Collapse of China

[PBS]

4 minutes ago, ThailandRyan said:

Read a little bit and you will see what the man is saying

https://finance.yahoo.com/news/evergrande-officially-defaulted-dmsa-preparing-161200818.html

BERLIN, Nov. 10, 2021 /CNW/ -- China Evergrande Group today again defaulted on interest payments to international investors. DMSA itself is invested in these bonds and has not received any interest payments until today's end of the grace period. Now DMSA is preparing bankruptcy proceedings against Evergrande and calls on all bond investors to join it.

China Evergrande Group, the second largest real estate developer in China, defaulted on interest payments on two bonds back in September, with the 30-day grace period still ending in October. However, shortly before the end of the grace period, the public was misled by rumors about alleged interest payments. The international media also took the rumors for granted.

Only the DMSA - Deutsche Marktscreening Agentur (German Market Screening Agency) already recognized the default at that time and proved in a study that the bankruptcy of Evergrande, the world's most indebted corporation, could ultimately lead to a "Great Reset", i.e. the final meltdown of the global financial system.

Thanks. Confirms what I've been saying all along, so far legal action had not been finalised, Has DMSA now actually completed it's bankruptcy proceeding against Evergrande and insolvency application been granted by a Court, doesn't sound like it when reading the following report.

https://edition.cnn.com/2021/11/17/investing/evergrande-debt-chairman-sells-assets-intl-hnk/index.html

With more than $700 million in offshore bond coupon payments due by the end of the this year, we could see Marco Metzler’s Evergrande bankruptcy theory proved wrong or right within weeks.

https://www.asiamarkets.com/evergrande-bankruptcy-cover-up-claims-as-more-debt-deadlines-loom/

The last sentence in your post is scary, one assumes PRC government will step in to address matters, if not?

[Convert54]

The fact remains that unlike other debt failures that have rocked global financial markets such as  Lehman Brothers the actual asset value of Evergrande in terms of land are well in excess of total debt.

The whole problem with Evergrande was started by the PRC Govt. changes in legislation that the Directors of Evergrande failed to heed. If it is unable to avoid bankruptcy the PRC Govt. would be in a position to buy back at fire sale prices to an amount sufficient to satisfy debt recovery for at least strategic vested interests.

[ThailandRyan]

4 hours ago, PBS said:

Thanks. Confirms what I've been saying all along, so far legal action had not been finalised, Has DMSA now actually completed it's bankruptcy proceeding against Evergrande and insolvency application been granted by a Court, doesn't sound like it when reading the following report.

https://edition.cnn.com/2021/11/17/investing/evergrande-debt-chairman-sells-assets-intl-hnk/index.html

With more than $700 million in offshore bond coupon payments due by the end of the this year, we could see Marco Metzler’s Evergrande bankruptcy theory proved wrong or right within weeks.

https://www.asiamarkets.com/evergrande-bankruptcy-cover-up-claims-as-more-debt-deadlines-loom/

The last sentence in your post is scary, one assumes PRC government will step in to address matters, if not?

The PRC Government will not step foot into the Arena to assist with this one, to many dominoes have already started to lean precariously.  The court filings have already started in order to force Evergrande into bankruptcy court do that the debtors in Germany DMSA can be first in line to recover monetary funds.

Edited November 18, 2021 by ThailandRyan

[Convert54]

2 hours ago, ThailandRyan said:

The PRC Government will not step foot into the Arena to assist with this one, to many dominoes have already started to lean precariously.  The court filings have already started in order to force Evergrande into bankruptcy court do that the debtors in Germany DMSA can be first in line to recover monetary funds.

You are aware that despite the substantial  debt Evergrande is liable for the assets it owns are material in excess rather than financial? Check when the DMSA  acquired it's interest. Who has a monopolistic first interest in territorial  land in China? For those that would be willing to jump on the back of the PRC just might end up expelling  gas if they wish to continue ignoring the legislative conditions local irrespective of international conformities.

There are many aspects involving political/financial end games in this saga.

[Stardust]

13 hours ago, Convert54 said:

You are aware that despite the substantial  debt Evergrande is liable for the assets it owns are material in excess rather than financial? Check when the DMSA  acquired it's interest. Who has a monopolistic first interest in territorial  land in China? For those that would be willing to jump on the back of the PRC just might end up expelling  gas if they wish to continue ignoring the legislative conditions local irrespective of international conformities.

There are many aspects involving political/financial end games in this saga.

Actual according to the dmsa from last statements is the payments came after the deadlines and only partial payments. Everything is in the approval including from other investors. Also many paymentents where they claimed to receive the payments still not sent the official confirmation. On the statement they say we are waiting til the aprovals are done or everything is figured out because of the amount of the bondholders. At the end it is like dmsa said it will be only a matter of days or sombody bail out Evergrande because the next deadlines of the other defaults are already in december. 

[Stardust]

12 minutes ago, Stardust said:

Actual according to the dmsa from last statements is the payments came after the deadlines and only partial payments. Everything is in the approval including from other investors. Also many paymentents where they claimed to receive the payments still not sent the official confirmation. On the statement they say we are waiting til the aprovals are done or everything is figured out because of the amount of the bondholders. At the end it is like dmsa said it will be only a matter of days or sombody bail out Evergrande because the next deadlines of the other defaults are already in december. 

I was looking for an english version but I guess it is coming anyway soon that was the latest. It is rumour the default is from the table

https://www.theasset.com/article/45389/theasset.com

 

[Stardust]

14 hours ago, Convert54 said:

You are aware that despite the substantial  debt Evergrande is liable for the assets it owns are material in excess rather than financial? Check when the DMSA  acquired it's interest. Who has a monopolistic first interest in territorial  land in China? For those that would be willing to jump on the back of the PRC just might end up expelling  gas if they wish to continue ignoring the legislative conditions local irrespective of international conformities.

There are many aspects involving political/financial end games in this saga.

It is an rumour that the default is no more on the table the central banks only try to avoid a big bang and figuere out to handle it. DMSA warned again not to be naive and take the rumours at facts and with a naivity. And the proceedings needs time and the central banks in China and USA are informed.

[Convert54]

57 minutes ago, Stardust said:

It is an rumour that the default is no more on the table the central banks only try to avoid a big bang and figuere out to handle it. DMSA warned again not to be naive and take the rumours at facts and with a naivity. And the proceedings needs time and the central banks in China and USA are informed.

I am sure the DMSA and others with associated risk are preparing or are prepared for a worst case situation. But only as much as is prudent rather than rushing to welcome that situation that some appear to desire .

 

 

 

 

[Stardust]

25 minutes ago, Convert54 said:

I am sure the DMSA and others with associated risk are preparing or are prepared for a worst case situation. But only as much as is prudent rather than rushing to welcome that situation that some appear to desire .

The last info from the central bank china was that they look that the bankruptcy of Evergrande has no huge impact so they are at work also wit us fed. But they said the bankruptcy so it sounded like a confirmation. Anyway these proceedings , approvals etc are a timly process even when dmsa onky a matter of days I expect more than a week because also a statement from dmsa was after they informed the fed, by the way the fed agreed with the dmsa about the default, they have to figure it out that is not a big bang because of the huge amounts of money are involved. At the moment they figuere also out how many defaults or payments after the dead end and one big point citi bank and other huge bondholders claimed they received the payment but didn't sent any official confirmation til now, it seems they just wanted to win time. Thats why dmsa warned the media not go on this rumours.

[Smithydog]

Hi Members,

There is sometimes a narrow path between fact and opinion. There are also a mass of articles talking about Evergrande (as an example) taking different stances and using financial terms sometimes in different ways.

Just to help other members understand your opinions, or facts, be they inferred or otherwise, it is helpful to others to also quote the source of your information. That way other members can immediately see and refer to what you are referencing to from amidst the vast array of articles.

Insolvency, default and bankruptcy laws worldwide may also differ in actions and results depending on local laws, interpretations, methods and resulting outcomes. People may colloquially refer to all as "Bankruptcy" which may add confusion.  

Thanks

Moderator

[Convert54]

19 minutes ago, Stardust said:

The last info from the central bank china was that they look that the bankruptcy of Evergrande has no huge impact so they are at work also wit us fed. But they said the bankruptcy so it sounded like a confirmation. Anyway these proceedings , approvals etc are a timly process even when dmsa onky a matter of days I expect more than a week because also a statement from dmsa was after they informed the fed, by the way the fed agreed with the dmsa about the default, they have to figure it out that is not a big bang because of the huge amounts of money are involved. At the moment they figuere also out how many defaults or payments after the dead end and one big point citi bank and other huge bondholders claimed they received the payment but didn't sent any official confirmation til now, it seems they just wanted to win time. Thats why dmsa warned the media not go on this rumours.

If Citibank and others have assisted in or complied to a strategy of winning time would be a massive indicator that major vested interests know that  bankruptcy would be a losing outcome for foreign based investment. Sadly for them is that the CCP 's declared intent to cool down spec borrowing in China was made public knowledge as  far back as  2017-2018 especially in regard to construction enterprises because prices were ballooning for buyers. Reliance on that ballooning Evergrande miscalculated and over extended . Due diligence by foreign investment advisors should have initiated divestment but as is usual greed in a sector that was promising high returns despite  the pandemic blinded them to reality. Pointedly DMSA ! 

I doubt the CCP will intervene because although the short term impact of Evergrande going under will hurt both in China and offshore the outcome will accommodate Xi's agenda in several ways.

In the longer term it is also likely to cause a devaluation of the Chinese currency restoring a competitive export advantage that has been eroded by historical economic success. Major trading countries with China or others look to maximizing perceived advantages of that before or up until even the brink of war !

Unlike other "financial" crisis  the Evergrande  situation involves over the top speculative debt on material property  rather than simple ledger balances involving currency speculation. Land (and buildings) do not dematerialize in the same way cash balances on a ledger can and do. Evergrande has tangible material assets that even via bankruptcy  solvency  is in excess of liability. The exposure is due to the inability to attract lenders sufficient to pre-empt  apparent unavoidable default. The game continues!

 

[Stardust]

On 11/19/2021 at 6:52 PM, Convert54 said:

If Citibank and others have assisted in or complied to a strategy of winning time would be a massive indicator that major vested interests know that  bankruptcy would be a losing outcome for foreign based investment. Sadly for them is that the CCP 's declared intent to cool down spec borrowing in China was made public knowledge as  far back as  2017-2018 especially in regard to construction enterprises because prices were ballooning for buyers. Reliance on that ballooning Evergrande miscalculated and over extended . Due diligence by foreign investment advisors should have initiated divestment but as is usual greed in a sector that was promising high returns despite  the pandemic blinded them to reality. Pointedly DMSA ! 

I doubt the CCP will intervene because although the short term impact of Evergrande going under will hurt both in China and offshore the outcome will accommodate Xi's agenda in several ways.

In the longer term it is also likely to cause a devaluation of the Chinese currency restoring a competitive export advantage that has been eroded by historical economic success. Major trading countries with China or others look to maximizing perceived advantages of that before or up until even the brink of war !

Unlike other "financial" crisis  the Evergrande  situation involves over the top speculative debt on material property  rather than simple ledger balances involving currency speculation. Land (and buildings) do not dematerialize in the same way cash balances on a ledger can and do. Evergrande has tangible material assets that even via bankruptcy  solvency  is in excess of liability. The exposure is due to the inability to attract lenders sufficient to pre-empt  apparent unavoidable default. The game continues!

 

And the cash that will be needed to bail them out and intervene because it could take down other developers, too. Add in all the payments to the suppliers where they failed. The 305 billion usd is only the actual Evergrande debt, but the total cost of an Evergrande failure, including the fallout to other businesses and lost income from fire sales of assets could be as high as USD 1 Trillion.

https://www.bloomberg.com/news/articles/2021-09-16/china-s-nightmare-evergrande-scenario-is-an-uncontrolled-crash

https://www.straitstimes.com/business/property/china-evergrandes-total-liabilities-swell-to-410-billion

I guess the central banks are running hot now to figure out how to come out of that without a big bang.

 

Edited November 21, 2021 by Smithydog
Further context added with links

[Stardust]

Maybe this brings a bit light to understand the totals or it is not only about the debts there are also other liabilities to count.

https://www.wsj.com/articles/beyond-evergrande-chinas-property-market-faces-a-5-trillion-reckoning-11633882048

 

https://www.straitstimes.com/business/property/china-evergrandes-total-liabilities-swell-to-410-billion

 

[Convert54]

Yet Beijing continues to tighten controls on loans . Does Xu Jiayin still have cash assets to cough up? Or the Evergrande Directors who quietly cashed up their shares not long before the crisis became public?  The game continues.

[nobusinessofurs]

On 10/5/2021 at 9:23 PM, Stardust said:

As a non American I am often surprised that the most American haters are the Americans (USA). And I am also surprised that this Trump fanatics hate democracy and what the USA stands for! They hate the USA and say America first, it is for non Americans quite confusing. Or is your new master Xi and Putin? 

Your right on one point, the haters are anti-American Liberals. We have a Constitution that Liberals refuse to live by nor govern by.  America First simply means putting Americans interests first. Lay off the BBC its filling you with bs.

[Stardust]

50 minutes ago, nobusinessofurs said:

Your right on one point, the haters are anti-American Liberals. We have a Constitution that Liberals refuse to live by nor govern by.  America First simply means putting Americans interests first. Lay off the BBC its filling you with bs.

You must think everybody out there is stupid and cannot reflect anything. By the way I am not from a native english speaking country so it is not about BBC and we can reflect from many perspectives. But we are also able to read in english, opinions and what the fanatics writes from Trump, Q Anan etc. To think the world out there cannot reflect , understand or analyze it says everything about you. Don't think everybody is too stupid to think for himself outside your bubble or outside of the States! Your biggest mistake is to think the outsides depends just on bbc, sorry but do you know how many countries just the eu have and how many languages and news outlets?! You should first learn to realize/ reflectthe realities of the outside of USA before answering to a subject/reflection what comes from outside the US.

[Stardust]

7 minutes ago, Stardust said:

You must think everybody out there is stupid and cannot reflect anything. By the way I am not from a native english speaking country so it is not about BBC and we can reflect from many perspectives. But we are also able to read in english, opinions and what the fanatics writes from Trump, Q Anan etc. To think the world out there cannot reflect , understand or analyze it says everything about you. Don't think everybody is too stupid to think for himself outside your bubble or outside of the States! Your biggest mistake is to think the outsides depends just on bbc, sorry but do you know how many countries just the eu have and how many languages and news outlets?! You should first learn to realize/ reflectthe realities of the outside of USA before answering to a subject/reflection what comes from outside the US.

By the way some not understand realities in europe and south east asia. Swiss has 4 languages as native language just as a example. In south east asia the same as you have in Thailand also khmer or lao etc. In my family we have languages as a native language (not english). It is absurd to claim all is about bbc or cnn. Or write in a way like nobody is able to think for himself.

[Thomazz59]

The Chinese are the world's biggest "COPY" cats.. The send people to Thailand on Government sponsered vacations to steal technology, merchandise and arts / crafts. Have a friend from Stuttgard Germany that banned Chinese from his arts and crafts shop in Chiangmai. He and his Thai wife (Hilltribe) women made some realy creative gift cards and tie dyed T-shirts, even had displys at Rimping. They (Cinese tourists) would come in and take pictures and ask question(s) regarding the manufacturing process and the walk away.. 

[Saltire]

19 minutes ago, Thomazz59 said:

The Chinese are the world's biggest "COPY" cats.. The send people to Thailand on Government sponsered vacations to steal technology, merchandise and arts / crafts. Have a friend from Stuttgard Germany that banned Chinese from his arts and crafts shop in Chiangmai. He and his Thai wife (Hilltribe) women made some realy creative gift cards and tie dyed T-shirts, even had displys at Rimping. They (Cinese tourists) would come in and take pictures and ask question(s) regarding the manufacturing process and the walk away.. 

Agree

 

Some years ago I worked for a UK manufacturing company who were highly dependant on raw materials from China. As part of a plan to build a plant there, management had many visits. As the finished products were made for many luxury high street names, they were concerned about copies and intellectual property.

On one trip they were tipped off by another UK company already established there to back out. They were told that if they went ahead it was perfectly possible they would build a carbon copy plant, fully equipped with identical machinery and workers trained by the locals trained by the company, not to produce 'fakes' but identical products at a much lower cost. They abandoned the move.

Your gift shop story reminds me of when I went to Chinese gift shops around Wuhan where I lived with my last wife, on entry many vendors would not envisage us as a couple, and many would say 'double for foreigner, 20% for you'. I won't repeat her response.

 

 

[Stardust]

Last news of evergrande 

Dmsa is in the proceedings for bankruptcy evergrande

https://www.asianinvestor.net/article/evergrande-has-defaulted-some-say/474206

 

 

[PBS]

8 hours ago, Stardust said:

Last news of evergrande 

Dmsa is in the proceedings for bankruptcy evergrande

https://www.asianinvestor.net/article/evergrande-has-defaulted-some-say/474206

Your link requires subscription. However, the original article is at URL below. The article is ten days old, with some doubt as to what has actually occurred. Rather than keep posting these claims, how about waiting until the market is in consensus as to the actual bankruptcy status of Evergrande.

https://www.financeasia.com/article/evergrande-has-defaulted-some-say/474086

[Stardust]

15 hours ago, PBS said:

Your link requires subscription. However, the original article is at URL below. The article is ten days old, with some doubt as to what has actually occurred. Rather than keep posting these claims, how about waiting until the market is in consensus as to the actual bankruptcy status of Evergrande.

https://www.financeasia.com/article/evergrande-has-defaulted-some-say/474086

I took that one becsuse the latest from dmsa was in german and not in english but simliar info and with the confirmation for the default of their bonds and they went into the proceedings. 

[Poolie]

3 minutes ago, Stardust said:

I took that one becsuse the latest from dmsa was in german and not in english but simliar info and with the confirmation for the default of their bonds and they went into the proceedings. 

Then why does your link say 'some say?' Not very conclusive? Particularly since they've had 10 days to decide. 

[Stardust]

26 minutes ago, Poolie said:

Then why does your link say 'some say?' Not very conclusive? Particularly since they've had 10 days to decide. 

Easy answer they are not the DMSA . And you couldn't answer it to yourself even I explained it before why I took that one? But if you can read german you can go directly to their homepage on latest press releases or from the financial reports on the news outlets/tv in Germany. Go ahead feel free.

[Poolie]

2 minutes ago, Stardust said:

Easy answer they are not the DMSA . And you couldn't answer it to yourself even I explained it before why I took that one? But if you can read german you can go directly to their homepage on latest press releases or from the financial reports on the news outlets/tv in Germany. Go ahead feel free.

To be perfectly honest one thing matters on this thread. And it hasn't happened.