Posted on 09/10/2021 9:03:48 PM PDT by SeekAndFind
Well, you know what they say: owe the bank $100,000 and you have a problem, owe the bank $100,000,000 and the bank has a problem...
“more than $300 billion in liabilities...more than 1.5 million Evergrande customers”
About $200,000/customer - that’s a lot for China
They seem to owe everybody.
When I lived in Hong Kong I knew several Mainland Chinese that ran real estate scams (They didn’t consider it scams) It worked like this.
1. Mr. Chan buys an uncompleted property for 200,000 RMB.
He sells it Mr. Yu (His brother-in-law) for 120,000 RMB.
2. Mr Yu, sells the property to his nephew (Mr. Chan’s Son) for 140,000 RMB.
3. The nephew sells it for 160,000 RMB to Mrs Chau (Mr. Yu’s Wife)
4. Mrs Chau sell the still uncompleted property for 180,000 RMB to Mr Lau (Her cousin)
5. Mr. Lau sell the property to Mr. Johnson, an investor from Australia for 200,000 RMB
persons 1,2,3,&4 walk away with 20,000 RMB each and the Gweilo is left with an over priced property.
However, if the developer goes belly up, or Mr. Johnson from Australia wises up the whole thing falls apart.
Because the PRC has had a booming economy since 1985 or so, many of the investors have never experienced a financial loss and are way to risk tolerant. The banks have no lending controls and very little communication between different banks So people will take out 3, 4 or 5 mortgages on their home and then invest the entire amount in the stock market. That’s great until the stock collapses.
The first amount should be 200,000 RMB
And then what’s gonna happen to our housing market or stock market? Guess Biden will blame unvaxxed
Isn’t this the same company that owns that giant ship?
RE: Isn’t this the same company that owns that giant ship?
Don’t confuse the China property developer, Evergrande with the Taiwanese Shipping and Transport company, EVERGREEN.
It is confusing because I thought the ship name was evergrand while being owned by a company, evergreen.
Known as the Brazilian issue from the 1980’s 😂
Evergrande also sold bonds, so the financial situation is much worse than just customer deposits.
With a bond rating in the $20s, it is impossible to borrow money, and their accounts payable are $148 billion, so no vendor will extend them any credit, either.
It is all over - except for the public executions.
What mutual funds owed bonds, directly or indirectly, from this turkey?
Also, who dumped these bonds into pensions or mutual funds lately?
Until today, JP Morgan was recommending this turkey. Ibwonder if they were dumping these bonds from their favored clients, to their retail clients.
Xi’s next nationalisation target.
Would you move into a building built by a defunct company who will cut corners everywhere to get the jobs done?
The stock has been below $1 for two months, which almost always means it is going to zero.
The bond would be (or was) tradable if people thought the CCP might bail it out.
It was mentioned that there were two protests. There aren’t THAT many people upset if only 100 showed up. No numbers mentioned for the other “mob”.
I seem to recall similiar scams operating in the US during the Fannie/Freddie fiasco.
Chinese building falling apart - many photos.
https://tinyurl.com/nz2ay64u
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