Evergrande situation

[bitgolden]

I would say that China grew way faster than they anticipated and that is why I believe they are living this problem right now. This doesn't mean that they will end up with something worse than USA, but it is obvious that we are seeing something that is building up to be something that is very difficult for a whole nation at least. China is also "helping" underdeveloped nations by building stuff there to make those nations better and then charge for it (business basically) which will be stopped or at least halt for a while, so it will impact some other nations as well.

Long story short this will not be good obviously, but it will not be horrible neither, doubt it would rival 2008 or 2020, it will probably be a temporary crash and then it will go back up and become better later on. Even 2008 got better eventually so I doubt this will matter too much.

[Wind_FURY]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times

should shut the f*ck up, and the Chinese government should deal with the situation.

If there is a domino effect, then the Chinese government will certainly put up a bailout umbrella if it has not already been activated. Evergrande has 300 billion in debt, according to official figures. Part of this can certainly be covered by the assets. The rest would then be no problem for the government to settle. In Europe, there was a much larger bailout in 2010-2014. The problem is rather the shadow banking system, where nobody knows who is involved and whether the debts are in reality much higher. A comparison with Lehman is wrong in my opinion, because the situation is different.

China will produce an “ACT” that makes it “LOOK” like it will not do a bail-out, but it will have no other choice and the CCP will actually do the bail-out. I’m very confident that China’s government will BRRR-print the Yuan on 2022.

[Betwrong]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times

should shut the f*ck up, and the Chinese government should deal with the situation.

If there is a domino effect, then the Chinese government will certainly put up a bailout umbrella if it has not already been activated. Evergrande has 300 billion in debt, according to official figures. Part of this can certainly be covered by the assets. The rest would then be no problem for the government to settle. In Europe, there was a much larger bailout in 2010-2014. The problem is rather the shadow banking system, where nobody knows who is involved and whether the debts are in reality much higher. A comparison with Lehman is wrong in my opinion, because the situation is different.

China will produce an “ACT” that makes it “LOOK” like it will not do a bail-out, but it will have no other choice and the CCP will actually do the bail-out. I’m very confident that China’s government will BRRR-print the Yuan on 2022.

Yep. In fact, Evergrande is too big to fail, indeed, and CCP  knows it. And printing Yuan more than usually maybe will not be necessary. I mean, they are printing it all the time, and in a country that big, it goes almost unnoticeable. That's how people close to power become billionaires in such regimes: they convert newly printed local money to hard currencies before the exchange rate will start declining.

[FanEagle]

It is obvious that this is a problem for China, and yes it will have a bit of impact in other parts of the world but not in the big nations of the west, hence it is not a global issue, it is only an issue for China and all the nations that benefit from China which is just some small nations china helps that's it.

So, I would assume that bitcoin will not be impacted at all and we could ignore it if our nation is not getting too much benefit from them. USA was different because USA had interests all over the world and the moment 2008 happened even Spain, Italy, Greece all got gutted and that is why I believe we should not be comparing the two. I believe China banned crypto at the very right time, just ignore them the way they ignored us.

[alpamar99]

apart from that we never know what is happening in the area because there is a lot of news about China but all come from sources which are indeed very difficult to see the truth because when we look at China it seems like nothing has happened but there are so many problems in it.
There are so many examples of cases that were really covered up by the government there, such as at the beginning of the Covid-19 outbreak, besides that there was news about abandoned real estate there and now news that has happened recently.
we always see news that has been filtered by China itself and news that may be shocking will not come out easily about the current conditions in China.
and it's clear their government is covering it up.

but whatever it is, bitcoin remains a bitcoin that will not be affected by anything even though there is a lot of negative news from china.

[timerland]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.


The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.


Do you think that we can consider this crisis solved or should we really expect another little bearish move?

Crisis not averted, but crypto is going to be completely independent of this anyhow.

We've seen how strongly crypto has rebounded during COVID as well as the Evergrande crisis in the beginning stages.

People will start realizing that fiat economy woes have nothing to do with bitcoin or other decentralzed cryptos, period. There will probably be more defaults but bitcoin is also an asset class of its own.

[Wind_FURY]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times

should shut the f*ck up, and the Chinese government should deal with the situation.

If there is a domino effect, then the Chinese government will certainly put up a bailout umbrella if it has not already been activated. Evergrande has 300 billion in debt, according to official figures. Part of this can certainly be covered by the assets. The rest would then be no problem for the government to settle. In Europe, there was a much larger bailout in 2010-2014. The problem is rather the shadow banking system, where nobody knows who is involved and whether the debts are in reality much higher. A comparison with Lehman is wrong in my opinion, because the situation is different.

China will produce an “ACT” that makes it “LOOK” like it will not do a bail-out, but it will have no other choice and the CCP will actually do the bail-out. I’m very confident that China’s government will BRRR-print the Yuan on 2022.

Yep. In fact, Evergrande is too big to fail, indeed, and CCP  knows it. And printing Yuan more than usually maybe will not be necessary. I mean, they are printing it all the time, and in a country that big, it goes almost unnoticeable. That's how people close to power become billionaires in such regimes: they convert newly printed local money to hard currencies before the exchange rate will start declining.

Or the CCP could have best of both situations, maintain their reputation and save the economy. They let Evergrande crash as a company, but pump money in to save housing projects and developments for the people who already paid for their houses. The CCP could also do what the Bank of Japan did, become the largest owner of their nation’s companies. PRINT MONEY, BUY EVERYTHING.

[SquallLeonhart]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.

The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.

Do you think that we can consider this crisis solved or should we really expect another little bearish move?

I believe the company could still go bankrupt, and CCP should just finish the job and give everyone the houses. I hate companies getting away with stuff and by the looks of it even in a communist dictatorship there could be a bailout, which is not good at all. I hate companies getting away with stuff and people are getting nothing in return.

So, the best way to handle this would be giving everyone the houses they paid for, even if they paid less than what they should so far and not the whole thing, just give people the houses because that is already a good thing for the public, and then let the company bankrupt, call it even and not ask for more debt from the owners. That way you have a company that got away with being bad without paying any debt, a public that has a lot more people with houses and a government that would be applauded for doing it.

[Wind_FURY]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.

The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.

Do you think that we can consider this crisis solved or should we really expect another little bearish move?

I believe the company could still go bankrupt, and CCP should just finish the job and give everyone the houses. I hate companies getting away with stuff and by the looks of it even in a communist dictatorship there could be a bailout, which is not good at all. I hate companies getting away with stuff and people are getting nothing in return.

So, the best way to handle this would be giving everyone the houses they paid for, even if they paid less than what they should so far and not the whole thing, just give people the houses because that is already a good thing for the public, and then let the company bankrupt, call it even and not ask for more debt from the owners. That way you have a company that got away with being bad without paying any debt, a public that has a lot more people with houses and a government that would be applauded for doing it.

I believe the bond holders holding the debt issued by Evergrande would not be the priority of the CCP. The priority would only be those people who already paid, to be getting their houses, which might make the CCP print less Yuan. But would the CCP want an era of economic stagnation? CCP - “PRINT THE MONEY”, BRRR!

[LUCKMCFLY]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.


The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.


Do you think that we can consider this crisis solved or should we really expect another little bearish move?

What in my opinion results from everything China does is that they want to have world attention, they want the world to revolve around them, since the pandemic that came from there has monopolized all the attention, and it is normal, if we take taking into account that after the Second World War there has always been the hegemony of the US dollar, the Chinese have always wanted to dominate the world widely in every way.

 When they talked about the prohibition of crypto, mining, in 2018 it did give a great bearish impact to the market, now in 2021 where it is known that the best world economy is China, because they are the only ones that are very stable economically, want to have control, hegemony and attention for them, it is for this reason that any Chinese attack on bitcoin and cryptocurrencies no longer has any impact, firstly because it is a government that does it, and if we take into account the irreverence of people towards it. government, the dynasties in 2021 no longer have an effect on humanity or money.

[doomloop]

I don’t think crisis is much of a problem in the cryptocurrency market. We have sentence that similar to that take place on they don’t affect the market price in any way at all. Maybe it might have an effect in the Fiat or the economy of that particular country where it took place, but as for cryptocurrency, is it totally different thing. So, there’s no way that is going to have any effect at all.

The price of Bitcoin is already going up so I don’t think we should be expecting any negative impact this time around. That’s it for me, and I strongly believe that is how it’s going to be.

[Wind_FURY]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.


The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.


Do you think that we can consider this crisis solved or should we really expect another little bearish move?

What in my opinion results from everything China does is that they want to have world attention, they want the world to revolve around them, since the pandemic that came from there has monopolized all the attention, and it is normal, if we take taking into account that after the Second World War there has always been the hegemony of the US dollar, the Chinese have always wanted to dominate the world widely in every way.

 When they talked about the prohibition of crypto, mining, in 2018 it did give a great bearish impact to the market, now in 2021 where it is known that the best world economy is China, because they are the only ones that are very stable economically, want to have control, hegemony and attention for them, it is for this reason that any Chinese attack on bitcoin and cryptocurrencies no longer has any impact, firstly because it is a government that does it, and if we take into account the irreverence of people towards it. government, the dynasties in 2021 no longer have an effect on humanity or money.

They want to risk an economic recession, and risk an uprising because of said economic recession because they simply want “World Attention”? I believe not. Obviously it’s because, MANY officials in their bureaucracy have been sleeping behind the wheel.

[Betwrong]

~

Or the CCP could have best of both situations, maintain their reputation and save the economy. They let Evergrande crash as a company, but pump money in to save housing projects and developments for the people who already paid for their houses. The CCP could also do what the Bank of Japan did, become the largest owner of their nation’s companies. PRINT MONEY, BUY EVERYTHING.

Actually it's interesting to what extent this money printing business can expand without causing significant inflation? I mean, we all know that in countries like Zimbabwe and Venezuela the process of depreciation starts developing pretty soon after the money printing press starts working more than usually. But what about countries like the US, China and Japan? Sometimes I think that they can allow themselves to print as much money as they need to deal with an unexpected situation such as Evergrande.

[PrimeNumber7]

Some may find this piece informative.

...

It appears china has an outstanding $8.2 trillion LGFV (local government financing vehicles outstanding) bubble to rival the united states student loan or housing bubbles.
...

My interpretation of this data is quite different. Firstly, the fact that there is debt does not mean there is a bubble. A bubble is created when stuff is bought for the only reason of selling it more expensive to someone else. You may argue that there might be a credit risk, but these loans against vehicles are quite different from loans against houses particularly coming from the gov. which would endure even massive defaults or print a bit of cash.

Local Chinese governments receive a lot of their revenue from selling land for development. Even if Evergrande does not ultimately fail, it will likely slow the rate at which it starts new projects, as will other developers. This will negatively affect local governments' finances in China. Also, the fact that the debt is hidden from the public is problematic because once the debt is discovered, creditors will be more hesitant to lend to local governments. Most government debt is paid off by selling more debt (something similar to refinancing the debt), and if governments are unable to raise more money via the credit markets, it becomes more likely they will default.

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times



should shut the f*ck up, and the Chinese government should deal with the situation.

It is not trivial for the Chinese government to bail out a company as big as Evergrande. The Chinese government cannot issue massive amounts of debt the same way the US government can, and the interest rate it needs to pay is almost twice that of what the US government pays.

There are also political problems with bailing out Evergrande. If Evergande gets bailed out, the government will start to get blamed when Evergrande cannot deliver homes on time.

[MNbag]

It will affect Bitcoin anyway.

Investors would be less likely to buy it, leading to prices falling as a result.

It isn't independent from the rest of the economy, it can be affected by a recession.

[justdimin]

What in my opinion results from everything China does is that they want to have world attention, they want the world to revolve around them, since the pandemic that came from there has monopolized all the attention, and it is normal, if we take taking into account that after the Second World War there has always been the hegemony of the US dollar, the Chinese have always wanted to dominate the world widely in every way.

 When they talked about the prohibition of crypto, mining, in 2018 it did give a great bearish impact to the market, now in 2021 where it is known that the best world economy is China, because they are the only ones that are very stable economically, want to have control, hegemony and attention for them, it is for this reason that any Chinese attack on bitcoin and cryptocurrencies no longer has any impact, firstly because it is a government that does it, and if we take into account the irreverence of people towards it. government, the dynasties in 2021 no longer have an effect on humanity or money.

China will always do something that will help CCP and not directly china. Sure there are times when what benefits CCP also benefits China so it looks like a good thing, but it is 100% obvious that even if it hurts China as a whole, if it benefits CCP they will do it. This is why they banned crypto as well, do you really think that billions of dollars coming into China from other nations somehow hurt china? Of course it did not hurt china, it helped china a ton, at least Chinese people were capable of making much more profit and they were capable of living a great life. Then why did the ruler of China banned something that helped China?

Well, simply because they are only interested in ruling and not interested in making it better. This is why it ended up being something that hurt them instead of something that helped them and they banned it, only because it would weaken the powerful.

[Fortify]

Now we all have seen that Bitcoin reacted really well to the recent events, especially China's cryptos ban and Evergrande's crisis.


The second topic is the one I want to particularly focus on (crypto ban looks ridiculous and useless, so I don't wanna focus on that), because the Chinese central bank warned everybody of a possible "storm" that could occur in these weeks.


Do you think that we can consider this crisis solved or should we really expect another little bearish move?

I think due to the very way the Chinese government is structured a lot of problems are hidden away and buried as deep as possible all along the chain. It does seem like most of the fallout of this Evergrande crisis should be contained within China, although it will make a lot of people very angry because the collateral is millions of people have lost the biggest investment they'll ever make (property). There is also likely to be a domino effect throughout the whole property market because every building related company will now face borrowing and liquidity problems because lenders will be avoiding them for a while. The government is unlikely to bail them out, internal investors seem to be getting priority of any payments due which is going to turn foreign investors off China for a while since that trust is broken.

[davis196]

I agree that the biggest problem of China is the local governments debt,not Evergrande.
However,I think that the central government of China and the PBOC have enough reserves to support the local governments to pay their debts,at least for a while.The reserves aren't that big,the huge crisis with come,when China runs out of it's foreign currency reserves.AFAIK,China owns lots of US government bonds.
They could sell the US bonds and get some cash in order to pay off the debts of the provinces.
The economic growth of China seems like a bubble that will pop some day.I'm sure that the new Great Depression will begin from China,not from the USA.

[Betwrong]

Maybe I'm missing something, but to me it looks like a government bailout is pretty much possible, considering that China's GDP was around 102 trillion Yuan (16 trillion USD) in 2020, and estimated to be even higher this year.

I think this "Chinese Communist Party mouthpiece", the Global Times



should shut the f*ck up, and the Chinese government should deal with the situation.

It is not trivial for the Chinese government to bail out a company as big as Evergrande. The Chinese government cannot issue massive amounts of debt the same way the US government can, and the interest rate it needs to pay is almost twice that of what the US government pays.

Can you say a bit more on this? I'm not that good in economics to know such nuances. I just think that GDP roughly shows the size of an economy. And since China's estimated GDP for this year($16.6 trillion) is huge in comparison to Evergrande's debt, $310 billion, I thought the Chinese government could cope with the situation. But maybe it's not that simple.

There are also political problems with bailing out Evergrande. If Evergande gets bailed out, the government will start to get blamed when Evergrande cannot deliver homes on time.

Also I think if bailed out, Evergrande has low chances of failing to deliver homes on time. But again, it's an opinion of dilettante in economics. So, if you have time please explain.

[beerlover]

I agree that the biggest problem of China is the local governments debt,not Evergrande.
However,I think that the central government of China and the PBOC have enough reserves to support the local governments to pay their debts,at least for a while.The reserves aren't that big,the huge crisis with come,when China runs out of it's foreign currency reserves.AFAIK,China owns lots of US government bonds.
They could sell the US bonds and get some cash in order to pay off the debts of the provinces.
The economic growth of China seems like a bubble that will pop some day.I'm sure that the new Great Depression will begin from China,not from the USA.

I do believe that we should not be considering China as a great power if they fail to keep growing with debt. I mean look at the situation they are in right now, it is obvious that they should be able to grow with the man power they have, and they still fail compared to places that have quarter the amount of people they have with so much more wealth. I believe CCP will eventually fail not because they are not good at finances, but because of human rights problems.

There are other smaller and poorer nations that keep on saying they are willing to work for cheaper and western nations started to listen to them as well which is looking like taking away jobs from China and moving to other smaller nations. This is the real reason why China is losing, because they grew big and everyone is hating how they are treating both their citizens and everyone else so they are looking for other nations.