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NEW YORK—An economic slowdown in China could ripple through the global economy and weigh on commodity prices and growth, star stock picker Cathie Wood of ARK Invest warned in a webinar on Tuesday.Wood, whose flagship $19.7 billion Ark Innovation fund was the top-performing U.S. equity fund in 2020, said that China’s recent steps to crack down on sectors ranging from gaming to education to financial firms are increasing the likelihood of a policy mistake that leads to a sharp slowdown.“I really do think that the policy makers in China are beginning to play with fire,” she said, adding “We will...

In the anatomy of an economic crisis, a bank run is the point of no return. Bank runs occur when people scramble to withdraw cash from banks in fear of collapse. In the worst cases, banks’ liquid cash reserves are exhausted, not everyone gets their money and the bank defaults. It’s a grim scenario which, fortunately, has occurred rarely in history. The most significant bank runs in the United States took place during the 1930’s Great Depression. More recently, there were runs on numerous U.S. banks during the Financial Crisis in 2008. In Asia, bank runs have also been rare....

No matter how the Evergrande drama plays out – whether it culminates with an uncontrolled, chaotic default and/or distressed asset sale liquidation, a controlled restructuring where bondholders get some compensation, or with Beijing blinking and bailing out the core pillar of China’s housing market – remember that Evergrande is just a symptom of the trends that have whipsawed China’s property market in the past year, which has seen significant contraction as a result of Beijing policies seeking to tighten financial conditions as part of Xi’s new “common prosperity” drive which among other things, seeks to make housing much more affordable...

CommentaryA few months ago, when investors started to discuss the troubles of Evergrande, China’s largest real estate developer, many economists saw the problem as isolated and insignificant. The consensus message was that the real estate crisis was containable and that the Evergrande default would be a single case. However, Chinese defaults on local and overseas bonds rose to a record $43 billion in 2021, according to Bloomberg, led by widespread defaults in the real estate sector.Up until a week ago, the bonds of Zhenro Properties Group were seen as safe, and the company was widely perceived as a rare case...

Beijing — Two major Chinese property firms have defaulted on $1.6 billion worth of bonds to overseas creditors, Fitch Ratings agency said Thursday, as contagion spreads within the country's debt-ridden real estate sector. China's government sparked a crisis within the property industry when it launched a drive last year to curb excessive debt among real estate firms as well as rampant consumer speculation. Companies that had accrued huge debt to expand suddenly found the taps turned off and began struggling to complete projects, pay contractors and meet both domestic and foreign repayments. Real estate behemoth Evergrande has been the highest...

After lurching from deadline to deadline, China Evergrande Group (3333.HK) is again on the brink of default, with pessimistic comments from the property developer raising expectations of direct state involvement and a managed debt restructuring. Having made three 11th-hour coupon payments in the past two months, Evergrande will again face the end of a 30-day grace period on Monday, with dues this time at $82.5 million. But a statement late on Friday saying creditors had demanded $260 million and that it could not guarantee enough funds for coupon repayment prompted authorities to summon its chairman - and wiped an eighth...

China Evergrande Group today again defaulted on interest payments to international investors.DMSA, the German Market Screening Agency, itself is invested in these bonds and has not received any interest payments until today’s end of the grace period. Now DMSA is preparing bankruptcy proceedings against Evergrande and calls on all bond investors to join it.

Chinese President Xi Jinping must strike a delicate balance between eliminating China's crushing debt and maintaining consumer confidence. A misstep could spur global chaos, both economic and political.. China's economy — the 2nd-largest in the world — is teetering on the brink of disaster. Since this spring, Beijing has canceled initial public offerings, fined tech companies billions for antitrust violations, forcibly shut down China's entire for-profit education industry, and sent CEOs running for the exits to avoid the government's ire. Even more dire, the Chinese megadeveloper Evergrande recently started missing payments on its more than $300 billion in debt, shaking...

“It’s the end of the world (and I feel fine)” is a great song from the band REM. I was reminded of the song today as, contrary to the media narrative, Evergrande made a $83.5 million bond payment. While the common narrative is that international/non-Chinese investors will get the short end of the stick versus Mainland bondholders, the payment was to international investors. That being said, Evergrande is by no means out of the woods yet as this issue will keep rearing its head in the near term. However, it is abundantly clear that Chinese regulators and policymakers are aware...

The Evergrande crisis —China Evergrande Group (HKG:6666) (OTCMKTS:EVGPF) — has brought to light how China has more than 30 million unsold properties that could serve as the home to 80 million people. Mark Williams, chief Asia economist at Capital Economics, estimates that the “ghost town” phenomenon in the country could account for the entire population of Germany. Evergrande Crisis And “Ghost Town China” As reported by CNN, a further 100 million properties are estimated to have been bought but not occupied, “which could accommodate roughly 260 million people, according to Capital Economics estimates.” The issue reflects key aspects of the...

Nearly a month after the Evergrande crisis went to 10, sending property sector bonds crashing to near record lows and sparking a sharp swoon in China's property sector, the country's central bank finally broke its silence on the crisis at Evergrande , saying risks to the financial system stemming from the developer’s struggles are “controllable” and unlikely to spread.Speaking at a news briefing on Friday, PBOC official Zou Lan - head of the financial market department. - said that authorities and local governments are resolving the situation based on “market-oriented and rule-of-law principles” Bloomberg reported. Additionally, the central bank has...

Selling off resources, purging top officials, and defaulting on debt. It seems that the Chinese economy is falling, and there may be no one to bail them out. In a wave of recent reports, we see the contraction of the national economy, especially intense in the north. There have been blackouts and power failures across the area, and while the problems began in factories they have now spread to homes, a trend that is forecast to spread as time passes. The most alarming case is that of the real estate colossus Evergrande, whose debt is so large that default is...

China’s embattled developers, Evergrande and other property companies, have reportedly shifted billions of dollars in debt to off-balance sheet vehicles, according to recent research from investment bank JPMorgan. Once this additional debt is counted in, the leverage ratios rise distinctly.Those property developers have utilized the tactic to help comply with new borrowing cap rules introduced by the Chinese regime last year, reported Reuters citing the JPMorgan research. The bank’s China and Hong Kong property analysts say that Evergrande’s case appears to be the most extreme. “It is possible that the real gearing could be even higher, as data on some...

The Evergrande debt crisis is the ongoing financial situation of Chinese property developer Evergrande Group. After a letter circulated online of the company informing the Guangdong government that it was at risk of a cash crunch, shares in the company plunged in value, with impacts on global markets and a significant slow-down in foreign investment in China during August and September of 2021. 1 Aggressive Expansion2 Wealth Management Products3 Three Red Lines4 The ‘Fabricated’ Letter5 The Default6 Assets Sale7 Corporate Bonds Exposure8 Potential RestructuringAggressive ExpansionThousands of retail investors, as well as banks, suppliers, and foreign investors are owed money by...

China’s Unstable Political Economy Evergrande’s collapse is a sign of deeper weakness, just when Xi is impatient to challenge the U.S. By John Lee Oct. 6, 2021 5:27 pm ET The world has been watching as the Chinese real-estate giant Evergrande flails, and some have been asking whether Beijing will soon have a moment akin to 2008’s collapse of Lehman Brothers in America. Xi Jinping may manage to prevent the burst of the real estate bubble, but China’s economy isn’t heading for more-sustainable growth. Evergrande’s woes are a reminder that China’s political economy under Mr. Xi has become even more...

Chinese property developer Fantasia Holdings failed to repay a $206 million bond payment due Monday, said the company, just two weeks after it said it had no liquidity issues. The missed payment adds to the already immense strain on China's real estate sector, which has been left exposed to the $305 billion credit crunch from property giant Evergrande, the most indebted company in the world. Fantasia is worth $415 million, reported Reuters, a drop in the ocean compared to Evergrande's crisis. But its bond default contributes to fears that an imminent major collapse in China's property market could destabilize the...

This guy nails the explanation of what is happening with the collapse of the real estate giant Evergrande. This IS going to probably have incredible effect on financial markets around the world. This man is giving a thorough, truthful explanation about what is happeing with the collapse of Evergrande. Click for video.

Trading in shares of debt-laden China Evergrande was suspended on Monday after it missed a key bond interest payment last week, its second offshore debt obligation in a week, with market watchers jittery as the group’s troubles unravel. Shares of its unit Evergrande Property Services Group were also suspended, according to the Hong Kong stock exchange. With liabilities equal to 2% of China’s GDP, Evergrande has sparked concerns its woes could spread through the financial system and reverberate around the world, though worries have eased somewhat after the central bank vowed to protect homebuyers’ interests.

You don't have to spend much time in China to notice the mystifying glut of half-built apartment complexes, neighborhoods, and even ghost cities. There are certainly legitimate residences getting built, but the buildings I have in mind are concrete frameworks with no doors or window frames. They feature sky cranes and scaffolding but no construction workers. Buildings sit in this condition month after month. China is estimated to have enough unsold "housing" of this type for 90 million people. These empty buildings are a manifestation of China's enormous property bubble. The real estate sector has grown to at least 25...

Stocks tumbled around the world on Monday as markets focused on the severe troubles of property developer China Evergrande Group. A Chinese debt crisis will — either now or in the near future — bring down China’s economy, and the U.S. must delink from that country to reduce the damage to itself. A crucial test comes Thursday, when Evergrande must pay $83.5 million in interest on its March 2022 bond. Payment of 232 million yuan due the same day has been “settled through negotiations.” Then, on Sept. 29, $47.5 million comes due on its March 2024 bond. The betting on...