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A Highly Obvious Yet Ignored Threat

A holiday topic starting with VOA News. “In the latest sign that corporate debt levels in China pose a threat to the broader economy, Chinese regulators on Friday were forced to halt trading in bonds issued by Evergrande, the country’s second-largest property developer. Concerns that the company will be unable to continue making payments on its obligations prompted a huge sell-off by investors, overwhelming exchanges.”

“The rush to unload bonds issued by the company — some were selling for as little as 26% of their face value — came after a report from Bloomberg that said two major trust companies that have made large loans to Evergrande had demanded immediate repayment. The crisis at Evergrande comes just days after another major Chinese firm, China Huarong Asset Management, released a long-delayed earnings report showing it had lost $15.9 billion last year and that its debt-to-equity ratio at one point totaled an eye-popping 1,333%.”

“The problem of unsustainable debt is not limited to huge firms like Evergrande and Huarong. In both 2019 and 2020, Chinese firms defaulted on more than $20 billion in debt, and analysts believe that 2021 is on pace to set a new record.”

“‘The Chinese economy has been suffering from excessive non-financial corporate debt for a long time,’ said Tianlei Huang, a research fellow at the Peterson Institute for International Economics. ‘As a result, China has a serious zombie problem. Across the country, there are probably tens of thousands zombie firms that are persistently making losses but kept alive only by continuous bank credit and government subsidies.'”

From Reuters. “Bonds issued by indebted developer China Evergrande Group slumped on Monday after a ratings downgrade led to restrictions on their use as collateral, prompting China’s stock exchanges to halt trade. The Shanghai Stock Exchange said in a statement that it had temporarily suspended trading in China Evergrande Group’s 6.98% July 2022 corporate bond following ‘abnormal fluctuations.’ The exchange had also suspended trading in the bond on Friday.”

“On Friday, China Securities Depository and Clearing Co. (CSDC) reduced the ‘conversion ratio’ of the July 2022 bond to zero, effective Sept. 7. Other Evergrande bonds were not included in CSDC’s table of conversion ratios on Friday as they no longer qualified for inclusion. The conversion ratio determines leverage limits for repo financing given a specific bond pledged as collateral. CSDC is owned by the Shanghai and Shenzhen stock exchanges.”

“A director at a local brokerage said that the reduction in the conversion ratio was a ‘grey rhino’ – a highly obvious yet ignored threat. ‘It was bound to happen.'”

The Sydney Morning Herald. “The elephant in the global room is China’s ferocious property squeeze. Xi Jinping is deliberately breaking the back of the world’s biggest financial bubble. The Chinese economy already has one foot in recession – by its own cyclical standards – and is heading for a hard-landing over the next few months as construction is starved of credit.”

‘Markets should be prepared for what could be a much worse-than-expected growth slowdown, and potential stock market turmoil,’ said Ting Lu, Nomura’s chief China economist. The scale of China’s cement addiction is eye-watering. ‘Half the world’s cranes are in China. We’re talking about 50 per cent of the global construction business,’ he said.”

“Home building and property make up 17 per cent of Chinese GDP, including furniture and appliances. The sector also generates 44 per cent of local government revenues through land sales and fees, injecting $US1.3 trillion ($1.8 trillion) a year into the economy as quasi-fiscal spending. All told, property makes up a quarter of the Chinese economy, three times the relative weighting of America’s extreme bubble in 2007.”

“Xi Jinping’s assault on property should not be confused with the stop-go cycles of the last quarter century, a form of Keynesian fine-tuning with ‘Chinese characteristics’ that has each time prevented economic slowdowns from going too far – at the cost of worsening debt ratios. The Communist Party at last seems determined to lance the boil. But Xi’s petulant shake-up of the economy is also an ideological repudiation of the Deng Xiaoping formula credited with lifting the country out of poverty. His ‘common prosperity’ campaign looks all too like a neo-Maoist purge.”

“The revolutionary mood was made all clear this week in a WeChat blog known as the ‘Li Guangman Ice Point Commentary.’ His diatribe was reprinted across the state-run media with the clear blessing of the regime. ‘Everyone can feel that a profound change is taking place,’ he stated, proclaiming an end to China’s love affair with Western culture and ‘return to the essence of socialism.’ It was framed as a fight to the death with the West, the unvarnished Xi doctrine.”

“The Party has concluded that the house price spiral is triply corrosive: it is a financial black hole; it is the chief cause of cancerous inequality; and it is a strategic threat through the demographic channel. E-house China Research says the ratio of prices to average incomes in Shenzhen has reached 43.5. Top party officials have been sacked for allowing this to happen. Local government bosses everywhere now know that they will be punished for property booms and rewarded for austerity.”

From Global News. “How did Canada’s crippling housing woes come to be in the first place? While there is no single or simple explanation, here’s a look at some of the main factors experts point to when explaining the country’s housing crisis. Economists have long pointed to low interest rates as an important factor behind Canada’s home-price boom. Another hot topic when it comes to housing is the issue of using residential real estate as an investment rather than a place to live.”

“Another concern is about investors leaving homes empty or turning them into short-term rentals. When Andy Yan, director of Simon Fraser University’s City Program, analyzed 2016 census data, he found that Metro Vancouver had more than 65,000 homes that were either lying empty or occupied for only a short period of the year, more than double the number of empty homes in 2001.”

“Yet another factor exacerbating Canada’s housing crisis is money laundering, some analyses suggest. Real estate lends itself well to money laundering, says James Cohen, executive director of Transparency International Canada. For one, real estate purchases are a way to launder large sums of dirty money. And when real estate goes up in value, it becomes an even better deal for criminals, Cohen adds. Organized crime across the world uses real estate to launder money, but Canada’s pristine international reputation and lax anti-money laundering regime have made it an especially attractive destination for crooks looking for a place to park their funds, Cohen says.”

The Globe and Mail. “An internal Canada Revenue Agency audit concluded 25 years ago that wealthy new immigrants were buying up most of the priciest houses taken from a sample in and around Vancouver while declaring poverty on their tax returns. But the report was not made public until a five-year access-to-information battle concluded recently.”

“Housing and immigration academics say the study could have warned the public about the scale of foreign money being parked in Metro Vancouver’s residential real estate – decades before the provincial government began taking meaningful action to slow this trend. Vancouver lawyer Richard Kurland, who has been helping international clients immigrate to B.C. for 25 years, said the analysis proves the CRA failed to catch those hiding their global income while competing for homes on Canada’s West Coast.”

“‘They knew it was happening and did nothing, so the bleeding continued, taxes were not paid, property was subject to speculation and the end result [is] people in Vancouver are paying many more times than they have to for residential property because the CRA did nothing when it was warned by its own employees about what was going on,’ he said.”

From Curbed New York. “In March 2020, Steven Jiang, who lives in Ningbo, a coastal city in Southeast China, was thinking of buying a house in New York City. The father of two, who made a good living as the owner of a transportation company, wanted to do what many upper-class Chinese parents have: He planned to move his family to the U.S. in a few years so his preteen daughters could attend American boarding schools. So he contacted a New York City broker whom a friend had introduced him to before the pandemic.”

“But that summer, the friend, who had lived in New York for two years, fled back to China. He told Jiang it was prompted by what seemed to be a losing war against the virus in the U.S., the riots accompanying the Black Lives Matter protests, and the rise in violent attacks on Asian Americans. Now Jiang has postponed his plans to buy in the city. ‘The pandemic has revealed a lot of negative characteristics about the U.S. that I hadn’t realized before,’ he said.”

“For the past six years, house hunters like Jiang have made China the top international source of U.S. home buyers. But this year, the Chinese dropped to third place, after Canadians and Mexicans, according to the annual survey of foreign home purchases released by the National Association of Realtors (NAR).”

“Although New York is still one of the top three locations in the U.S. for Chinese buyers, the real-estate business is taking note of their waning interest. ‘I had many potential clients at the beginning of the pandemic, and then, they all dropped off,’ said Chloe Ren, founder of the Chloe Ren Group, a high-end-properties agency in New York that specializes in Chinese buyers. While the anti-immigrant rhetoric of the Trump era and pandemic travel restrictions discouraged foreign buyers in general (the NAR survey showed that the proportion of foreign buyers dipped by 31 percent last year).”

“Fearing that Chinese buyers will be missing for some time, some developers have changed tactics. Strategic Capital, an affiliate of a Chinese government corporation, along with American developers Cape Advisors and Forum Absolute, initially promoted Greenwich West, a 169-unit luxury condo in Greenwich Village, to Chinese buyers in 2018. But it has completely focused on selling to American residents ever since. This strategy paid off, with half of the building expected to be sold mainly to locals by the end of the summer (only ten units sold to Chinese buyers).”

“‘We are a Chinese company. We understand the Asian buying market,’ said Phillip Gesue, the chief development officer for Strategic Capital. ‘But at the end of the day, this project is really a Soho–Tribeca–West Village project.’ He doesn’t expect buyers from China to come back to the New York market anytime soon. ‘That’s over,’ Gesue said.”

The Standard Examiner in Utah. “Lenders accused by Summit Powder Mountain of defrauding the resort have alleged in turn that the Utah development is in clear project loan default and is taking unfair advantage of foreign investors. At issue is Summit Village, the planned centerpiece of a high-end resort expansion meant to attract corporate titans, big thinkers, entertainers and other A-list people.”

“Summit Mountain Holding Group, created by the founders of the Summit Series when they bought the former locally owned ski resort, began a $207 million project in 2016 to build Summit Village. The venue could include commercial, restaurant and retail spaces, some high-density housing such as condos or town houses, plus hotel and event space.”

“Summit on Aug. 4 sued two lender groups, Summit Village Development Lender 1 and Grand Canyon Development Holdings 3, in U.S. District Court in Salt Lake City, alleging they failed to deliver on a $120 million loan package and committed fraud in doing so. The suit came two weeks after the lenders filed a notice of loan default against Summit. In a response to the suit filed Aug. 26, the lenders said the $120 million loan matured on June 28, so they commenced ‘a non-judicial foreclosure of the mortgaged property to take over the unfinished project.'”

“The lender entities say they are made up of 81 Chinese nationals who, by contributing to U.S.-based projects under the federal EB-5 program, may acquire permanent green cards. An individual must invest $500,000 in a U.S. project that creates jobs. Investors are ‘in pursuit of the American dream’ and the attendant visa and they expect only nominal profits, the lawsuit response said.”

“The 81 investors ‘are seeking to leave the People’s Republic of China for a better life in America,’ and their investment helped create new jobs, the document said. Summit Powder Mountain, on the other hand, it said, ‘is a high-end property developer constructing a luxury ski resort for several hundreds of millions of dollars and seeking to populate it with some of the world’s celebrities, millionaires, and billionaires.'”

“The lenders say the requirements of the loan package are unambiguous and that Summit’s suit ‘is a desperate effort to avoid its absolute, unconditional, and irrevocable obligations.’ In the suit, Summit alleged the lenders raised the $120 million — aided by Summit’s securing an appearance at an investors’ event by basketball star Kobe Bryant — but spent most of the sum on other projects. ‘Because the borrower was relying on those funds to complete Summit Village, the borrower was never able to do so,’ the suit said.”

This Post Has 88 Comments
  1. ‘Across the country, there are probably tens of thousands zombie firms that are persistently making losses but kept alive only by continuous bank credit and government subsidies’

    Eat yer crowz Dan.

  2. ‘constructing a luxury ski resort for several hundreds of millions of dollars and seeking to populate it with some of the world’s celebrities, millionaires, and billionaires’

    Ha ha, they saw these clowns coming a mile away. Probably didn’t mention this rubber ball bouncer has been dead for a long time.

  3. ‘The pandemic has revealed a lot of negative characteristics about the U.S. that I hadn’t realized before’

    Yeah, like NYC real estate sinking like a turd in a well?

    Oh does the Curbed article bring back a$$ pounding of Xi-mas pasts.

    ‘It was just over a decade ago, in 2009, when the mere presence of Chinese home buyers was an event unto itself. When SouFun, a major real-estate internet portal in China, brought 21 Chinese billionaires on a house-hunting tour throughout the U.S., they visited six cities in a ten-day blitz, searching for bargains left behind by the 2008 financial crisis, and were hounded by reporters on every leg of their trip.’

    ‘The buying spree really picked up in 2014, when the U.S. began granting ten-year tourist visas to Chinese citizens instead of one-year visas. Meanwhile, Chinese developers and investors made headlines purchasing marquee buildings in New York, like Fosun’s $725 million purchase of One Chase Manhattan Plaza in 2013 and Anbang’s $1.95 billion takeover of the Waldorf Astoria in 2015, a record high for an American hotel. But when Beijing tightened its restrictions on money going out of the country at the end of 2016, Chinese developers began to sell off their properties. Others were forced to default on their loans and faced foreclosure.’

    ‘Still, until COVID hit the U.S., individual Chinese buyers found ways to bypass the currency curbs, and they spent $11.5 billion purchasing 18,400 homes in 2019, more than buyers from any other country. Unlike the pioneers in the early 2010s, who would spend $10 million or more in cash on a beacon property to raise their social status, the buyers in this current wave are more likely to be part of the global elite, people who have studied in the U.S. and may be working as executives of Chinese companies listed in the stock market here, said Daniel Chang, head of Asia for the Field Team at Sotheby’s International Realty. For them, an American home is less a status symbol than a practical investment. But last year’s events and unrest has tamped down a lot of that enthusiasm.’

    ‘hounded by reporters on every leg of their trip’

    Yes, the globalist rags ate that sh$t up with a spoon. Right Bloomberg? Wa happened to my safe deposit box in the sky?

    ‘it’s clear that Chinese developers and home buyers both have transformed Chinese immigrant neighborhoods in New York like Flushing, Manhattan Chinatown, and Sunset Park with luxury towers, malls, and other projects. What resulted, she said, was “hypergentrification.” “One day Prince Street just had mom-and-pop noodle storefronts, and the next day it was brand-new upscale businesses that sold a lot of fancy bubble teas and pastries, and the affordable noodle shops were gone,” said Hum. “It feels like this is part of the development vision — that Flushing is going to cater to a global elite.”

    Day of the rope is coming.

    1. My old neighborhood of Elmhurst, Queens was a mix of Italians, Germans, Irish, Cubans, Puerto Ricans, Colombians, Greeks and Ecuadorians. Now you have to speak Chinese to ask anyone a question.

  4. ‘The revolutionary mood was made all clear this week in a WeChat blog known as the ‘Li Guangman Ice Point Commentary.’ His diatribe was reprinted across the state-run media with the clear blessing of the regime. ‘Everyone can feel that a profound change is taking place,’ he stated, proclaiming an end to China’s love affair with Western culture and ‘return to the essence of socialism.’ It was framed as a fight to the death with the West, the unvarnished Xi doctrine’

    This is actually a huge development, and it wasn’t just a blog post. Check out this 25 minute video from those guys who made the motorcycle/ghost cities videos a few years ago.

    Oh dear…

    Did China just Declare WAR?

    https://www.bitchute.com/video/Z0a9Opw6AQ0Q/

  5. Bubble lancing, Communist boss style…ya gotta admire Xi for taking on the property mania in a way that no American president ever would.

    “The Party has concluded that the house price spiral is triply corrosive: it is a financial black hole; it is the chief cause of cancerous inequality; and it is a strategic threat through the demographic channel. E-house China Research says the ratio of prices to average incomes in Shenzhen has reached 43.5. Top party officials have been sacked for allowing this to happen. Local government bosses everywhere now know that they will be punished for property booms and rewarded for austerity.”

  6. His ‘common prosperity’ campaign looks all too like a neo-Maoist purge.”

    The question is when not if a revived Red China is going to expropriate all the manufacturing facilities U.S. companies like Apple set up in the PRC.

    1. All manufacturing faculties in the PRC are 51% or more owned by the Chinese. Apple owns zero facilities in the country. It’s never been allowed for a foreign devil to own a factory outright, so most can be nationalized without much of a hiccup. The foreigners pay contracts for the Chinese the manufacture, so the Chinese can simply refuse to issue new contracts next quarter.

  7. ‘The problem of unsustainable debt is not limited to huge firms like Evergrande and Huarong. In both 2019 and 2020, Chinese firms defaulted on more than $20 billion in debt, and analysts believe that 2021 is on pace to set a new record’

    Remember when the first default came and went? “Pooh bear won’t let a Chinese company default!” the globalist rags said. Now they’re dropping like fake actors in a phony CCP death video. The SMH has some globalist scum saying the same thing. Yer fooked Australia. Hitchin’ yer stars to a commie sh$t hole doesn’t look so good now.

        1. “Canada: Angry Canadians Give Trudeau Double Barrel Middle Finger Salute”

          He will probably get 20% of the vote and win in a landslide.

          1. Of course there is/was a virus. It’s the seasonal flu.

            The hoax is they rebranded the seasonal flu and created a pandemic out of it using bogus PCR tests. It’s that simple.

          2. rebranded the seasonal flu

            So people are just pulling 29,903 base pairs with coding regions out of their a$$? 👌🙄

          3. Initial numbers may have been inflated to declare a pandemic but the biggest “hoax” has been the vastly overstated severity of the disease to justify authoritarian countermeasures.

          4. If you believe that SARS-CoV-2 is just a rebranded flu, an influenza virus rather than coronavirus, you’re ignoring a ton of evidence showing gain-of-function research at WIV to create a bioweapon.

  8. Who will keep the U.S. bubble aloft, now that Chinese investors are history?

    “‘We are a Chinese company. We understand the Asian buying market,’ said Phillip Gesue, the chief development officer for Strategic Capital. ‘But at the end of the day, this project is really a Soho–Tribeca–West Village project.’ He doesn’t expect buyers from China to come back to the New York market anytime soon. ‘That’s over,’ Gesue said.”

    1. Gesue: gotta keep dancing ’cause the music is still playing. checking the weather vane frequently to see which way the financial wind blows.

    2. On the I-15 in Provo today I saw a billboard offering 2.56% mortgages 30 year fixed. That should keep it going, it’s like free money!

  9. ‘Everyone can feel that a profound change is taking place,’ he stated, proclaiming an end to China’s love affair with Western culture and ‘return to the essence of socialism.’

    A parallel profound change is taking place in the U.S., where the CCP’s junior partners in the Democratic Party are implementing their globalist bankrollers’ plans for the demolition of the last vestiges of western culture, and the imposition of an alien ideology called socialism.

  10. The topic of realtors came up on yoootooob…… one said, “Truly the most worthless self important people in the country, how they’ve survived this long has to be a grand conspiracy.”

    🤣🤣🤣

    1. It is a grand conspiracy. That’s what monopolies are. The overpaid idiots attach themselves by way of monopoly and a well oiled machine of cheaters barnacles and fraudsters. ‘Every closing is a crime scene.’

  11. “Bonds issued by indebted developer China Evergrande Group slumped on Monday after a ratings downgrade led to restrictions on their use as collateral, prompting China’s stock exchanges to halt trade.

    Shirley this is a one-off and the rest of China’s real estate sector is thriving with manageable and prudent debt burdens. I mean, it’s not like we’re going to see a panicked stampede for the exits by bond holders for other deeply indebted developers, right? ‘Cause that would be, like, China’s Lehman Moment.

    Oh dear….

    Er…right?

    1. I’m advising the horde of rainbow umbrella carts, selling syrupy snow cones (and god knows what else) here in greater Sacramento to relocate to Chinatown in SF and NY, where selling pots and pans to pissed-off Asians to bang will make them wealthy, like dry goods to gold miners.

  12. E-house China Research says the ratio of prices to average incomes in Shenzhen has reached 43.5. Top party officials have been sacked for allowing this to happen.

    Everybody who allowed and enabled this to happen should’ve been taken out and shot years ago.

  13. The State Department is probably the most “woke” and Democrat-subverted of all the U.S. bureaucracies. Unsurprisingly, in times of crisis, their utter incompetence is on full display.

    ‘If one life is lost, the blood is on White House hands’: Fury at State Department for ‘delaying six flights out of Afghanistan carrying more than 100 US citizens’

    https://www.dailymail.co.uk/news/article-9961433/State-Department-accused-blocking-1-000-people-including-Americans-leaving-Afghanistan.html

  14. “An internal Canada Revenue Agency audit concluded 25 years ago that wealthy new immigrants were buying up most of the priciest houses taken from a sample in and around Vancouver while declaring poverty on their tax returns.

    These “wealthy new immigrants,” like the globalists and their Quislings who facilitated their entry into Canada, have no loyalty whatsoever to their new home or its unique heritage. Like the globalists themselves, they are simply parasites looking for a new host.

  15. Today is Monday, September 6th and Joe Biden is not the legitimately elected president of the United States.

    The 2020 election was stolen.

    1. Love the rebellion against the fraudulent Panademic .
      I just don’t get how fake news with censorship can get away with this fraudulent deception , that has resulted in killing a lot of people.
      And the Government with the health Authorities in on this epic Medical fraud , with Big Monopoly Corporations being in collusion on this assault on the globe.
      I can’t believe that its taken this long for rebellion against the scam to get going. I think when they started to go after the children , who didn’t need the vaccine ,was when people started to draw a line.
      But its not out of the realm of possible that the invisible enemy Covid 19 was just computer simulated BS. Wouldn’t put it pass them to throw out some respiratory poison here and there.

      A bio weapon released might have some limitations that we aren’t aware of. Because even if you released one how can you be assured that it goes global. And this Panademic just went way to fast for believable . And the mutations are way to fast also.

          1. Ok. these people are major fraudsters. I just found out if you die within 14 days of getting the jab they are counting that death as unvaccinated.

            They just make up the rules as they go along. Disgusting fraud to hide the deaths occurring and blame it on the unvaccinated. These are criminals.

          2. Hi Ben, bitchute videos are nice, but here’s the actual data for West Virginia:

            All numbers are the total since the start of vaccination (12/14/2020 – 9/6/2021):
            Cases: 133,798, of which 6471 are breakthrough
            Deaths: 2048, of which 84 are breakthrough

            https://dhhr.wv.gov/COVID-19/Pages/default.aspx

            The link even has a nice graph showing the disparity between vaccinated and unvaccinated. The 26%(?) increase is deaths is probably due to a direct increase in cases as Delta itself spreads, regardless of vaccination status.

            Wiz, YOU are the one making things up as you go along.
            It is WELL known that immunity is not in place until 14 days after the jab. That rule has been in place from the very beginning, not “as they go along.” Don’t believe me? Here is a paper measuring antibody response in the days after the first jab.* Look at the Figures 1a 1b and 1c and you can clearly see the 14-day delay:

            https://www.nature.com/articles/s41564-021-00947-3

            And by the way, it takes ~21 days from infection to death. So if you die within 14 days of the jab, then you were infected before the jab, i.e. while you were still unvaccinated. Sorry, I know you like your fraud, but it isn’t here.

            ——————
            *This data was taken pre-Delta. The first shot provided quite a bit of protection against Alpha variant. Clinical data for Delta is showing that immunity to Delta does not kick in sufficiently until after the second jab.

      1. Hint: If there was a REAL pandemic you could walk anywhere and here people coughing and being sick.

        You would also have reporters geared up in front of all the hospitals as the ambulances came in.

        Nope.

        Today, walk into any large crowded space and sit and watch people for 10 minutes. Listen for sick people or people who might be sick. Go to a hospital parking lot and watch.

        No pandemic.

        1. oxide,
          Your assuming that the people that were vaccinated , but died within 14 days died of Covid, rather than a adverse reaction to the jab.

          If they were being honest they would called them the vaccinated that died within 14 days of vaccination and list specifically what they died from. Can’t believe people dying within 14 days of jab all died of Covid because they were infected before, or got infected with Covid during the 14 day period.
          Lots of posts of elderly people in nursing homes dying soon after the jab. So, the hospital was listing everything a Covid death from the beginning of this Pandemic, and you throw around the data like its reliable .

          tj posted a tape below of this cover up of vaccine deaths that I referred to in my post. At least put these people who died so soon after getting vaccination in a separate category so the data isn’t confused.
          Also, lots of posts on a massive denial of deaths and adverse reactions to the jab by the Medical Cartel, to the point of gaslighting patients injured.
          I’m just amazed that you view me as the liar, when the data is fixed, the books are cooked, the system is rigged , to get the vaccine.
          So, go ahead , believe Dr Fauci, and all the mickied data and take 5 booster shots a year .
          Actually the reason I argue with you is I don’t want you to take booster shots . But its your life.

          1. I haven’t decided yet if I’ll get a booster. There is no evidence yet of J&J immunity waning, or Moderna either. J&J’s initial data is that a booster is a nice-to-have, but not a need-to-have.

  16. A holiday topic starting with VOA News. “In the latest sign that corporate debt levels in China pose a threat to the broader economy, Chinese regulators on Friday were forced to halt trading in bonds issued by Evergrande, the country’s second-largest property developer. Concerns that the company will be unable to continue making payments on its obligations prompted a huge sell-off by investors, overwhelming exchanges.

    The rush to unload bonds issued by the company — some were selling for as little as 26% of their face value [26 cents on the dollar, or whatever that is in Chinese currency]— came after a report from Bloomberg that said two major trust companies that have made large loans to Evergrande had demanded immediate repayment. The crisis at Evergrande comes just days after another major Chinese firm, China Huarong Asset Management, released a long-delayed earnings report showing it had lost $15.9 billion last year and that its debt-to-equity ratio at one point totaled an eye-popping 1,333%.

    – That sounds impossibly high, but it’s only a 13.3:1 leverage ratio, and so fairly typical. For example, if someone “bought” a house and put down only 5%, then that’s a 19:1 leverage ratio. This ignores their FICO score, but if only 5% down or less, then likely subprime. 20% down would only be a 4:1 leverage ratio (80% LTV). Anything close to 10:1 or more is asking for trouble, sooner or later, IMHO, and yet this was encouraged in the name of “growth.”

    The problem of unsustainable debt is not limited to huge firms like Evergrande and Huarong. In both 2019 and 2020, Chinese firms defaulted on more than $20 billion in debt, and analysts believe that 2021 is on pace to set a new record.

    The Chinese economy has been suffering from excessive non-financial corporate debt for a long time,’ said Tianlei Huang, a research fellow at the Peterson Institute for International Economics. ‘As a result, China has a serious zombie problem. Across the country, there are probably tens of thousands zombie firms that are persistently making losses but kept alive only by continuous bank credit and government subsidies.‘”

    – For years China has been mocking and scolding the West because of the very same problems. The “decadent” West they said, when it’s really a case of “the pot calling the kettle black.”

    – However, China largely followed the same economic model of debt-financed “prosperity,” since they tend to copy everything from the West, seemingly without regard for long-term impacts and efficacy. They (just now) realized (too late) that Keynesian economics requires reversing the easy money policies during expansions. This key point has also been ignored by Western central banks. Oops! My theory is that centrally-planned, command-and-control economies are doomed to failure, and for the same reasons as any Socialist system.

    – One can largely substitute “U.S.” for “China” in this article and not be far wrong, since they’re both following Keynesian economic theory, which can be seen by even the most casual observer as a dismal failure. The current state of over-indebted corporations, governments, citizens, zombie companies, State-protected companies and entities, erosion of free markets and personal freedoms is a global phenomenon. The inevitable unwind will be epic, since bubble-nomics is ultimately deflationary as all asset bubbles pop, and the huge steaming pile of debt is defaulted on, businesses go BK, and unemployment rises. The mother of all bubbles (MOAB). “Enjoy” the inflation for now.

    – I think we’ll soon see the return of moral hazard and price discovery on a global scale. I’m personally keeping ample supplies of popcorn and (Colorado) craft beer in reserve as this slow-motion train wreck continues to unfold.

  17. Where is AlbuquerqueDan when you are struggling to find the silver lining to the dark cloud?

    “The Chinese economy already has one foot in recession – by its own cyclical standards – and is heading for a hard-landing over the next few months as construction is starved of credit.”

  18. time for this keyboard commando to get & about today. heck, whats a little smoke? buck-up!
    the annual sidewalk chalk artists at fremont park in sacramento is a favorite: just incredible talent!!

    its too bad that, like a sand castle, the vivid creations are short lived.

    carpe’ diem

  19. The lines are blurring between the Democrats – a criminal enterprise masquerading as a political party – and their core constituency of criminals and convicted felons. Now that they’ve mastered the art of large-scale electoral fraud, with the complicity of the corrupt institutions that are supposed to prevent such things, the skies the limit when it comes to the nexus of crime and governance.

    From lockup to landslide: meet DC’s first leader elected from jail

    https://www.france24.com/en/live-news/20210906-from-lockup-to-landslide-meet-dc-s-first-leader-elected-from-jail

    A few miles from the gleaming sandstone porticos and colonnades of the White House, Washington’s most unlikely elected official has an executive office of his own — a cell in the District of Columbia Jail.

    Joel Caston — convicted for murder as a teenager a quarter-century ago — is finding redemption through politics after becoming the first prisoner in the US capital ever to be elected to public office.

    1. “The Chinese economy already has one foot in recession – by its own cyclical standards – and is heading for a hard-landing over the next few months as construction is starved of credit.”

      Wait…I assume he’s a felon..so can’t vote, can’t own a gun? But can run for office???

  20. Just finished the Florida Contractor’s Guide to Federal & State Compliance (CILB# 0612871) 2 hours of my life I will never get back compliance course and test and good times were had by all.

    I know you have all been sitting on the edge of your seat to find out that it’s the Walsh-Healey Public Contracts Act that requires payment of prevailing wages on federal government construction projects not to mention you must file Form 2553 with the IRS to request designation as an “S” corporation, so there you go.

    Now if you will excuse me, the Home Automation, Surveillance and Emergency Power (CILB# 0613078) 1 hour continuing education course that I will never use in this lifetime awaits.

    1. Excellent.

      I’ll be taking my Colorado journeyman electrician’s license test in a few months, then will be required to take 24 hours of continuing education every three years as long as I’m working and keeping my license active.

      NEC Article 250 (grounding and bonding) is the most challenging part to study for. But it is kinda important, as the whole purpose of grounding and bonding is that people don’t get electrocuted and/or the building doesn’t catch on fire 🙁

      1. “I’ll be taking my Colorado journeyman electrician’s license test in a few months,”

        I know you will do well but I’ll wish you luck anyway.

  21. In a possible signal that tides are turning at the long-running “The Howard Stern Show,” two longtime staffers — Gary Dell’Abate and Ronnie Mund — have found buyers for their tri-state-area homes, all but confirming the buzz that they will not be returning to the show’s SiriusXM studio in New York City when offices are expected to reopen after Labor Day.

    https://nypost.com/2021/07/16/howard-stern-staffers-score-buyers-for-homes-amid-nyc-exits/

  22. This isn’t “gun violence.” This is vibrants being vibrants, because they can caper with impunity in Democrat-Bolshevik malgoverned cities where law and order has become a joke.

    Bloody Labor Day weekend: More than 68 people are shot across the nation including boy, 4, who was killed as Democrat run cities see spike in violence – and it’s not over yet

    https://www.dailymail.co.uk/news/article-9963069/Bloody-Labor-Day-weekend-68-people-shot-nation.html

  23. This is the backup forum hosted on the Dot Win site for the now cancelled (as of last week) sub-Reddit NoNewNormal:

    https://communities.win/c/NoNewNormal

    It’s not as active yet as it was on Reddit, but it will grow in time. Many people don’t learn about alternatives to censored platforms until someone already using them makes a point to go out of their way and promote them.

    Bitchute, Parler, all the Dot Win sites, et cetera.

    Let’s stop giving clicks and ad revenue to globalists 🙂

    1. As an example, a thread titled “I pledge to NEVER spend another dime at ANY BUSINESS that violates anyone’s right to health/medical privacy.”

      https://communities.win/c/NoNewNormal/p/12kFdqiML6/i-pledge-to-never-spend-another-/c

      How would this topic be treated (if even allowed to post) on Reddit, Facebook, Twitter, et cetera?

      And this is how we win. One person at a time stops watching NFL “games” in which the game is just incidental to the woke propaganda. Another stops paying money to see Hollywood franchise comic/superhero movies produced and directed by known child rapists (i.e. over half of Hollywood). The cords are cut and money stops flowing via subscriptions to any and all pay-for-content media.

      We starve them. Because we know they hate us and want us and our entire families dead, exterminated, genocided (see also: basically all corporate media June 2015 to January 2021). We can starve them just by choosing to NOT GIVE THEM ANY MONEY.

      Globalists only gonna globe until we stop them from globing 🙁

      1. Beautiful. Just beautiful. I started disconnecting last April after waking up.

        Magazines gone. Woke sport and Movies gone.

        Want me to wear a mask? I won’t go to your store. Vaxx passports at the gym? I’ll take walks outside and life weights at home. Need to BOTH in my local liberal cesspoll (proof of Vaxx AND still where the diaper!) at a local club? Not going to do it and hope you go out of business forever.

        Walk away.

    2. nice, they use the same format of post html basically

      let’s see if they have forums for my favorite topics now

    1. i prepared to post this but as the video went on, i decided not to post it… and then i accidentally hit ‘post comment’. sorry, i’ll be more careful in the future.

      1. I’m glad you posted it tj , because up above in a post I made I was referring to the information in your post.

  24. I ran into my neighbor yesterday. She’s in her 70s. She asked if I’d had the jab. I told her “no,” and that I wasn’t going to get it. Then she proceeds to tell me that she wishes I would because her son, my age, just died from the Wuhoo. And she said he had no comorbidities. I didn’t have the heart to ask if he was fat, just gave her my condolences.

    1. I just saw a woman shopping at Walmart who was a secretarial worker at an office I frequented. She got both jabs at work, but her retired military husband did not. She said they both got covid, and he died after a couple of weeks intubated in a rural hospital. I asked how long before she was allowed back in the office, and she said she’s on social security disability; mentally broken after the ordeal, and gawd ignored them. I’m guessing she’s in her late 40s or early 50s.

      1. We don’t know what co morbidities her husband had or what kind of treatment he got at the Hospital, which might of been no treatment.

        When you have a Medical system that has conspired by bribery to suppress valid treatment of Covid by effective meds , no telling if her husband was a victim of lack of treatment or not.

        1. A lot of these deaths are preventable but there are financial incentives not to treat properly as well as risks to medical licenses for those who do treat properly. It’s quite appalling.

          1. “A lot of these deaths are preventable…”

            Small town people seem to think that it’s only spreading in the big cities, so caution is ignored. Eastern Washington and likely most of Oregon are host to more unhealthy looking people than I’ve ever seen in California. Of course the deep south likely leads the entire country.

        2. He was former military, combat arms MOS with multiple deployments, so he was able to retire early. She was still employed, but no functional career due to the constant moving required of military families. Not the sharpest tools in the shed, they both always worked hard and raised two sons. Their Achilles’ heel was likely years of cigarette smoking although they both quit using “the patch.” Obesity was another issue, her more so than him. I don’t don’t know the finer medical details other than, “He couldn’t get enough air to breathe.” And she likely brought it home and infected him, so there’s the guilt thing too.

    1. Essay
      The American Housing Market Is Stifling Mobility
      Prosperous cities use a range of policies to keep home prices high, shutting out newcomers and limiting economic opportunity
      By Edward Glaeser and David Cutler
      Sept. 2, 2021 9:56 am ET

      Migration has been central to the American story since the beginning. In the early 19th century, New Englanders left the rocky soil of Massachusetts for the more fertile Ohio River valley. During the Dust Bowl of the 1930s, farmers fled Oklahoma for California. In the early 20th century, millions of African-Americans left the Jim Crow South to find work in the factories of northern cities. Through the 20th century, mobility was an American tradition: In every year between 1950 and 1992, according to the Current Population Survey, more than 6% of Americans moved across county lines.

      In recent years, however, the engine of American migration has been grinding to a halt. People often move to get ahead, which makes mobility a reasonable measure of economic dynamism. So it’s a troubling sign that since 2007, geographic mobility has dropped by one-third, with fewer than 4% of Americans changing counties annually. The reason is clear: In the most prosperous cities and regions, insiders have figured out how to use regulations, laws and institutions to make life easier for themselves and harder for everyone else. In the process, they have made the U.S. a far less dynamic society.

      To Read the Full Story
      Subscribe to The Wall Street Journal

    1. The Financial Times
      Evergrande Real Estate Group Ltd
      Evergrande jitters spread through China property bond market
      Yields for some real estate issuers climb after world’s most indebted developer admits default risk
      The exterior of the China Evergrande office in Hong Kong
      Problems at Evergrande have thrown the spotlight on the ability of other highly leveraged developers to refinance as liquidity conditions tighten in China
      Thomas Hale in Hong Kong
      50 minutes ago

      Bond yields at some of China’s biggest real estate companies are rising in a sign that fears over debt problems at leading developer Evergrande are spreading more widely through the sector.

      The bonds of Guangzhou R&F, a property developer, edged lower in Shanghai on Tuesday to 60 per cent of their face value, following falls of more than 20 per cent a day earlier. The moves came after Moody’s, the rating agency, downgraded the group’s credit rating and warned over its ability to refinance.

      Fantasia Group, another property developer that also faces refinancing concerns, said in a statement to the Hong Kong stock exchange yesterday evening that it had made several purchases of $6m of its own bonds, one of which matures in December and had sunk to 78 cents on the dollar.

      Refinancing worries have grown following a furious sell-off in the debt and equity of China Evergrande, the world’s most indebted property developer, which is undergoing a liquidity crisis that forced it last week to warn over the risk of default. On Friday, trading in some of its bonds in Shanghai and Shenzhen was halted.

      As well as choppy trading on international markets, where they are some of Asia’s biggest high-yield borrowers, Chinese property developers are also grappling with tighter credit conditions and weaker sales within China. Beijing introduced new rules last year to constrain their leverage.

      “Overall the funding conditions have tightened and the offshore bond market is also getting more volatile,” said Kaven Tsang, a vice-president at Moody’s.

      “That actually has some negative implications on the market as a whole,” he added. “The refinancing risk has increased.”

    2. Rapid debt dismantling risks blowing up market
      Local | Andrew Wong 16 Aug 2021

      In financial markets, is “too big to fail” a more reasonable concept or is “too big to control” more worthy of attention? There is no definite answer because it all depends on timing.

      In fact, the antecedent of “too big to fail” must be “too big to control” – that is, if there were no “too big to control” enterprises, there would be no “too big to fail” problem.

      The best example of this can be found in the global financial crisis of 2007-2008.

      If US regulators had made and implemented effective policies to prevent financial institutions from excessive borrowing, and supervised derivatives trading by these institutions, then Lehman Brothers would have not gone bankrupt. However, the securities firm raked up bad debts due to overzealous lending during the housing bubble and its debt ballooned to more than US$600 billion before it collapsed, triggering the global financial tsunami.

      Therefore, firms that were called “too big to fail” in the aftermath of the 2008 financial tsunami are actually the one which had become “too big to control” before the crisis.

      So, to prevent the occurrence of systemic risk, financial markets should not make excuses such as “too big to fail” to protect companies which are riddled with holes, but make policies to prevent these institution from becoming “too big to control.”

      But what exactly is an enterprise that is too big to control?

      In financial markets, any company could support its development through excessive borrowing.

      And even though the market capitalization of these enterprises may balloon into billions or even trillions, they could still collapse in a short period of time.

      But because these firms have become too big to control, any bid to cut them down to size could trigger market volatility.

      This is the dilemma that regulators now face with the embattled developer China Evergrande.

      Because of the huge debt problems faced by many mainland housing and real estate developers, the central government last year drafted new financing rules for them under a “three red lines” policy, which not only capped borrowing limits but required all these enterprises to reduce their debt as soon as possible.

      Under these regulations, Evergrande and other indebted developers have to sell assets to reduce their debt.

      Of course, this action was clearly aimed at preventing the bad debt bubble from further expanding and exploding.

      Because if the market is not able to bear the load before the blast, it can cause serious systemic risk. But while the new rules are clear and make sense, if every highly indebted developer is forced to reduce debt and sell assets, will the market be able to digest these assets?

      And if the market is unable to absorb the relevant assets, will these enterprises fail to meet the “three red lines” and collapse, causing systemic risks in the market?

      More worryingly, a lot of these highly indebted developers have already grown into entities worth hundreds of billions.

      That is to say, they have possibly become too big to control, so their problems cannot be simply solved by a change of policy with specific time frames.

      Trying to put a lid on their exposure is like trying to disarm a ticking bomb.

      One cannot dismantle a bomb by simply cutting the red, yellow or blue wires as one chooses.

      It takes time to understand the mechanisms – of how the bomb has been wired – and then it needs to be carefully dismantled step by step so as to avoid accidentally detonating it and killing the entire bomb disposal squad.

    3. Opinion
      Karen Maley
      Investors feel the burn from China Evergrande
      Foreign investors are becoming increasingly fretful that Beijing is preparing to separate out Evergrande’s real estate arm, leaving them with major losses.
      Karen Maley Columnist
      Sep 6, 2021 – 5.00am

      Foreign investors are stampeding towards the exits as anxiety mounts that they’re likely to be left nursing hefty losses when Beijing finally comes to the rescue of the giant Chinese debt-laden property developer, China Evergrande.

      Astute investors are becoming increasingly concerned Beijing could be preparing to bail out Evergrande’s real estate arm in China, and leave the holding company – which owes most of the debt – to either default, or to reach a deal with its bondholders, which involves them taking a large haircut.

      China Evergrande founder Xu Jiayin was forced to sell Villa del Mare, on Australia’s most expensive street, Wolseley Road, Point Piper, in 2015 by then Treasurer Joe Hockey.

      They argue that the recent move by the billionaire founder of Evergrande, Xu Jiayin, to step down as chairman of the company’s main real estate arm, Hengda Real Estate Group, suggests Beijing is already preparing to separate out the corporate giant’s real estate division. Xu – who still owns 71 per cent of the group – remains chairman of Evergrande.

      Back in 2015, Xu was forced to sell his $39 million mansion in Sydney’s Point Piper, after the Foreign Investment Review Board deemed it was purchased in contravention of Australian laws that prohibit foreigners buying property without government approval.

      But investors are fearful that such a separation could disadvantage bondholders – who have lent the group nearly $US28 billion ($38 billion) – because they will have little recourse to the group’s onshore real estate assets.

    4. Is this China’s Lehman Brothers moment?

      Since China is cranking up the anti-western propaganda at home, it would make sense that there is a real problem they want to paper over.

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