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Thread: The Automation Spiral (obligatory loleconomics thread v2)

  1. #3241
    Movember '12 Best Facial Hair Movember 2012Donor Lallante's Avatar
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    Quote Originally Posted by Nordstern View Post
    Chinese real estate developer Evergrande has over $300 billion in liabilities and announced it won't be paying tens of millions in bond interest next week. Cue madness at HSBC.

    https://finance.yahoo.com/news/expla...041535764.html

    https://finance.yahoo.com/news/south...064926057.html

    Korea’s monetary and fiscal stimulus have helped the economy hold up through the pandemic, while leaving financial markets awash with cheap money that created a debt-driven bubble in the property market. The BOK has started to raise rates in a bid to normalize policy, while Moon has proposed another 8.3% increase in spending for next year.

    “With most people relying on bank loans to buy homes, how will they cope as borrowing costs start to rise?” Hong said, warning of defaults on loans and a property-market correction.

    With a total of six extra budgets since the pandemic struck early 2020, Korea’s debt load is expected to reach more than half the size of the economy next year -- Moon’s final year in presidency -- as opposed to just 36% in 2017 when he took office.

    After its rate hike in August, the BOK made clear more raises will come. Economists see November as the most likely month for the next move.
    Those are quite small numbers in the context of Chinese property market. like, rounding error numbers

  2. #3242
    מלך יהודים Zeekar's Avatar
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    Quote Originally Posted by Lallante View Post
    Quote Originally Posted by Nordstern View Post
    Chinese real estate developer Evergrande has over $300 billion in liabilities and announced it won't be paying tens of millions in bond interest next week. Cue madness at HSBC.

    https://finance.yahoo.com/news/expla...041535764.html

    https://finance.yahoo.com/news/south...064926057.html

    Korea’s monetary and fiscal stimulus have helped the economy hold up through the pandemic, while leaving financial markets awash with cheap money that created a debt-driven bubble in the property market. The BOK has started to raise rates in a bid to normalize policy, while Moon has proposed another 8.3% increase in spending for next year.

    “With most people relying on bank loans to buy homes, how will they cope as borrowing costs start to rise?” Hong said, warning of defaults on loans and a property-market correction.

    With a total of six extra budgets since the pandemic struck early 2020, Korea’s debt load is expected to reach more than half the size of the economy next year -- Moon’s final year in presidency -- as opposed to just 36% in 2017 when he took office.

    After its rate hike in August, the BOK made clear more raises will come. Economists see November as the most likely month for the next move.
    Those are quite small numbers in the context of Chinese property market. like, rounding error numbers
    300b in debt they might not be able to service is not a rounding error anywhere.


    

  3. #3243
    NoirAvlaa's Avatar
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    Quote Originally Posted by Zeekar View Post
    Quote Originally Posted by Lallante View Post
    Quote Originally Posted by Nordstern View Post
    Chinese real estate developer Evergrande has over $300 billion in liabilities and announced it won't be paying tens of millions in bond interest next week. Cue madness at HSBC.

    https://finance.yahoo.com/news/expla...041535764.html

    https://finance.yahoo.com/news/south...064926057.html

    Korea’s monetary and fiscal stimulus have helped the economy hold up through the pandemic, while leaving financial markets awash with cheap money that created a debt-driven bubble in the property market. The BOK has started to raise rates in a bid to normalize policy, while Moon has proposed another 8.3% increase in spending for next year.

    “With most people relying on bank loans to buy homes, how will they cope as borrowing costs start to rise?” Hong said, warning of defaults on loans and a property-market correction.

    With a total of six extra budgets since the pandemic struck early 2020, Korea’s debt load is expected to reach more than half the size of the economy next year -- Moon’s final year in presidency -- as opposed to just 36% in 2017 when he took office.

    After its rate hike in August, the BOK made clear more raises will come. Economists see November as the most likely month for the next move.
    Those are quite small numbers in the context of Chinese property market. like, rounding error numbers
    300b in debt they might not be able to service is not a rounding error anywhere.
    If you're £1000 in debt it's your problem. If you're £300b in debt it's the bank's problem.
    Quote Originally Posted by Djan Seriy Anaplian View Post
    Also that didn't sound like abloo bloo to me, PM me and we can agree on a meeting spot and settle this with queensberry rules, that's a serious offer btw. I've been a member of this community since 2005 and i've never met a more toxic individual.

  4. #3244
    Movember '12 Best Facial Hair Movember 2012Donor Lallante's Avatar
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    Quote Originally Posted by NoirAvlaa View Post
    Quote Originally Posted by Zeekar View Post
    Quote Originally Posted by Lallante View Post
    Quote Originally Posted by Nordstern View Post
    Chinese real estate developer Evergrande has over $300 billion in liabilities and announced it won't be paying tens of millions in bond interest next week. Cue madness at HSBC.

    https://finance.yahoo.com/news/expla...041535764.html

    https://finance.yahoo.com/news/south...064926057.html

    Korea’s monetary and fiscal stimulus have helped the economy hold up through the pandemic, while leaving financial markets awash with cheap money that created a debt-driven bubble in the property market. The BOK has started to raise rates in a bid to normalize policy, while Moon has proposed another 8.3% increase in spending for next year.

    “With most people relying on bank loans to buy homes, how will they cope as borrowing costs start to rise?” Hong said, warning of defaults on loans and a property-market correction.

    With a total of six extra budgets since the pandemic struck early 2020, Korea’s debt load is expected to reach more than half the size of the economy next year -- Moon’s final year in presidency -- as opposed to just 36% in 2017 when he took office.

    After its rate hike in August, the BOK made clear more raises will come. Economists see November as the most likely month for the next move.
    Those are quite small numbers in the context of Chinese property market. like, rounding error numbers
    300b in debt they might not be able to service is not a rounding error anywhere.
    If you're £1000 in debt it's your problem. If you're £300b in debt it's the bank's problem.
    They constitute 4% of the chinese property market, its not a big deal except for some niche chinese banks. There are a lot of them

  5. #3245
    מלך יהודים Zeekar's Avatar
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    Quote Originally Posted by Lallante View Post
    Quote Originally Posted by NoirAvlaa View Post
    Quote Originally Posted by Zeekar View Post
    Quote Originally Posted by Lallante View Post
    Quote Originally Posted by Nordstern View Post
    Chinese real estate developer Evergrande has over $300 billion in liabilities and announced it won't be paying tens of millions in bond interest next week. Cue madness at HSBC.

    https://finance.yahoo.com/news/expla...041535764.html

    https://finance.yahoo.com/news/south...064926057.html

    Korea’s monetary and fiscal stimulus have helped the economy hold up through the pandemic, while leaving financial markets awash with cheap money that created a debt-driven bubble in the property market. The BOK has started to raise rates in a bid to normalize policy, while Moon has proposed another 8.3% increase in spending for next year.

    “With most people relying on bank loans to buy homes, how will they cope as borrowing costs start to rise?” Hong said, warning of defaults on loans and a property-market correction.

    With a total of six extra budgets since the pandemic struck early 2020, Korea’s debt load is expected to reach more than half the size of the economy next year -- Moon’s final year in presidency -- as opposed to just 36% in 2017 when he took office.

    After its rate hike in August, the BOK made clear more raises will come. Economists see November as the most likely month for the next move.
    Those are quite small numbers in the context of Chinese property market. like, rounding error numbers
    300b in debt they might not be able to service is not a rounding error anywhere.
    If you're £1000 in debt it's your problem. If you're £300b in debt it's the bank's problem.
    They constitute 4% of the chinese property market, its not a big deal except for some niche chinese banks. There are a lot of them
    Lehman brothers were 2x the size and they were thr straw that broke the camels back in 2007. Its not something to just shrug off.


    

  6. #3246
    Keckers's Avatar
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    Quote Originally Posted by Lallante View Post

    They constitute 4% of the chinese property market, its not a big deal except for some niche chinese banks. There are a lot of them
    Surely it depends on the downstream exposure to the debt for other finance institutions?
    Look, the wages you withheld from the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord of Hosts. You have lived on earth in luxury and self-indulgence. You have fattened yourselves for slaughter.

  7. #3247

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    Chinese market sure has been shit the last 6 months. I don't know if it's just regulation or if there's something deeper to it. Ironically, them tanking has been good for our markets because we've been getting all their outflows.

  8. #3248
    Movember '12 Best Facial Hair Movember 2012Donor Lallante's Avatar
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    Quote Originally Posted by Keckers View Post
    Quote Originally Posted by Lallante View Post

    They constitute 4% of the chinese property market, its not a big deal except for some niche chinese banks. There are a lot of them
    Surely it depends on the downstream exposure to the debt for other finance institutions?
    There's not much downstream exposure to chinese banks outside of china

  9. #3249
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    Evergrande contagion threat hits China and Hong Kong property stocks
    Shares fall to lowest level in 5 years as payment deadline looms for debt-laden developer
    https://www.ft.com/content/952923b7-...a-ad2ff190a134

    Shares in Chinese and Hong Kong property groups fell to their lowest levels in half a decade as an escalating liquidity crisis at developer Evergrande showed signs of spreading beyond the sector. Evergrande, the world’s most indebted property developer, faces obligations of more than $300bn to creditors and other businesses and a crucial interest payment deadline on its offshore bonds on Thursday. The company’s Hong Kong-listed shares fell as much as 18.9 per cent on Monday. The drop underscored concerns about the broader health of China’s real estate sector and triggered a wider sell-off, sending the Hang Seng Property index, which tracks a dozen listed developers, down almost 7 per cent, to its lowest level since 2016. Hong Kong’s broader Hang Seng index fell 3.7 per cent, taking the benchmark down almost 12 per cent for the year. Evergrande, whose share price has tumbled since it warned of the risk of default last month, said senior executives would suffer “severe punishment” after*securing early redemptions on investment products it later told retail investors that it could not repay on time.

    Trading in Hong Kong indicated that the deepening fears for the property sector were dragging on other developers and financial institutions. The real estate industry, which accounts for more than a quarter of China’s economic activity, has come under pressure to reduce debt. “Evergrande is just the tip of the iceberg,” said Louis Tse, managing director at Wealthy Securities, a Hong Kong-based brokerage. Chinese developers were under substantial repayment pressure on dollar-denominated bonds, he added, while markets had become nervous that Beijing would push listed real estate groups to cut the costs of housing in mainland China and Hong Kong. “That affects the banks as well — if you have lower property prices what happens to their mortgages?” Tse said. “It has a chain effect.”

    Shares in Ping An, China’s biggest insurer, fell as much as 8.4 per cent on Monday, after closing down 5 per cent on Friday as it was forced to disclose that it held no exposure to Evergrande debt or equity. Ping An has Rmb63.1bn ($9.8bn) of exposure to the country’s real estate stocks across its Rmb3.8tn of insurance funds. The insurer took a $3.2bn hit in the first half of the year after the default of China Fortune Land Development, a developer that specialises in industrial parks in the northern Hebei province.

    Other Chinese developers including Fantasia Group, which was downgraded last week by Fitch, the rating agency, and Guangzhou R&F, have also been under pressure over recent weeks. On Friday, Reuters reported Beijing had told Hong Kong’s property tycoons in closed-door meetings to do more to ease the city’s chronic housing shortage. Signs of a slowdown across China’s property sector have also hit iron ore prices, which reached a record this year but slumped last week after markets digested the impact of government curbs on steel production. On Monday, iron ore futures in Singapore fell as much as 11.5 per cent to below $100 a tonne for the first time in over a year. Iron ore prices*had tumbled 20 per cent last week, their worst weekly performance*since the financial crisis in 2008. Exchanges in mainland China were closed for a public holiday, but FTSE China A50 index futures traded in Singapore fell as much as 4.3 per cent.

  10. #3250
    מלך יהודים Zeekar's Avatar
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    But Lall said it wont affect anything.


    

  11. #3251
    Keckers's Avatar
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    You also need to consider that the west has been waiting for an inflationary crisis to flatten the Chinese economy since the early 90s. It's a fool's errand to forecast the Chinese economy based on western rules. A few companies/financiers might collapse but it's impossible to know how the Chinese economy as a whole will respond.
    Look, the wages you withheld from the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord of Hosts. You have lived on earth in luxury and self-indulgence. You have fattened yourselves for slaughter.

  12. #3252
    GeromeDoutrande's Avatar
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    Evergrande is hostage to Beijing’s property pain threshold
    China wants to signal it is serious about cooling sector but not at the cost of an economic engine
    https://www.ft.com/content/ec1fe89c-...e-012f4825e6cc

    When asset bubbles burst, they usually follow a familiar script. Speculators go too far and prices get giddy before financial gravity is restored with a “pop”. Only then do governments consider intervening to protect the public interest or save a company that is too big to fail. But the deepening crisis surrounding China’s Evergrande, the most indebted property company in the world, is following a different narrative.* It is Beijing’s restrictions on the property sector that lie behind Evergrande’s white-knuckle ride. The anxiety felt by the company, its creditors and stock market investors will not abate until Beijing decides that a certain pain threshold has been reached. “Investors . . . are rightfully asking where Beijing’s pain threshold falls, in terms of the slowdown in economic growth that would cause authorities to reverse course and ease controls toward the property industry,” said Logan Wright, a Hong Kong-based director at the Rhodium Group, a consultancy. “That turning point in policy is still far away,” he added. “Beijing is more likely to wait for signs of financial stress to materialise, rather than acting pre-emptively.”

    Evergrande, which has more than $300bn in obligations to creditors and 778 projects under way in 223 cities, is taking a pummelling. Its Hong Kong-listed shares fell as much as 18.9 per cent on Monday to their lowest level in about a decade. Fitch, the rating agency, has slashed the credit rating on the company’s bonds and warned that a default of some kind “appears probable”. But some big questions loom. Will the company be able to honour $129m of interest payments that come due on its bonds this month or the $850m that is due over the remainder of this year? Should those payments to bondholders be prioritised above payments due on “wealth management products” held by tens of thousands of often low-income Chinese speculators?

    Of course, Beijing — which wields ultimate influence over a banking sector that is almost entirely state-owned — can issue an order at any time to bail Evergrande out. But most analysts think Beijing is intent on turning the screw. It has decided to make an example of Evergrande in order to make clear to other property developers that it is serious about the “three red lines” laid down last year to reduce debt levels in the sector and rein in a chronic oversupply of residential space. Nevertheless, it is equally clear that Beijing cannot afford to go too far. With a property sector that contributes 29 per cent of gross domestic product, any annihilation of Evergrande would impair the whole sector and set back a post-pandemic recovery in economic growth. Thus, Beijing is engaged in a highly delicate exercise. It needs to inflict enough pain to show it is serious but not so much that it renders one of the most important engines of economic growth moribund.

  13. #3253
    Keckers's Avatar
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    You must spread some Reputation around before giving it to GeromeDoutrande again.
    Look, the wages you withheld from the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord of Hosts. You have lived on earth in luxury and self-indulgence. You have fattened yourselves for slaughter.

  14. #3254

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    There is some contagion in the global mining sector but so far the other sectors of China’s market don’t display any serious issues. However, the average Chinese citizen is over leveraged in real estate so if RE prices fall, that could cause a slow down in consumption, which would act as a contagion on global markets.

  15. #3255
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    It's embarrassing when a country ran by a communist party demonstrates to the markets that they're willing to let free market forces fuck big companies that get over leveraged, whilst we would immediately use public money to prop them up.

    I'm aware communist in name only but still...
    Quote Originally Posted by Tarminic View Post
    Just for the record, "sending a needy text" is never the right answer.

  16. #3256
    Jack Coutu's Avatar
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    Quote Originally Posted by tulip View Post
    It's embarrassing when a country ran by a communist party demonstrates to the markets that they're willing to let free market forces fuck big companies that get over leveraged, whilst we would immediately use public money to prop them up.

    I'm aware communist in name only but still...
    "I'm aware" proceeds to show how unaware and ignorant he is.

  17. #3257

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    Quote Originally Posted by tulip View Post
    It's embarrassing when a country ran by a communist party demonstrates to the markets that they're willing to let free market forces fuck big companies that get over leveraged, whilst we would immediately use public money to prop them up.

    I'm aware communist in name only but still...
    TIL we have crony capitalism while China has true capitalism?!?

  18. #3258
    Movember 2011Movember 2012 Nordstern's Avatar
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    10-15% correction happening? Place your bets!
    "Holy shit, I ask you to stop being autistic and you debate what autistic is." - spasm
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    WTF I hate white people now...
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  19. #3259
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    Quote Originally Posted by tulip View Post
    It's embarrassing when a country ran by a communist party demonstrates to the markets that they're willing to let free market forces fuck big companies that get over leveraged, whilst we would immediately use public money to prop them up.

    I'm aware communist in name only but still...
    being honest here, but that's a very stupid sentiment. The CCP is not doing this because they believe in free market principles or even care about them in the slightest. If they believe in a market at all, it's one that serves the nation-state and furthers their pursuit of global hegemony

    They're letting these things fail because they want to cool down their housing market and this is gonna be a controlled demolition of that bubble. If things start to look like another GFC, there's a 100% chance of bailouts and the government stepping in to buy/manage the toxic assets to firebreak the crisis, don't be naive lol

  20. #3260
    Liare's Avatar
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    literal communists-doing-capitalism-better-than-capitalists-scenes on display. again.
    Viking, n.:
    1. Daring Scandinavian seafarers, explorers, adventurers, entrepreneurs world-famous for their aggressive, nautical import business, highly leveraged takeovers and blue eyes.
    2. Bloodthirsty sea pirates who ravaged northern Europe beginning in the 9th century.

    Hagar's note: The first definition is much preferred; the second is used only by malcontents, the envious, and disgruntled owners of waterfront property.

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