How China’s Model of Dictated Economic Growth Blew Up, by Wolf Richter | STRAIGHT LINE LOGIC

The Chinese government steered prodigious amounts of debt towards real estate, and now China is paying the price. Perhaps a planned economy isn’t such a great idea after all. From Wolf Richter at

The debt-fueled property & construction bubble that drove its growth turned into a huge explosive mess with an enormous amount of debt.

It’s mind-boggling just how important the residential property sector is to the Chinese economy, to what extent government-dictated economic growth was achieved by building more apartment towers, and it’s even more mind-boggling how much debt residential property developers have racked up, and how much household wealth is tied up in the property sector at multiple levels. Then there are the demographic headwinds the property sector has been facing for years, that are coming to the forefront. So now there is a property crisis in China that is making the US mortgage crisis of 2008 look like child’s play in terms of magnitude. The central government has been trying to deal with rampant real estate speculation and prevent it from going even more haywire and take down the financial system and the economy.Continue reading→

China’s property sector stalked by Evergrande default fears as developer misses third deadline – ABC News

  • Evergrande faces staggering debts of roughly $400 billion
  • The firm missed its third round of bond payments on Monday as investors wait to be paid $200 million in coupon payments
  • It will be formally declared in default if it doesn’t meet its October 18-19 payment deadline…

‘China’s financial system could collapse’: What the Reserve Bank’s Evergrande bombshell means for Australia – ABC News

… “If they act too quickly in addressing these

vulnerabilities, confidence in the implicit guarantees that underpin much of China’s financial system could collapse, which would lead to

financial distress,” the RBA says.

“In contrast, if they act too slowly, the probability of more severe financial stress in the future will increase.

“Continued bailouts also risk further entrenching perceptions of implicit guarantees.”…

After Evergrande, Chinese developer Fantasia can’t pay its debts either. That’s stoking real estate fears – Muunyayo

Bisaya News

Fantasia Holdings, a Shenzhen-based developer, has failed to repay $ 206 million in bonds due on Monday, the company said in a listing. It is now assessing ?the potential impact on the Group?s financial position and liquidity,? it added. The property management company of Country Garden, China?s second largest developer by revenue after Evergrande, separately said in a filing that Fantasia failed to repay a corporate loan of around 700 million yuan (US $ 109 million). Fantasia had told the company that it was likely to ?fail? [its] External debt, ?added Country Garden Services.

S&P and Moody?s have given Fantasia “default” credit ratings, stating that failure to pay the principal would likely cause the company to default on its remaining bonds as well…

Evergrande shares suspended from trade in Hong Kong… – ABC News

Comment by tonytran2015: the end phase of a company following its bubble phase

…It follows Evergrande missing a second offshore bond payment late last week, failing to pay some of the interest owed on its roughly $400 billion in debt.

The US Equity Market Just Suffered Its 2nd Biggest Selling-Wave In History
The US Equity Market Just Suffered Its 2nd Biggest Selling-Wave In History As futures indicated, the US cash equity open was greeted by an avalanche of selling, breaking the S&P back below its 50DMA… This was the second largest sell-program in history with TICK crashing to -2067 (record low as -2069 on 5/11/21)… …which means…

Evergrande: Shares in cash-strapped China property giant plunge – BBC News

Comment by tonytran2015: Any overpriced enterprise in heavy debt may go bankrupt suddenly leaving its investors, creditors and employees with heavy losses.

… The firm said it is struggling to sell assets fast enough to service its massive $305bn (£220bn) of debts…

El Salvador’s Legislative Assembly approves $150M Bitcoin Trust – SAYAG
The Legislative Assembly of El Salvador has passed a bill to create a $150 million dollar Bitcoin Trust to support the development of crypto infrastructure and services across the country...