Chinese construction Mega-Bankruptcy. Evergrande about to crash for 355B

[stompix]

It seems that the Chinese have softened up a lot when things like this happen to them. I was somehow convinced that CP still keeps things under control and does not tolerate such incompetence, because how else to call such company management.

The CCP is a weird party, even their policies are weird when compared to our western way of thinking, they allow private enterprise to grow, they fuel their growth with money, they somehow let them run wild with foreign investment, some other times they impose policies or dismantle them all altogether, it's hard to find a pattern in their views especially since there is a lot of competition between provinces and a lot of finances at the province level, not controlled directly by the party, and even in the party itself, there are different groups.
I don't think that in most cases is because of incompetence, probably the cause is greed or desire to show off with numbers in billions.

They also had a real estate bubble prior to 2008, they have a lot of companies going bankrupt especially in

According to incomplete statistics, complied by Shumo Finance from the first half of this year, 208 real estate companies across China were declared bankrupt.

nothing out of the ordinary if we go by numbers alone.

But unlike the US, they have a different array of weapons to deal with those, no western country can actually limit the movement of people or force them to relocate, they can seize properties, limit purchases or ownership, they have a lot more control over the market and they could stop the bubble from bursting by just stopping everything, freezing the entire sector.

It is possible something similar is happening in the united states. Jeff Bezos may have been forced to resign from amazon.

Can you expand on that?
I have searched the internet and I don't see anything.

If you haven't put on a tinfoil hat all your search will be in vain.

They banned it, but did it “die”? Can the CCP censor Bitcoin transactions after the “ban”? Never, and the Honey Badger don’t care. Plus communist methods is why Bitcoin should be used in China.

One hundred public execution of the traitors of the cultural revolution that are using cryptocurrencies to subvert the law and you will see the difference between not giving a damn about them and the real power of the CCP when it wants to do something about it.

[1714032483]

1714032483

[1714032483]

1714032483

[Subbir]

The real estate business is one among the most important drivers of china's growth the world accounts for about 29 percent of the country's total financial transactions if evergrand goes bankrupt it be the most important test of China's economic system within the previous couple of years Investors fear evergrand bankruptcy could have an impression on other developers. China's banking industry could even be in danger but China a really powerful country, will drop everything by signing agreements with various companies.

[jaberwock]

Lehman Brothers went bankrupt with passives of 619B. Evergrande, a Chinese firm with ties to the CCP has admitted an insurmountable debt and has recently hired the same lawyers that prepared Lehman´s case for bankruptcy. 128 banks and 121 societies have claims against the company. The shockwaves may be felt through China and all the Asian region. The direct impact is around 2% of Chinese PIB and may cause more collapses.

Evergrande is a Real State / Construction company which works mostly in China and owns its own bank.

https://www.theguardian.com/world/2021/sep/14/china-property-giant-evergrande-admits-debt-crisis-as-protesters-besiege-hq

Too big to fail is actually the contrary of what the reality is. When you grow too big then it is unexpected for you to keep going with just finances. Amazon or Apple or Tesla can keep on growing, why? Because they can sell stuff forever, specially Amazon and that is why I understand them growing bigger and bigger.

Obviously finance world is different, you could make as much money as you can from there, but eventually when you grow to a level where you have so much money, eventually the profits can't continue forever.

Let's assume that you make 2 billion dollars a year profit, if you keep doing that for 10 years people may consider you not great, they want you to make more and more, and eventually you go into more and more debt to build more and more real estates but eventually you will not find anyone to buy it, it is not a car, it is not a phone, it is a house, people tend to keep their houses and not buy many, most can't afford to, and certainly not in billions. This was basically expected to fail.

[Kittygalore]

This won't just affect the Chinese and Asian region but also the African regions since they might have some contracts in that place since China wants to expand it's influence in that region too. That's a lot of losses but I think that China will brush it off like a dust since they still have other companies out there.

Didn't know that they're already in Africa, what are they doing down there? That's a pretty far continent and I gotta say that I am slightly impressed that they dare touch the continent because it has an untapped potential but you're right that this losses might not hurt them too much.

[Wind_FURY]

Lehman Brothers went bankrupt with passives of 619B. Evergrande, a Chinese firm with ties to the CCP has admitted an insurmountable debt and has recently hired the same lawyers that prepared Lehman´s case for bankruptcy. 128 banks and 121 societies have claims against the company. The shockwaves may be felt through China and all the Asian region. The direct impact is around 2% of Chinese PIB and may cause more collapses.

Evergrande is a Real State / Construction company which works mostly in China and owns its own bank.

https://www.theguardian.com/world/2021/sep/14/china-property-giant-evergrande-admits-debt-crisis-as-protesters-besiege-hq

Too big to fail is actually the contrary of what the reality is. When you grow too big then it is unexpected for you to keep going with just finances. Amazon or Apple or Tesla can keep on growing, why? Because they can sell stuff forever, specially Amazon and that is why I understand them growing bigger and bigger.

Obviously finance world is different, you could make as much money as you can from there, but eventually when you grow to a level where you have so much money, eventually the profits can't continue forever.

Let's assume that you make 2 billion dollars a year profit, if you keep doing that for 10 years people may consider you not great, they want you to make more and more, and eventually you go into more and more debt to build more and more real estates but eventually you will not find anyone to buy it, it is not a car, it is not a phone, it is a house, people tend to keep their houses and not buy many, most can't afford to, and certainly not in billions. This was basically expected to fail.

I believe you didn’t understand the real meaning/definition of “Too big to fail”. It is a description for a business that has grown too large, and has become very established in the system/economy that it’s failure will be disastrous to the system/economy. The CCP has not currently made an announcement of a bail out, but I believe it has no other solution. Newspapers say Evergrande is not too big too fail. “OK”.

[Lucius]

I would not speculate as to why they did it, but it is only important that they did it, and in fact did us a great service, because someone wanted to admit it or not, China has always been a hidden danger for Bitcoin - communist methods and human freedoms never could function together.

Do you truly believe that? It was a danger to the PRICE of Bitcoin, but Bitcoin was never in real danger from China. They banned it, but did it “die”? Can the CCP censor Bitcoin transactions after the “ban”? Never, and the Honey Badger don’t care. Plus communist methods is why Bitcoin should be used in China.

Although people mostly pay attention only to the price (which is logical because they are only interested in profit), China was a much bigger problem not only because of price manipulation, but also because there were those in the West (especially in the US) who thought that China has too much influence on mining, and that there is a lot of environmental pollution because they mainly use coal.

If none of these factors are present anymore, I think the overall picture that Bitcoin is controlled by China and its dirty industry will start to change. And as for censorship in China, I think they have brought it to the highest possible level, although any intelligent individual may try to be smarter than the system, but most are still afraid to oppose the government.

[Wind_FURY]

I would not speculate as to why they did it, but it is only important that they did it, and in fact did us a great service, because someone wanted to admit it or not, China has always been a hidden danger for Bitcoin - communist methods and human freedoms never could function together.

Do you truly believe that? It was a danger to the PRICE of Bitcoin, but Bitcoin was never in real danger from China. They banned it, but did it “die”? Can the CCP censor Bitcoin transactions after the “ban”? Never, and the Honey Badger don’t care. Plus communist methods is why Bitcoin should be used in China.

Although people mostly pay attention only to the price (which is logical because they are only interested in profit), China was a much bigger problem not only because of price manipulation, but also because there were those in the West (especially in the US) who thought that China has too much influence on mining, and that there is a lot of environmental pollution because they mainly use coal.

I believe we can both agree that because of the design decisions made by the Core developers, China can’t influence Bitcoin whether it has influence on mining or not. BIP-148/UASF proved this.

If none of these factors are present anymore, I think the overall picture that Bitcoin is controlled by China and its dirty industry will start to change. And as for censorship in China, I think they have brought it to the highest possible level, although any intelligent individual may try to be smarter than the system, but most are still afraid to oppose the government.

But Bitcoin is always there, always censorship-resistant, and always waiting to be used. That’s the point.

[SquallLeonhart]

Although people mostly pay attention only to the price (which is logical because they are only interested in profit), China was a much bigger problem not only because of price manipulation, but also because there were those in the West (especially in the US) who thought that China has too much influence on mining, and that there is a lot of environmental pollution because they mainly use coal.

If none of these factors are present anymore, I think the overall picture that Bitcoin is controlled by China and its dirty industry will start to change. And as for censorship in China, I think they have brought it to the highest possible level, although any intelligent individual may try to be smarter than the system, but most are still afraid to oppose the government.

When you live in a dictatorship that would destroy you and all of your family and can make you disappear in a day, you do not have the courage to go against the dictator or people around him. China can ban all of crypto world, not just mining but everything related to crypto, even owning it, if they want to.

However, I do not think that it would be beneficial for them since it would mean losing a lot of money in the nation and giving it to other nations. I still do not understand why they banned mining neither, after all they were mining and making a lot of money, that is beneficial for china but they banned it for some reason. All in all I am quite happy that china doesn't hold too much power, that would be something very scary.

[Sterbens]

I would not speculate as to why they did it, but it is only important that they did it, and in fact did us a great service, because someone wanted to admit it or not, China has always been a hidden danger for Bitcoin - communist methods and human freedoms never could function together.

Do you truly believe that? It was a danger to the PRICE of Bitcoin, but Bitcoin was never in real danger from China. They banned it, but did it “die”? Can the CCP censor Bitcoin transactions after the “ban”? Never, and the Honey Badger don’t care. Plus communist methods is why Bitcoin should be used in China.

Although people mostly pay attention only to the price (which is logical because they are only interested in profit), China was a much bigger problem not only because of price manipulation, but also because there were those in the West (especially in the US) who thought that China has too much influence on mining, and that there is a lot of environmental pollution because they mainly use coal.

If none of these factors are present anymore, I think the overall picture that Bitcoin is controlled by China and its dirty industry will start to change. And as for censorship in China, I think they have brought it to the highest possible level, although any intelligent individual may try to be smarter than the system, but most are still afraid to oppose the government.

Whether true or not, Bitcoin without China will always be fine. Several times we have been lied to about China's influence on Bitcoin, but in fact it is not at all and Bitcoin is free from manipulation of the Chinese system from the start. We shouldn't be fooled by the stuff about China's restrictions on Bitcoin policy. It's all based on the mainstream media deliberately making a fuss in the Bitcoin market. We are still in the distant current without Chinese interference.

[fillippone]

This story is bad, and I think we still have to see the worst.

Apart from all the news you reported here, the thing is EVVE USD bonds are trading at 23/25 cents for a dollar falli further since last week.

Also I would say this is the worst time for the Party to have a bubble pop, right while raising the tension with Washington.

[jaysabi]

It is possible something similar is happening in the united states. Jeff Bezos may have been forced to resign from amazon.

Can you expand on that?

I have searched the internet and I don't see anything. I am quite surprised and I can see many reasons for it not to be so, since the political system of the USA and the USA are essentially different, but maybe if you explain the theory we can still see the logic behind it.

There's nothing to this, Bezos wasn't forced to resign. He resigned voluntarily to spend more time working on his other ventures, of which there are many but the biggest one is probably Blue Origin, his aerospace manufacturing and spaceflight company.  Other ventures Bezos is involved with that he expects to spend more time on are his ownership of the Washington Post and Day 1 Fund.  

Also, Bezos hasn't completely left the company, he's still the executive chairman, which means he will still be involved in the largest decisions at Amazon, he just won't be running the day to day as CEO.

[Lucius]

However, I do not think that it would be beneficial for them since it would mean losing a lot of money in the nation and giving it to other nations. I still do not understand why they banned mining neither, after all they were mining and making a lot of money, that is beneficial for china but they banned it for some reason. All in all I am quite happy that china doesn't hold too much power, that would be something very scary.

Although it seems to you and me that there is a lot of money at stake, this is not really the case when it comes to China. I think that @stompix in some thread calculated how much was actually earned from crypto mining in China, which means block rewards and fees. You need to know that China's GDP is estimated to be as high as $14600.00 billion by the end of this year, and that to them in financial terms all the earnings from cryptocurrencies in any sense mean almost nothing.

[stompix]

I think that @stompix in some thread calculated how much was actually earned from crypto mining in China, which means block rewards and fees. You need to know that China's GDP is estimated to be as high as $14600.00 billion by the end of this year, and that to them in financial terms all the earnings from cryptocurrencies in any sense mean almost nothing.

Wow, you remember things I've had to scratch my head a bit to see some foggy pictures, but yeah, I now remember making that comparison.

If every single mined bitcoin would come back to China, including the fees, and by doing so we take care of the ROI miners have to achieve in order to pay the gear, thus we can ignore the numbers from sales of equipment and all the troubles there (chips are made by TSMC) the numbers would be at around 10 billion. Might sound much but in reality, it's almost nothing for such a country, the much blamed wet markets in China are part of an 18 billion industry of growing  "wildlife" species for food. So, no way to classify it as harmful, it's more like a mosquito bite.

Of course, prices have changed so the number would be at around 16 billion now, if we assume all mining is done in China and that all the fees are net income, still 0.1% of the total GDP.  But that's a rought estimate, mines burn energy, that energy costs coal, which could be exported, (or in case of China not imported), components are made by Taiwanese companies, and the chips are right now the most expensive part of a miner and so on and on. Besides, the coins mined are not owned by the CCP but by private miners, it's possible that Chinese miners haven't paid a dime in tax. Apple earning billions does not equal billions in tax in the government's coffers.

[Lucius]

Wow, you remember things I've had to scratch my head a bit to see some foggy pictures, but yeah, I now remember making that comparison.

My memory still serves me very well, and I hope it stays that way

Of course, prices have changed so the number would be at around 16 billion now, if we assume all mining is done in China and that all the fees are net income, still 0.1% of the total GDP...

I think it’s very important to dispel the myths that some still believe, and that is that China is suffering some significant financial damage because it said NO to Bitcoin or any other cryptocurrency, and the numbers are there to show us that’s exactly the case - $16 billion or 5 times more would not make any difference - nor would the conglomerate in question completely collapse, because China is too powerful to feel it as a significant blow.

I well remember the last crisis that began in 2008 and the years that followed, while the world was looking for straws of salvation, the Chinese went around the world buying everything that could be bought. Some EU countries remember very well who helped them when they asked the IMF for help.

During the European debt crisis, several European countries required the EU and International Monetary Fund bailouts. China assisted Europe by buying billions of euros' worth of junk Eurozone bonds; in particular from Greece, Ireland, Italy, Portugal and Spain. Some analysts suggested China was buying political influence in the EU but China maintains they are building strong trade ties and supporting the European economy so that trade issues can move ahead more smoothly.

[Silberman]

This is also linked to the real estate market. Somehow, i keep hearing about this overheated real estate market in China akin to the Housing bubble which led to the 2008 crisis in USA. I have no love lost for China but at a time when the whole world is struggling, any sort of upheaval in the second largest economy of the world won't do any good to anyone. Especially in the backdrop of the pandemic and all the money printing that went on to support people and businesses out of job.

As far as a bailout is concerned, if the CCP judges that it is important enough to protect investor confidence, they'll do it without doubt. CCP has always supported businesses in one way or other. Most businesses in China are linked to the highest echelons of CCP so it is possible that they will bail it out before the shock can spread.

We are going to have to see how things evolve, we need to remember that a bankruptcy of a company as big as this one can create a domino effect which is exactly what happened with Lehman Brothers, and many of those that were deeply involved in the crisis have been very honest and they claimed the world economy was close to come to a complete halt, so while the circumstances are different I would say the economy is even on a worse shape now than the state it had back then and this could begin a chain reaction of bankruptcies, so it is important to see how this is solved and that it does not have big repercussions to other industries and countries.

[ilovealtcoins]

I have heard this news a few times now. The company's investors also held a protest in front of the company's headquarters.
The company's stock has also dropped about 10 times and shows no sign of stopping.
EverGrand also has many investments in different countries in the real estate sector. If they declare bankruptcy, it could lead to a real estate market crash in Asia.

[kryptqnick]

It's nowhere as bad as Lehman Brothers. In 2008 Lehman had over $600 billion in debt.
13 years later this is $300 billion.

Not saying it's not bad, just not to the scale that the Lehman situation was.

It also goes back to the fact that there is no such thing as 'too big to fail' no matter what country / culture you are dealing with.
Greed and poor management is universal.

-Dave

Lehman Brothers case was way bigger, but this is still significant. Plus, that time the only bad thing was the stock market crashing, and Lehman Brothers filing for bankruptcy was a big part of it. This time there's Covid, and also a big race of economies between China and the US. So while it's not strong enough to trigger a major global crisis, I think it might shift the balance of power enough to reinstate the US dominance, right when China actually had a chance to become more prominent due to dealing with the pandemic very differently from the Western world. It can also still be a big deal in the Asian region overall, and it's a big part of our planet.

[Kakmakr]

Look .. they can say what they want about Bitcoin, but never in the history of Bitcoin has anyone lost that amount of money... like they are doing in these crashes.  MtGox was probably the biggest blow for Bitcoin users, when approximately 850 000 bitcoins belonging to customers and the company went missing and likely stolen, valued at more than $450 million at the time.

No Banks were bankrupted as a result of MtGox... but the Exchange went down and many other exchanges took a huge hit as a result of the price crash. (negative publicity) 

[fiulpro]

Most of the people outside China won't really be affected by this, the people who would be affected are the ones with an investment there or people who do have some ties with the company, for that time being it's a news concerned with the Chinese economy and therefore I do think that we can let this news slide for a while.

Look .. they can say what they want about Bitcoin, but never in the history of Bitcoin has anyone lost that amount of money... like they are doing in these crashes.  MtGox was probably the biggest blow for Bitcoin users, when approximately 850 000 bitcoins belonging to customers and the company went missing and likely stolen, valued at more than $450 million at the time.

No Banks were bankrupted as a result of MtGox... but the Exchange went down and many other exchanges took a huge hit as a result of the price crash. (negative publicity) 

Yeah because there is no such thing as banks in first place when we are talking about bitcoins, it's a 1-1 network and at the same time, people were able to recover if they did hold onto their coins for a lil bit longer.

[fillippone]

Zerohedge posted this Evergrande timeline of events. Quite interesting how early the party seems to be aware of the problems:



https://twitter.com/zerohedge/status/1439654627675414536?s=21