China’s “Lehman moment.” in the video published on Sep. 23, 2021, “Evergrande is not China’s ‘Lehman moment’: Rosenberg“, below:
Financial regulators in Beijing issued a broad set of instructions to China Evergrande Group, encouraging the embattled developer to take all measures possible to avoid a near-term default on dollar bonds while focusing on completing unfinished properties and repaying individual investors, in the video published on Sep. 23, 2021, “China Tells Evergrande to Avoid a Near-Term Default“, below:
In what could be the strongest sign yet that debt-laden Chinese property developer Evergrande cannot hope for a government bailout, the authorities are reportedly asking local governments to prepare for its potential downfall. The troubled developer owes almost $670 million in interest for the rest of 2021, including $83.5 million due on Sept 23. Capital Economics chief Asia economist Mark Williams shared his thoughts on whether Evergrande can pull through the crisis, in the video published on Sep. 23, 2021, “Chinese authorities warn local governments to prepare for potential Evergrande downfall“, below:
Citron Research Founder Andrew Left joins the Halftime Report to discuss Evergrande’s crisis in China. He discusses the potential implications for the company’s employees in China and what he learned trying to short the company in 2012, in the video published on Sep. 20, 2021, “Evergrande has been insolvent for years: Citron’s Left“, below:
Jeff Moon, fmr. assistant USTR for China affairs, & Ben Harburg, MSA Capital managing partner join ‘Squawk on the Street’ to explain how China may deal with a potential Evergrande collapse and how foreign investment will be impacted, in the video published on Sep. 23, 2021, “Understanding Evergrande collapse contagion risk to global markets“, below:
CNBC’s Eunice Yoon discusses a Wall Street Journal report that says China is asking local governments to prepare for Evergrande’s downfall, in the video published on Sep. 23, 2021, “China asks local governments to prep for Evergrande downfall: Report“, below:
Gathered, written, and posted by Windermere Sun-Susan Sun Nunamaker More about the community at www.WindermereSun.com
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