Posted on 09/20/2021 7:08:06 AM PDT by American Number 181269513
What's happening: Stocks in Europe tumbled Monday morning after Hong Kong's Hang Seng dropped 3.3%, suffering its worst decline in nearly two months. Chinese banks, insurers and other real estate companies were slammed. US futures are also sharply lower.
Shares of Evergrande Group (EGRNF) plummeted 10% in Hong Kong, hitting just 2.28 Hong Kong dollars ($0.29) per share. The stock has shed 84% so far this year.
Step back: Fear is growing about how the crisis at Evergrande will reverberate through the financial system. Over the last few weeks, China's most indebted developer — which has more than $300 billion in liabilities — has warned investors of cash flow issues, saying that it could default if it's unable to raise money quickly.
Evergrande now faces critical deadlines. It was supposed to repay interest on some bank loans on Monday, according to Bloomberg. The news outlet recently reported that Chinese authorities have told major banks that they won't receive those payments.
Big picture: The company holds about 6.5% of the total debt held by China's property sector, according to an estimate by UBS.
That's feeding fears that Evergrande could spark China's "Lehman moment," wherein the collapse of a single entity triggers panic across financial markets, as the fall of Lehman Brothers did in 2008.
"As a systemically important developer, an Evergrande bankruptcy would cause problems for the entire property sector, which has been an important source of economic growth and jobs in China," Ed Yardeni, president of Yardeni Research, wrote in a note to clients Monday.
(Excerpt) Read more at cnn.com ...
Perhaps dawn of the economic morning after?
Buying Chinese stock is like buying gas station sushi. I have no idea why people or companies do it. My company just recently bought a Chinese drug. They even stated one of the risks was that the research all came from China.
They bought it anyway.
People are so stupid. China’s BRAND is duplicity. It is so well documented that the truth is culturally irrelevant to them.
And since there are no fair courts in China (and quite possibly here in the US now) where do you go to enforce a contract?
If you don’t have that, you don’t have a functioning republic or a functioning capitalist economy.
China’s banking system is a fragile Ponzi scheme. Loans are made based on phony inflated values given to urban real estate. The capital is often squandered in corrupt endeavors and there is little hope of repayment. The banks don’t foreclose and pretend that they have assets in the form of performing loans. This is what happens when capital and banking are controlled by the corrupt elite of the CCP. American corporations that have been sucked into the mess will lose greatly and much non Chinese capital invested in China has already been lost. The house of cards had to fall some day. If the Americans start printing money to cover Biden’s spending fantasies, the Treasury notes the Chinese hold, their bottom line foundation assest, will lose value and their foundation will crumble. Likely to cause social and political unrest, the denunciation of capitalism and call to return to “pure” communism. The American MSM will probably buy into the coming narrative.
Somebody knows something!
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