Not your keys > Evergrande collapse triggers bank run in China

[stompix]

The cluster* of the real estate market seems to be for now a never-ending story that when finally finished will be ten times worse than any real estate crash in history and will grab a lot of both coulpable and innocent all the way.

Country Graden is one foot in the graveyard as per their own release they can't make a payment and their sales are collapsing:
https://www1.hkexnews.hk/listedco/listconews/sehk/2023/1010/2023101000054.pdf

Given China’s property sector has undergone profound adjustments, since the beginning of 2023, the Group’s sales have been under remarkable pressure. Based on the Group’s unaudited operating figures, the Group recorded contracted sales of approximately RMB154.98 billion during the period from January to September 2023, representing a decrease of 43.9% and 65.4%, respectively, compared with the same period in 2022 and
2021. For the month of September 2023, the Group’s contracted sales were approximately RMB6.17 billion, representing a decrease for the sixth consecutive month in 2023 and a decrease of 80.7% and 86.5%, respectively, compared with the same month in 2022 and 2021.

If you have 1/5 of the sales you had during a covid lockdown, then it's safe to assume you're done for, which leads us to probably the same fate as the main actor here Evergrande so expect the same episode to happen again and again

Evergrande, after losing US$66.3 billion in 2022, filing for bankruptcy in the US, seeing its reopened tarde in HK collapse, his workers arrested and so on, is not triggering a bank run!
Of course, the bank run is illegal in China and you're not allowed to tell people there is no money in the bank:

Police in Cangzhou have arrested “many people” suspected of spreading rumors that the bank was suffering a cash crunch because of its exposure to Evergrande, Yicai, a state-owned media outlet, reported on Wednesday, citing an officer deployed at the bank.

“[We urge] financial consumers to make rational judgments and to avoid losing interest on your deposits due to rumors,” according to a photo of the statement posted by the media outlet.

So listen up plebs, are you going to lose your $12 APY in LUNA tokens just because of a rumor  !!!
Ups, my bad, the situation is so damn similar, and the reaction of the "officials" too that I ended up mistaking the two things but that can be forgiven, I assume, as :

You have a bank that used people's money to finance a bankrupt company whose assets are crashing down!
You have a company that used your coins to prop a shitcoin that crashed down having zero value right now!

So before you think of 12% APY a year, of making money with the newly launched copy trading, don't forget, your balance on that exchange is just numbers, as in every bank, just how it was with FTX,seriously, read this topic by o_e_l_e_o  !!!
Proof of reserves? Insurance fund? Best I can do is a random number generator!

Having money in some bank that invests in real estate doesn't mean you own real estate, having coins in an exchange that owns bitcoin doesn't mean you have bitcoins, you only have an IOU that has no value once that exchange is gone!

So, fog god's sake, stop thinking about 5% extra and think more of the 100% you might lose!

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[DeathAngel]

CNN reporting it was a localised bank run so not widespread & nothing to worry about yet.

https://amp.cnn.com/cnn/2023/10/12/economy/china-bank-run-evergrande-intl-hnk/index.html

Clearly the fiat banking system is failing & it’s only a matter of time until it collapses. This is why we bitcoin, obviously self custody is the only way to go.

[stompix]

CNN reporting it was a localised bank run so not widespread & nothing to worry about yet.

When you have police arresting anyone who dares show his face in front of the bank even if he has a bill to pay I too can believe that it was "small".     Posts about the bank are disappearing from every social media allowed in China the instant someone types, of course, everything is under control, nothing to worry! YET!

This is why we bitcoin, obviously self custody is the only way to go.

Exactly, and we have solved the bank run problem also, if there is no money in the bank then there is obviously no bank run, right? 

[DeathAngel]

I have mixed feelings about potential large scale bank runs. If it’s going to happen I would prefer it sooner rather than later. The last thing we need is a COVID style Black Swan at a pinnacle time, for example when the halving is very close or during peak bull run in 2025. If the dominoes will fall then please ASAP so we can recover in time for an epic bull run.

[DrBeer]

the Evergrande story is not over... It is just beginning, and the continuation will be very "loud".
The problem is not that the company itself is essentially bankrupt with a huge amount of debt that cannot be repaid, even with the participation of the state (China does not care about that now). The problem is that the "shutdown" of Evergrande has led to a chain reaction that has affected a huge sector of China's economy. As a result, not only Evergrande, but also a huge number of related companies with millions of jobs are on the verge of collapse. If the situation deteriorates further (which is more likely than its improvement), it will result in new bankruptcies, and possibly entire segments of the economy, millions of unemployed, increased social pressure and social protests. And we are not talking about investors and creditors. The only plus side is that this problem is quite "local" and most likely will not lead to a WORLD crisis, but only a local one

[albert0bsd]

Yes i also have mixed feelings, I just want to said that china old government have the responsibility of this, I mean those that established the ONE child per family policy back in 80's
https://www.britannica.com/topic/one-child-policy

The consequences of this will slow down its economy

[Poker Player]

CNN reporting it was a localised bank run so not widespread & nothing to worry about yet.

https://amp.cnn.com/cnn/2023/10/12/economy/china-bank-run-evergrande-intl-hnk/index.html

Clearly the fiat banking system is failing & it’s only a matter of time until it collapses. This is why we bitcoin, obviously self custody is the only way to go.

Well, I wouldn't be surprised if a major media outlet like CNN is collaborating with the powers that be so that people don't get nervous and run to their bank. Which makes me wonder about the meaning of bank run today. In Europe there are countries, especially in the Nordic countries, where cash has hardly been used for many years. In China the use of cash in 2022 was 20% following a clear downward trajectory over the previous 10 years, so we can assume that by the end of 2023 it will be clearly below 10%.

When all those who boast of not having used cash years ago and pay for everything with their smartwatch go running to the bank in cases like this, what do they expect? To be given cash? Lol. They have contributed to entrench a system in which money is a mere accounting entry that can disappear at any time. What are they complaining about? They can devalue cash by printing it, but if you carry it with you or keep it at home, they can't make it disappear at the click of a button. And the best is coming soon with the CBDCs.

Fortunately we have honorable exceptions, such as Germany, which is the EU country that uses cash the most, and the richest, which I believe may have a slight relation.

[Broly46]

This is one very extreme analogy, but the Luna and FTX are bubble, not some tangible property. Idk why people are so fond of buying intangible IOU, I was shocked people are trading paper commodity in the 2008, I mean what are they thinking about trading a paper oil that they can't even use it to refill their cars, the real oil is the REAL commodity, they are trading to their own demise and voila a crash that is so bad that all the paper commodity and physical commodity get dumped on the market at once, ofc the broker get to keep their sweet commision from the sale lmao? Is it fraud? Who know. I would be damn worry when this Evergrande could begin selling paper property next, to save their bottomline, so are you telling me Evergrande now learn the new trick and selling Virtual Property in the form of NFT??? That would be ground breaking and certainly a Luna and FTX moment of fiasco!

[adaseb]

The Evergrande and Country Garden are no different than the FTX blowup or the 2008 GFC due to the housing market. If it wasn’t for leverage, everybody would of been fine.

But they got greedy and it’s what got them in the end. It’s not only these 2 China developers. Look at how many people are buying real estate to be landlords using money that really isn’t theirs. They basically have properties which have inflated values and use that equity to buy more properties and those properties will have equity and they will buy more and more. Eventually it will all collapse.

[bluebit25]

Yes i also have mixed feelings, I just want to said that china old government have the responsibility of this, I mean those that established the ONE child per family policy back in 80's
https://www.britannica.com/topic/one-child-policy

The consequences of this will slow down its economy

According to your logic, the people responsible are the leaders with unreasonable precision being applied. But I also want to express about the population issue whether that is a factor from the argument you mentioned Population increases > there are many opportunities for labor resources But wait, are they slowing down?

Looking back at what has happened and is happening, more accurately, as I understand it, this contributes to minimizing a number of problems such as lack of food and fuel,... So we shouldn't look at the problem in a certain way. After all, suppressing the lead is bringing more benefits than harm, it's a macro story. And returning to more micro stories about family life itself, try asking again if a household is poor and has too many children, what will be the problem? The timelines and implementation to date are also quite similar to such a context. As for the current economic problem, we have too many things going on, but rather it brings a gloomy atmosphere, from epidemics, wars, energy and food,... it's all there. Many things are harmful to life. Not only does it stop at real estate issues, but it is also obvious when their speed increases too fast like a balloon waiting to burst.

[DrBeer]

Yes i also have mixed feelings, I just want to said that china old government have the responsibility of this, I mean those that established the ONE child per family policy back in 80's
https://www.britannica.com/topic/one-child-policy

The consequences of this will slow down its economy

That's a somewhat controversial statement. I'm not sure that the decline in population growth has caused Evergrande's problems.

I think it's more about the changing mentality of the population and the inflated real estate bubble. The problem here is that this bubble affected not only the real estate market, but also many other market players - banks, building materials manufacturers, service companies, etc.

And the problem of "one family one child" was when it was forced. In recent years, the Chinese themselves have moved away from the concept of "there should be many children", and many people choose the "one family one child" format on their own

[so98nn]

That’s what happen when you give hopes to common peeps and then invest without studying the whole thing. Many of them are not even trying to learn what’s being layered out for them in the near future. All they see is structured documents, well established names and without studying further they just get attracted to it in no time. If we speak about the APY in the crypto sector it’s just worst than that. That’s literally digital asset with simple base of white papers, some Cool looking sites with no utility in reality and yet peeps fall for that. Imagine how much they are looted in presale and post sale of such coins.

They don’t even run a physical company many times. All they have as asset is a laptop in the backyard and programming skills giving out false impression of having million dollar worth company.

From where they gonna payback those millions of dollars in interest. Well what we can say terrifying ways of loosing your money.

[Fortify]

The cluster* of the real estate market seems to be for now a never-ending story that when finally finished will be ten times worse than any real estate crash in history and will grab a lot of both coulpable and innocent all the way.

Country Graden is one foot in the graveyard as per their own release they can't make a payment and their sales are collapsing:
https://www1.hkexnews.hk/listedco/listconews/sehk/2023/1010/2023101000054.pdf

Given China’s property sector has undergone profound adjustments, since the beginning of 2023, the Group’s sales have been under remarkable pressure. Based on the Group’s unaudited operating figures, the Group recorded contracted sales of approximately RMB154.98 billion during the period from January to September 2023, representing a decrease of 43.9% and 65.4%, respectively, compared with the same period in 2022 and
2021. For the month of September 2023, the Group’s contracted sales were approximately RMB6.17 billion, representing a decrease for the sixth consecutive month in 2023 and a decrease of 80.7% and 86.5%, respectively, compared with the same month in 2022 and 2021.

If you have 1/5 of the sales you had during a covid lockdown, then it's safe to assume you're done for, which leads us to probably the same fate as the main actor here Evergrande so expect the same episode to happen again and again

Evergrande, after losing US$66.3 billion in 2022, filing for bankruptcy in the US, seeing its reopened tarde in HK collapse, his workers arrested and so on, is not triggering a bank run!
Of course, the bank run is illegal in China and you're not allowed to tell people there is no money in the bank:

Police in Cangzhou have arrested “many people” suspected of spreading rumors that the bank was suffering a cash crunch because of its exposure to Evergrande, Yicai, a state-owned media outlet, reported on Wednesday, citing an officer deployed at the bank.

“[We urge] financial consumers to make rational judgments and to avoid losing interest on your deposits due to rumors,” according to a photo of the statement posted by the media outlet.

So listen up plebs, are you going to lose your $12 APY in LUNA tokens just because of a rumor  !!!
Ups, my bad, the situation is so damn similar, and the reaction of the "officials" too that I ended up mistaking the two things but that can be forgiven, I assume, as :

You have a bank that used people's money to finance a bankrupt company whose assets are crashing down!
You have a company that used your coins to prop a shitcoin that crashed down having zero value right now!

So before you think of 12% APY a year, of making money with the newly launched copy trading, don't forget, your balance on that exchange is just numbers, as in every bank, just how it was with FTX,seriously, read this topic by o_e_l_e_o  !!!
Proof of reserves? Insurance fund? Best I can do is a random number generator!

Having money in some bank that invests in real estate doesn't mean you own real estate, having coins in an exchange that owns bitcoin doesn't mean you have bitcoins, you only have an IOU that has no value once that exchange is gone!

So, fog god's sake, stop thinking about 5% extra and think more of the 100% you might lose!

As the company is effectively owned by the Chinese government, even though it has "private" elements and was allowed autonomy previously, it will get a crafted support package to cushion the blow where possible. Otherwise a lot of Chinese citizens will be seeing what was their retirement plan go up in smoke. It was unsustainable all along and may have grown out of the control of the ccp by this point. They wish to be infallible but even in the subprime mortgage crisis the US government was pushed to the very brink of disaster with lots of banks in trouble. It will get a rescue, but some people will suffer along the way and a lot of money people thought they had, will be lost.

[davis196]

Having money in some bank that invests in real estate doesn't mean you own real estate, having coins in an exchange that owns bitcoin doesn't mean you have bitcoins, you only have an IOU that has no value once that exchange is gone!

So, fog god's sake, stop thinking about 5% extra and think more of the 100% you might lose!

Your rant should be pointed at all the people in China, who have bank deposits. Depositing money in a bank is like giving a loan to the bank. The bank could manage your money really well and pay you back the loan plus an interest rate, but it can waste the money on failed companies and go bankrupt.
The people in China have faith in their banking system because "the government guarantees everything". AFAIK, this was called a "moral risk".
The people, who bought shitcoins and LUNA tokens knew that their shitcoins aren't guaranteed by any entity, but they still bought them.
The real estate bubble in China is probably the biggest real estate bubble in history(maybe bigger than the US bubble).
I've read an article that China has enough empty apartments for it's entire population, but nobody wants to buy them. I don't know if this is true, though.

[MusaMohamed]

I think people have been given enough time to avoid losing money because of Evergrande in China. The bad story of Evergrande has been known many months and it's only responsibility of people who believe Evergrande will resolve their problems entirely and will return their operations and finance status to normal status.

They lost months to keep their money safely from any bankrun triggers by Evergrande. The Evergrande fiasco is not like flash as Terra and FTX fiascos that all happened within a few days, weeks and those fiascos did not give their victims too much time to run.