Buckle up Anons. China’s Evergrande has defaulted. This effects their economy, Asia’s, and $130 billion or more of the US economy. If this collapses the world economy as it’s been said, this is one of those final Red Lines.
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The middle and up middle class have no other way of storing wealth than property. They don’t trust stock exchange. Hundreds of millions of people own second or third apartments in these ghost cities that are empty, purchased as investment. They pay the mortgage waiting eternally for buyers who are never gonna come.
Now basically all of the developers are going under. The music has stopped. So now they have another problem. If they put all the homes on the market to recoup money for investors and pay bills, the market crashes and everyone loses their investments.
They are fucked. They built the homes and their entire economy without balance. These hundreds of millions of empty homes are not affordable for most Chinese. They are not priced reasonably, like they should in a free market. They are priced for a market that doesn’t exist, and all of the lending and credit and wealth is based on this market that doesn’t exist. If they allow the market to dictate the cost of these homes, and just sell them at what the market will pay, it crashes the economy.
So they can’t sell them at their current prices cause there is no one to buy them. And if they just fire sale them, 300 million people lose their life savings and start from zero.
I don't see how they've held on for as long as they have - even factoring the conterfeit they print, as they've done since forever with the complicity of the fed.