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To: MeneMeneTekelUpharsin

The Chinese economy is going through an apocalyptic period it hasn’t seen in decades. Chinese investors are cash-starved and typically more highly-leveraged than their already highly-indebted US counterparts. As with Japan’s crash roughly 30 years ago, they’re exiting their most liquid investments (i.e. the ones where they’ve lost the least money, and there are cash buyers), typically abroad. As with Japan’s big investors, they will probably end up losing money on their foreign assets, but end up taking far bigger losses on their Chinese investments for a decade or more, and wish they had sold their Chinese assets instead.


5 posted on 04/18/2020 6:14:47 PM PDT by Zhang Fei (My dad had a Delta 88. That was a car. It was like driving your living room.)
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To: Zhang Fei

At the same time, it has to be said that there might be no buyers for their Chinese assets at an acceptable price (relative to the loans taken out to acquire those assets), i.e. the discounts to peak prices might be huge. If they can get 90 cents on the dollar for their US assets, and 20 cents on the dollar for their Chinese assets in a forced sale, it’s understandable why they’d unload their US assets and hope for the best.


8 posted on 04/18/2020 6:33:02 PM PDT by Zhang Fei (My dad had a Delta 88. That was a car. It was like driving your living room.)
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To: Zhang Fei

Yep, this reminds me of how Japan thought they were going to take over the world economically back in the 80’s, were buying up everything all the world at inflated prices, and then it all came crashing down!


16 posted on 04/18/2020 7:47:07 PM PDT by Left2Right (Keep America Great!)
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