No, but the real story is not Evergrande. It's the collapse of the Chinese real estate market, which has been in a bubble for a decade.
The ratio of the China real estate market to the equity market is 4x higher than the U.S. Remember what happened in 2008 with a modest sized housing bubble. Imagine that happening to China, but after a decade of overbuilding combined with tens of trillions of dollars of pure speculation.
Ponzi schemes can only continue so long as both sides expect the future to be bright at the end of the day.
I agree with you that Evergrande is just the tip and the Chinese real estate market as a whole is a huge bubble. My feeling is that Evergrande acts as the first bubble to pop, causing the entire housing bubble to burst, taking with it the housing bubble around the world (Evergrande and co have been doing shady things with their investment money and essentially redirecting it to grab up real assets around the world pushing up prices of real estate artificially high in US, Australia and I believe Canada as well).
I might be wrong about Evergrande being the first bubble to pop, but I am trying to find out a precipitating event that is like a hard date after which this Chinese bubble has to pop. Somehow I feel like this date would coincide with the debt coming due in US.
BTW, do you know how much is the debt thats due on 18th? I know the US debt is divvied up amongst a tons of bonds, t-note, t-bills and what not, and each set comes due at a particular date. Would be interesting to see whats due on 18th.
Anyone know definitively the drop dead date for Evergrande ?
No, but the real story is not Evergrande. It's the collapse of the Chinese real estate market, which has been in a bubble for a decade.
The ratio of the China real estate market to the equity market is 4x higher than the U.S. Remember what happened in 2008 with a modest sized housing bubble. Imagine that happening to China, but after a decade of overbuilding combined with tens of trillions of dollars of pure speculation.
Ponzi schemes can only continue so long as both sides expect the future to be bright at the end of the day.
I agree with you that Evergrande is just the tip and the Chinese real estate market as a whole is a huge bubble. My feeling is that Evergrande acts as the first bubble to pop, causing the entire housing bubble to burst, taking with it the housing bubble around the world (Evergrande and co have been doing shady things with their investment money and essentially redirecting it to grab up real assets around the world pushing up prices of real estate artificially high in US, Australia and I believe Canada as well).
I might be wrong about Evergrande being the first bubble to pop, but I am trying to find out a precipitating event that is like a hard date after which this Chinese bubble has to pop. Somehow I feel like this date would coincide with the debt coming due in US.
BTW, do you know how much is the debt thats due on 18th? I know the US debt is divvied up amongst a tons of bonds, t-note, t-bills and what not, and each set comes due at a particular date. Would be interesting to see whats due on 18th.
The debt ceiling has been raised by a small amount. This will keep the government afloat for a few more months.