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…

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.

Corporate Insiders With Impeccable Trading Records Send Clear Signal “Stock Market Is Rigged”
Corporate Insiders With Impeccable Trading Records Send Clear Signal “Stock Market Is Rigged” Nobody knows more about the future bullish and bearish developments of a business than its top executives. Insiders are senior executives, board members, or shareholders who hold 10% or more of a company, usually, come out on top when buying and selling […]

Evergrande fails to pay $180 million interest debt, ASX tumbles – ABC News

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

… The embattled property firm, reeling under a debt pile of $421 billion ($US305b), was due to make a $65.7 million ($US47.5m)
bond interest payment on its 9.5 per cent March 2024 dollar bond on

It also failed to make $115.5 million ($US83.5m) in coupon payments to offshore bondholders last Thursday…

The Market Crash Nobody Thinks Is Possible Is Coming, by Charles Hugh Smith | STRAIGHT LINE LOGIC

Charles Hugh Smith foresees a thunderous crash and believes the stock market has already topped out. SLL isn’t arguing with him. From Smith at

The banquet of consequences is being served, and risk-off crashes are, like revenge, best served cold.

The ideal setup for a crash is a consensus that a crash is impossible–in other words, just like the present: sure, there are carefully measured murmurings about a “correction” but nobody with anything to lose in the way of public credibility is calling for an honest-to-goodness crash, a real crash, not a wimpy, limp-wristed dip that will immediately be bought.

What I’m calling for is a rip your face off, weeping bitter tears over the grave of the speculative wealth that you thought was forever crash.All those buying the dipbecause the Fed will never let the market go down will be crushed like scurrying cockroaches and all those trying to rotate into the next hot sector or asset class will also be crushed like scurrying cockroaches because when the Everything Bubble pops, well, everything pops. There is no shelter in a risk-off cascade.

The crash is coming as a result of multiple mutually reinforcing dynamics, the first being that no “serious person” believes a crash is possible, much less imminent. In no particular order, here are a raft of other causally consequential triggers of a cascading market crash:

1. As I noted in my call for the top, Is Anyone Willing to Call the Top of the Everything Bubble?(September 6, 2021), there is no history to support the widespread confidence that the extremes of over-valuation, leverage, euphoria and speculation last forever, or even much longer than the lifespan of a cockroach. We’re well past that benchmark into unprecedented insanity. So what happens next: squish.

Just for the record, the Dow topped out on August 13, the S&P 500 topped out on September 2 and the Nasdaq topped out the day after my call, September 7. (Close enough for gummit work…)

Continue reading→

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…