Another corporation involved in China’s real estate bubble is about to pop.
Embattled Chinese property giant Evergrande on Wednesday suffered a second credit rating downgrade in two days, raising fears the world’s most indebted company will default and sending its shares tumbling below their listing price 12 years ago.
The Hong Kong-listed firm has run up a mountain of liabilities totalling more than $300 billion after years of borrowing to fund rapid growth and a string of real estate acquisitions as well as other assets including a Chinese football team.
Maybe it’s nothing?
Maybe it is only the first shaky Chinese Corporation that will have problems?
Maybe if These troubles expand and threaten the stability of the Chinese Communist Party Rule, President for Life Xi will decide on a “Short, Victorious War” on Taiwan. This would be the least bad (for China) time to do it.
Snark: I hope this doesn’t affect Hunter’s cut!
Another South Sea Bubble. eh ?
The worst part of these corporate collapses, is that the collapse affects every corporation in the same business sector. Everyone becomes scared about the stocks and bonds of similar companies. Shaky companies can fail, and increase the anxiety and financial pressures in the sector.
When Enron collapsed, the Electric Utility stocks all took a beating. Example, Xcel Energy stock nosedived from $20+ to $6-$7 per share. (And I was a Fool not to buy heavily that week.) WPS and other utility stocks also took a big dump. The price recovered quickly in a matter of weeks, but a lot of people lost money in the panic. Not as much as the poor schmucks holding Enron Stocks in their Retirement Funds though. They lost it all.
Today might be a good time to look through your portfolios?
The real tools of Chinese state power are not publicly traded.
The pressure on Hong Kong economic powers is incredible, including blackmail, extortion and murder, but our quisling press won’t report any of that. The Indian press reports a bit of it.
I’m guessing that this is a Chinese state takeover of the firm, or at least all of its assets, as a penalty for not playing ball with the CCP.
…And I wonder how much of that $300 billion was used to inflate the Vancouver real estate market? With the influx of Chinese money through the BC casinos, real estate prices in the lower mainland have skyrocketed. Hopefully, with this latest development, it’ll all come crashing down. Looking forward to seeing the action.
This company allegedly holds the most farm land in Canada and Australia and the second-most in the U.S. (after Bill Gates). It also is alleged it has purposefully either not planted crops or is destroying crops to create food shortages.