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(Yahoo)   China tries to smooth investors' feathers as the handjob over Evergrande's potential $310bil default picks up urgency   (news.yahoo.com) divider line
    More: Followup, Money, Debt, Economics, Evergrande Group's struggle, real estate developer, China's central bank, Central bank, economic growth  
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638 clicks; posted to Business » on 06 Dec 2021 at 2:50 PM (7 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



12 Comments     (+0 »)
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2021-12-06 12:11:59 PM  
"The company must be punished"

Now that is a phrase you never hear on this side of the Pacific. Maybe we should give it a try?
 
2021-12-06 2:41:59 PM  

AlgaeRancher: "The company must be punished"

Now that is a phrase you never hear on this side of the Pacific. Maybe we should give it a try?


It's complete BS. They are already backtracking on all of their "We mean business" reforms because their economy started imploding. Honestly, I don't know how they get out of this. I actually think their leadership is quite smart but this is a lose-lose for them. The debt bubbles have reached a point that when they stop getting bigger they quickly destabilize. What do you do? Keep up the charade that their still growing at 7% and let the future disaster get bigger and bigger? Bite the bullet and shrink the economy by ~30% for a decade or two? Is there a third option?

People have no idea how huge and unmanageable the debt piles are. Look at this little tidbit: "The government in the southern province of Hainan seized HNA Group, an airline operator, in 2020 after it amassed $61 billion in debt during a global acquisition spree. "They were carrying almost twice as much debt as the largest airline in the world while having ~30% the revenue.
 
2021-12-06 2:59:36 PM  
Hey, their credit is good, they owe everybody!
 
2021-12-06 3:01:11 PM  

b2theory: AlgaeRancher: "The company must be punished"

Now that is a phrase you never hear on this side of the Pacific. Maybe we should give it a try?

It's complete BS. They are already backtracking on all of their "We mean business" reforms because their economy started imploding. Honestly, I don't know how they get out of this. I actually think their leadership is quite smart but this is a lose-lose for them. The debt bubbles have reached a point that when they stop getting bigger they quickly destabilize. What do you do? Keep up the charade that their still growing at 7% and let the future disaster get bigger and bigger? Bite the bullet and shrink the economy by ~30% for a decade or two? Is there a third option?

People have no idea how huge and unmanageable the debt piles are. Look at this little tidbit: "The government in the southern province of Hainan seized HNA Group, an airline operator, in 2020 after it amassed $61 billion in debt during a global acquisition spree. "They were carrying almost twice as much debt as the largest airline in the world while having ~30% the revenue.


Of course, the largest airline in the world went bankrupt a few years ago and jettisoned all their debt and then received a $15 billion dollar bailout last year...
 
2021-12-06 3:07:12 PM  

mcreadyblue: b2theory: AlgaeRancher: "The company must be punished"

Now that is a phrase you never hear on this side of the Pacific. Maybe we should give it a try?

It's complete BS. They are already backtracking on all of their "We mean business" reforms because their economy started imploding. Honestly, I don't know how they get out of this. I actually think their leadership is quite smart but this is a lose-lose for them. The debt bubbles have reached a point that when they stop getting bigger they quickly destabilize. What do you do? Keep up the charade that their still growing at 7% and let the future disaster get bigger and bigger? Bite the bullet and shrink the economy by ~30% for a decade or two? Is there a third option?

People have no idea how huge and unmanageable the debt piles are. Look at this little tidbit: "The government in the southern province of Hainan seized HNA Group, an airline operator, in 2020 after it amassed $61 billion in debt during a global acquisition spree. "They were carrying almost twice as much debt as the largest airline in the world while having ~30% the revenue.

Of course, the largest airline in the world went bankrupt a few years ago and jettisoned all their debt and then received a $15 billion dollar bailout last year...


Of course, it's *all* about farking over the taxpayer.
 
2021-12-06 3:20:08 PM  

mcreadyblue: b2theory: AlgaeRancher: "The company must be punished"

Of course, the largest airline in the world went bankrupt a few years ago and jettisoned all their debt and then received a $15 billion dollar bailout last year...


Delta went Bankrupt 17 years ago. I also took those debt levels at 2020 levels which is kind of the best case scenario, given your 2020 bailout comment. If we had compared them to pre-COVID debt levels at Delta, HNA would have 3 to 4 times the debt with even lower revenue.

I'm not saying that Delta is well run. I am saying the HNA is an example of hidden piles of debt that don't get much scrutiny from international business journalists.
 
2021-12-06 3:59:17 PM  

b2theory: mcreadyblue: b2theory: AlgaeRancher: "The company must be punished"

Of course, the largest airline in the world went bankrupt a few years ago and jettisoned all their debt and then received a $15 billion dollar bailout last year...

Delta went Bankrupt 17 years ago. I also took those debt levels at 2020 levels which is kind of the best case scenario, given your 2020 bailout comment. If we had compared them to pre-COVID debt levels at Delta, HNA would have 3 to 4 times the debt with even lower revenue.

I'm not saying that Delta is well run. I am saying the HNA is an example of hidden piles of debt that don't get much scrutiny from international business journalists.


American went bankrupt in 2012.  They are the largest airline in the world( counting fleet size, passengers carried, and RPMs).
 
2021-12-06 4:32:46 PM  
Don't worry, foreign investors. You don't actually own any Chinese assets, as that is forbidden under Chinese law. What you own are shares in a company that loans your money to the Chinese.

Good Luck With That!
 
2021-12-06 4:35:06 PM  
They probably want to change Grande to Clear to be liquid, but Big BaiJiu won't let them
 
2021-12-06 4:43:38 PM  

b2theory: AlgaeRancher: "The company must be punished"

Now that is a phrase you never hear on this side of the Pacific. Maybe we should give it a try?

It's complete BS. They are already backtracking on all of their "We mean business" reforms because their economy started imploding. Honestly, I don't know how they get out of this. I actually think their leadership is quite smart but this is a lose-lose for them. The debt bubbles have reached a point that when they stop getting bigger they quickly destabilize. What do you do? Keep up the charade that their still growing at 7% and let the future disaster get bigger and bigger? Bite the bullet and shrink the economy by ~30% for a decade or two? Is there a third option?

People have no idea how huge and unmanageable the debt piles are. Look at this little tidbit: "The government in the southern province of Hainan seized HNA Group, an airline operator, in 2020 after it amassed $61 billion in debt during a global acquisition spree. "They were carrying almost twice as much debt as the largest airline in the world while having ~30% the revenue.


Xi is an egomaniac who has consolidated power.  I wonder if many of the smartest people have left as there is no room for promotion or responsibility.  This leaves him with boot lickers and yes-men.
It's unsurprising that an economy reliant on building has a crisis when the government throws a wrench in that economic sector.  Debt isn't bad if it enables growth, the real estate sector requires it.  Pretty much econ 101.
 
2021-12-06 6:05:27 PM  

Northern: b2theory: AlgaeRancher: "The company must be punished"

Now that is a phrase you never hear on this side of the Pacific. Maybe we should give it a try?

It's complete BS. They are already backtracking on all of their "We mean business" reforms because their economy started imploding. Honestly, I don't know how they get out of this. I actually think their leadership is quite smart but this is a lose-lose for them. The debt bubbles have reached a point that when they stop getting bigger they quickly destabilize. What do you do? Keep up the charade that their still growing at 7% and let the future disaster get bigger and bigger? Bite the bullet and shrink the economy by ~30% for a decade or two? Is there a third option?

People have no idea how huge and unmanageable the debt piles are. Look at this little tidbit: "The government in the southern province of Hainan seized HNA Group, an airline operator, in 2020 after it amassed $61 billion in debt during a global acquisition spree. "They were carrying almost twice as much debt as the largest airline in the world while having ~30% the revenue.

Xi is an egomaniac who has consolidated power.  I wonder if many of the smartest people have left as there is no room for promotion or responsibility.  This leaves him with boot lickers and yes-men.
It's unsurprising that an economy reliant on building has a crisis when the government throws a wrench in that economic sector.  Debt isn't bad if it enables growth, the real estate sector requires it.  Pretty much econ 101.


You have to be concerned that if the economy and local government debt start imploding, that the Chinese Communist Party in an effort to maintain stability moves to that old reliable nationalism .  While certainly, risking the lives of the one son of a given family is risky, it may be preferable to mask unrest and achieve the long desired goal of reunification with Taiwan. There is also a possibility to use the boarder disputes with India for a conflict, but I don't know that they desire a war with another nuclear power.
 
2021-12-06 7:54:50 PM  

Northern: Xi is an egomaniac who has consolidated power.  I wonder if many of the smartest people have left as there is no room for promotion or responsibility.  This leaves him with boot lickers and yes-men.
It's unsurprising that an economy reliant on building has a crisis when the government throws a wrench in that economic sector.  Debt isn't bad if it enables growth, the real estate sector requires it.  Pretty much econ 101.


The Chinese real estate sector, though, is vastly overbuilt.  China has more than 65 million empty apartments - enough to give every man, woman, and child in France their own unit.  They have entire "ghost cities" where a rural area built a huge metropolis capable of housing millions, and they struggle to fill them to even 10% capacity.  Real estate has been built, not in order to meet demand for housing or office space, but in order to prop up local government revenues and ensure they meet their economic growth quotas.  Real estate is also one of the few investment vehicles available to wealthy Chinese.

This is a market that is vastly distorted by political and economic forces not directly related to the supply and demand for real estate, so their borrowing is definitely unhealthy, as is the sector in general.
 
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