The Federal Reserve Warns About Evergrande

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Plea for help, other chinese property developers sent its first direct warning about potential global contagion. this monday, and in it the fed pointed specifically indebted developer) warning that china’s ongoing in china, which could further strain global evergrande as we know, sparked fears of contagion since then, we’ve seen that several other and as we will discuss in

A moment the panic the federal reserve warned that given the and its global ties, “financial stresses in through a deterioration of risk sentiment, now this is quite a change for the fed as the debt problems of evergrande seem particular a big deadline for evergrande occurs today, evergrande missed the initial interest deadlines there’s been no indication that evergrande

Trigger cross-default clauses among their it is a little bit surprising at the time of a wire transfer, but that could still happen today. secrecy, allowing evergrande to meet some evergrande did raise around $145 million in in hong kong-listed hengten networks group apart from hengten, evergrande also sold its this should scrape together enough cash to make this payment.

More than a million home buyers are waiting may owe money to just as many construction workers, painters, landscapers and other employees. the onshore bonds are local currency denominated the offshore – dollar denominated bonds have no legal claim on onshore assets. the real question here is to what extent china it seems at the moment that xi is more intent ashmore group,

Blackrock, ubs and hsbc are and recent news articles say that goldman a lot of the investors who hold these bonds bonds in their offshore bank accounts or family offices. the ministry of housing and urban-rural development across china to supervise funds for evergrande’s under this oversight, the money must first additionally, beijing appears to have urged it’s unclear

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Whether his fortune is big evergrande’s liabilities, which are over $300 billion dollars. at the moment evergrande’s dollar denominated value as investors brace for what could be now obviously the best way to deal with this founder to post a twitter poll asking his bond holders or not, but that doesn’t seem money is becoming harder to come up with for of borrowing has

Soared, fewer people are property companies have $40 billion of payments while evergrande is in a sticky situation the company faces large principal repayments to meet than the interest payments it has grappled with in the last few months. in beijing will loosen up on the three red lines before it is too late. interest payments that were due a few days ltd – which is a

Unit of china evergrande happened with that payment, but the firm may already be in default. but what we are seeing now is that evergrande’s panic that contributed to a wave of defaults amongst other developers. kaisa’s whose shares were suspended in hong their bonds maturing next year are trading at 32 cents on the dollar. making home buyers even more reluctant to

Just recently evergrande announced that home sales had fallen by 97%. but better-quality borrowers, such as those now seeing the sharpest debt selloff since huarong ignited doubts over the level of support bonds slump, despite the firm being rated 50 times the cash and cash equivalents of evergrande. what this tells you is that it is pretty much and that then means there

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Are bankruptcies in the pipeline. interestingly a lot of smart investors are this is based on a few things – they are where, as investors cut risk they will move in the united states during the global financial they are also betting on the chinese currency to get in front of a lot of sovereign wealth and euro denominated bonds into chinese government so, let’s get back

To the federal reserve’s well, when questioned about the fed’s warning powell said that the problems seem particular with the u.s. corporate sector, so it is possible they did warn about meme stocks in the same report. in the affected sectors – we are not seeing a broader panic. in recent years, chinese authorities have to avoid the risk of asset bubbles in a sector

This does not appear to have worked very well, now that the real estate industry is contracting some regions appear to be acting to prevent price declines. cent at a project where they had recently bought homes. in september, local authorities introduced newly built homes being sold for less than historically this type of price control has created by government stimulus

In the us and around the world. the contribution of the property sector to we shouldn’t expect to see bailouts of investors see things like reserve requirements and mortgage well, a lot of course depends on how the chinese china’s real estate activity is slowing, them like evergrande are diversified into a slowdown in china’s housing market could this could spread

Through global trade channels complex internationally, as china is a huge buyer of commodities. we don’t really need to worry too much about in truth the rest of the world is reasonably in the event of a big sell off you might even markets and into the united states in a flight to safety. the extent to which we see international contagion right now, a restructuring

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Looks like the most likely outcome. it explains how the rise and fall of evergrande have a great day, and talk to you soon, bye.

Transcribed from video
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