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China's Evergrande Problem
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<blockquote data-quote="vantexan" data-source="post: 5006694" data-attributes="member: 24302"><p>Was just watching a video about this. Real estate investing is one of the few avenues that average Chinese have to increase their wealth. Evergrande was doing "pre-sales", selling units before they were even built. A lot of them. And usually in China one has to put down 50%. Only Evergrande didn't build many of these units after taking the money. A lot of people are getting burned. And China's local economy depends very much on real estate. And so far the CCP hasn't given any indication they're willing to bail Evergrande out. The fact is Evergrande and other Chinese companies were depending on continued high growth and have way overextended themselves. And it's catching up with them. Evergrande has a lot of bonds due for payment on Thursday and every indication is they will default on them. Evergrande appears to be China's Lehman Brothers, and if China's economy collapses it will very much ripple around the world. The U.S. economy is $19 Trillion a year. China's is $14 Trillion+ and growing. You can't have an economy that big collapse without it fouling up everything.</p></blockquote><p></p>
[QUOTE="vantexan, post: 5006694, member: 24302"] Was just watching a video about this. Real estate investing is one of the few avenues that average Chinese have to increase their wealth. Evergrande was doing "pre-sales", selling units before they were even built. A lot of them. And usually in China one has to put down 50%. Only Evergrande didn't build many of these units after taking the money. A lot of people are getting burned. And China's local economy depends very much on real estate. And so far the CCP hasn't given any indication they're willing to bail Evergrande out. The fact is Evergrande and other Chinese companies were depending on continued high growth and have way overextended themselves. And it's catching up with them. Evergrande has a lot of bonds due for payment on Thursday and every indication is they will default on them. Evergrande appears to be China's Lehman Brothers, and if China's economy collapses it will very much ripple around the world. The U.S. economy is $19 Trillion a year. China's is $14 Trillion+ and growing. You can't have an economy that big collapse without it fouling up everything. [/QUOTE]
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