Business Evergrande Group has officially defaulted

Evergrande officially defaulted - DMSA is preparing bankruptcy proceedings against Evergrande Group

/PRNewswire/ -- China Evergrande Group today again defaulted on interest payments to international investors. DMSA itself is invested in these bonds and has...

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BERLIN, Nov. 10, 2021 /PRNewswire/ -- China Evergrande Group today again defaulted on interest payments to international investors. DMSA 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.


China Evergrande Group, the second largest real estate developer in China, defaulted on interest payments on two bonds back in September, with the 30-day grace period still ending in October. However, shortly before the end of the grace period, the public was misled by rumors about alleged interest payments. The international media also took the rumors for granted. Only the DMSA - Deutsche Marktscreening Agentur (German Market Screening Agency) already recognized the default at that time and proved in a study that the bankruptcy of Evergrande, the world's most indebted corporation, could ultimately lead to a "Great Reset", i.e. the final meltdown of the global financial system.


(Note to journalists: See DMSA press releases dated Oct. 25 and Oct. 29, 2021, and the DMSA study "The Great Reset - Evergrande and the Final Meltdown of the Global Financial System"; all available via the DMSA homepage www.dmsa-agentur.de.)


"But while the international financial market has so far met the financial turmoil surrounding the teetering giant Evergrande with a remarkable basic confidence - one can also say: with remarkable naivety - the U.S. central bank Fed confirmed our view yesterday," says DMSA senior analyst Dr. Marco Metzler. "In its latest stability report, it explicitly pointed out the dangers that a collapse of Evergrande could have for the global financial system."


In order to be able to file for bankruptcy against the company as a creditor, DMSA itself invested in Evergrande bonds, whose grace period expired today (Nov. 10, 2021). In total, Evergrande would have had to pay $148.13 million in interest on three bonds no later than today. "But so far we have not received any interest on our bonds," explains Metzler. He adds, "With banks in Hong Kong closing today, it's certain that these bonds have defaulted."


(Note to editors: Exact details of the bonds that have defaulted so far can be found in the appendix to this press release.)


Particularly problematic for Evergrande: all 23 outstanding bonds have a cross-default clause. "This means that if a single one of these bonds defaults, all 23 outstanding bonds automatically have 'default' status" DMSA senior analyst Metzler knows. However, this does not automatically result in a bankruptcy for Evergrande Group. To determine bankruptcy, a insolvency petition must be filed with the court. This can be done either by the company itself or by one or more of the company's creditors. And this is precisely what is now planned. Metzler: "DMSA is preparing bankruptcy proceedings against Evergrande. We are already holding talks with other investors in this regard. We would be pleased if other investors were to join our action group."


For the DMSA expert, it is clear: "As soon as a court opens insolvency proceedings, Evergrande will also be officially bankrupt - and that is only a matter of days."

 

[Lone MacReady]

For what it's worth Blackrock invested quite a lot

Funny, doesn't FED heeb Powell have stock in blackrock? Or is it Yellen? Either way, seems like a bit of a conflict when you work for the "US treasury", but whatever.

 

[Kacho]

Shit is starting to hit the fan for China and it's not going to get any better. They built the biggest bubble in human history and when it pops, it's going to pop hard. Get fucked Chang.

 

[The Big O]

Would be nice if this puts a serious crunch on China's toothpick-and-glue economy, but I won't hold my breath. Besides, them going down could possibly result in some economic pains here at home that would really leave the USA hurting more than it currently is.

 

[Cuckoman]

Like a military stunt at Taiwan?

Yes, possible.
Right now is the best time in this generation to reunite as the US is leaderless and unable to intervene or even throw up much of a stink about it.

 

[neverendingmidi]

Likely the opposite. The current inflation isn't actually a fiscal issue like in Weimar Germany or something. The current inflation is a supply issue. Demand is the same while supply is less because of the transportation issues. As soon as the transportation issues are resolved inflation will go back to normal and likely reverse somewhat.

The collapse of Evergrande will crunch creditors and bond holders that now have to foot the bill for hundreds of billions in unsecured toxic debt, which will likely drastically reduce currency flow as everyone even tangentially related to the collapse hordes their money to ride out the inevitable shit storm. Less money actively circulating in the economy means that people will reduce prices to compensate, so people that have money are more enticed to spend it, this is because the large majority of vendors buy in inventory on credit, and if they don't move their inventory, they, too, will default. This is what's called a deflationary spiral, where everyone continuously tries to undercut their own prices to move in increasing amount of inventory.

While this may sound good in theory, everyone wants their money to be worth more, the most damaging fallout from the 2008 financial crisis was the ensuing credit crunch and deflationary spiral that forced massive businesses downstream from the initial damage into default.

When has inflation EVER gone backwards? At best it might slow. The price increases are forever.

 

[Honest Coyote]

How's this going to affect crypto markets? China cracked down on mining recently, but people may panic rush into it.

 

[A Cardboard Box]

When has inflation EVER gone backwards? At best it might slow. The price increases are forever.

Colorado's minimum wage is tied to inflation, and during the 2008 financial crisis the Colorado minimum wage dropped two years consecutively because of the deflationary spiral that happened immediately following the economic meltdown.

 

[Getwhatyou]

Another failure doomers have been waiting for which will turn out to be overblown. Is it time to rope yet?

Seriously tho. All my money is on a bailout from Winnie the pooh.

The Chinese manipulate thier currency value onto the open market. They tell us what its worth rather than letting them market decide

 

[Realistic Elephant]

When has inflation EVER gone backwards? At best it might slow. The price increases are forever.

Inflation is much more the exception rather than the norm historically. Currencies based on precious metals would suffer inflation when the supply of metals increased drastically or when currencies were debased, for example in 16th century Spain with its treasure fleets and New World mints or the debasement of the denarius in the 3rd century Roman Empire. They would then deflate in subsequent periods when the supply was more limited and/or the currency was reformed to a more pure standard and coins were withdrawn from circulation. There was prolonged, gradual deflation during the 13th-16th centuries as well as in the 17th-18th centuries due to these types of factors.

This trend even held on into the industrial era; for example, the purchasing power of the US dollar in nominal terms was higher in 1900 than it was in 1790 despite the huge growth in the nation's population and economy during the period as well as the discovery of significant gold and silver supplies in the West. Inflation was kept in check due to various economic factors but the US also restricted the growth in the money supply through refusal to endorse "free silver" (minting coins out of silver bullion on demand).

In modern fiat currency monetary systems, Japan has experienced both deflation as well as disinflation for pretty much all of the past 32 years.

 

[thx1138]

Hm.

Is it time for me to go get the sledgehammer and break open a certain poured cement block in a remote corner of my property, yet?

 

[Corpun]

Well worst case scenario there goes 20k in savings. On the bright side at least we know what happens after a world wide economic depression and shitty ineffectual elite ran democracies.

 

[neverendingmidi]

Colorado's minimum wage is tied to inflation, and during the 2008 financial crisis the Colorado minimum wage dropped two years consecutively because of the deflationary spiral that happened immediately following the economic meltdown.

That's the government playing games. Did the prices of items decrease or increase? Or did they stay the same while the actual weights decrease? Did any of those items ever go back to the earlier prices/weights? I doubt it.

 

[jje100010001]

Reposting from Happenings thread on a prediction:

https://twitter.com/BaldingsWorld/status/1458519623301750786

I would agree that a US-style collapse is probably not going to happen, since the economy still ultimately runs at the whims of the CCP.

But I do expect some level of fallout from this, especially for the foreign companies exposed to this mess.

 

[melty]

Long term capital management nearly tanked the US economy in the 90s because of Russian bond defaults. Maybe the mechanism isn't clear now, but there's always some fallout from these things, there's always some Wall Street hotshot who bet billions on Evergrande, and then there's the guy he owes billions to, and then there's the guy that guy owes billions to, and there's no reason for any of them to worry because these parasites never face consequences.

 

[spinal gas chamber]

Hm.

Is it time for me to go get the sledgehammer and break open a certain poured cement block in a remote corner of my property, yet?

Yeah, your septic system needs cleaning.

 

[FuckedOffToff]

Can the US economy take much of a shock? Seems kind of frothy? Bubbly, if you like. The stock market and housing in particular.

 

[A Cardboard Box]

That's the government playing games. Did the prices of items decrease or increase? Or did they stay the same while the actual weights decrease? Did any of those items ever go back to the earlier prices/weights? I doubt it.

Yeah that's what deflation is. Prices deflated for two years straight, so minimum wages decreased. This isn't like the government is playing gotcha or something. The law was passed to make sure that wages went up with inflation, but it just so happened that for two years we were caught in a deflationary spiral, so minimum wages went down. It isn't a law passed every year, in Colorado it is automatic. Minimum wage automatically increases every year based on inflation.


The red line is inflation by year. That valley on the far right is the Great Recession. The US was caught in a deflationary spiral from 2007 to 2009, until TARP bailouts and tighter lending regulation restored spending confidence. That second valley just to the right is 2015, where depressed oil prices and low consumer confidence caused the CSI to drop for the year. People generally have a short memory, but it's important to note that from 2014 to 2015 the average crude price literally halved, from $93/bbl to $48/bbl, which drove down food prices. If you don't remember lower food prices, that's because you were buying bags of chips that read "20% MORE!" while staying at the same price of the smaller bags.

 

[737 MAX Stan Account]

And to think my co-workers mocked me for cashing out of all my Chinese investments last month...

 

[Realistic Elephant]

Yeah that's what deflation is. Prices deflated for two years straight, so minimum wages decreased. This isn't like the government is playing gotcha or something. The law was passed to make sure that wages went up with inflation, but it just so happened that for two years we were caught in a deflationary spiral, so minimum wages went down. It isn't a law passed every year, in Colorado it is automatic. Minimum wage automatically increases every year based on inflation.

View attachment 2705952
The red line is inflation by year. That valley on the far right is the Great Recession. The US was caught in a deflationary spiral from 2007 to 2009, until TARP bailouts and tighter lending regulation restored spending confidence. That second valley just to the right is 2015, where depressed oil prices and low consumer confidence caused the CSI to drop for the year. People generally have a short memory, but it's important to note that from 2014 to 2015 the average crude price literally halved, from $93/bbl to $48/bbl, which drove down food prices. If you don't remember lower food prices, that's because you were buying bags of chips that read "20% MORE!" while staying at the same price of the smaller bags.

You honestly believe the CPI is measuring true inflation? It's been so massaged since 1990 it's basically a way to cut down on COLA costs for SS recipients....for a while it was realistic but has totally broken away from real-world inflation since 2008 or so and has only gotten worse since then.

 

[Nate Higgers]

Unless you want to profit, in which case watch very carefully to see how the contagion spreads and react accordingly and you'll be laughing all the way to the bank.

I’m an absolute retard but I missed the Tesla train, the Ethereum train, and I missed the Bitcoin train. How do I profit off this, are there any specific stocks or mutual funds/ETFs?