Economic Collapse - Fast

[River Song]

Remember 2008 and how fast it collapsed? Well that was a tea party compared to what may happen in the next few weeks.

Check "Evergrande" - The largest real estate company in the world is close to collapse unless Xi Jinping nationalises it.

Alternative, he could do what all politicians do when the brown stuff hits the oscillating device - start a war - it gets the country together. Watch out Taiwan

My understanding is that Australia is already feeling the effects of the Evergrande collapse.

Unreported - heads up peeps

RS

[River Song]

China dumped treasuries this morning

[Mortblanc]

It appears that Evergrande will be a major covid casualty. They were doing fine until the world shut down. Extensive expansion, then the cash flow stops.

The Chinese have dumped that same amount of bonds every month for the past 5 months. It has been a controlled shift of bonds in favor of now owning Japan.

[Pete Grey]

It sounds a little like the 1980s when overtrading was quite common, a new business would start up and start opening new branches at a phenomenal rate, then all of a sudden they would be in trouble.

The problem was when a new store opened there would be a surge of business, the profits of which would be used to finance the next store, as trade steadied, takings and so profits dropped and it left a cash vacuum.

However with real estate, during covid, demand for property dropped and companies reduced rents chasing what business was available, this was a double whammy, and I presume this could cause a cash flow situation.

[Skean Dhude]

There is nothing new about that process. It was, still is, and will be, an issue. People never learn.

Ignoring the fact of what Covid is we have a change of requirements for whatever reason. This requires action from a business like anything that happens and businesses adapt, as much as they can.

In this case it was complicated by the government getting involved. Starting from the fact that everything government does it fucks up. They introduced so much uncertainty and confusion into the process that made the issue, imo, 100 times more difficult.