i do hope evergrande upends china's economy.
like evergiven clogged up the suez. at least for a bit.
---------- Forwarded message ---------
From: Venkatraman Anantha Nageswaran
Date: Tue, Sep 28, 2021 at 9:28 AM
Subject: My column in Mint today: 'Evergrande: China may have left the barn door open for too long'
To:
From: Venkatraman Anantha Nageswaran
Date: Tue, Sep 28, 2021 at 9:28 AM
Subject: My column in Mint today: 'Evergrande: China may have left the barn door open for too long'
To:
Evergrande: China may have left the barn door open for too long
5 min read . Updated: 27 Sep 2021, 10:23 PM IST
V. Anantha Nageswaran
Debt levels may have already been too high by the time Beijing placed curbs on over-leveraged firms
On Friday,The Wall Street Journal reported, citing "people familiar with the matter", that Evergrande had failed to make its coupon payment on a US-dollar bond. What is not clear, at the time of writing, is if it missed the payment on a domestic bond as well on Thursday (23 September).
There is a mixture of hope and opinion that Evergrande would not turn out to be China's 'Lehman moment' for the simple reason that China can simply order its banks to start lending to the real-estate company and all would be well. The truth is that 'nobody knows anything' (on.wsj.com/2XYdBQk). None of us know the extent of the rot inside Evergrande. According to a report published in 2016, the company had almost 400,000 car parking spaces on its balance sheet valued at $7.5 billion, roughly equivalent to its entire equity base (on.ft.com/3lYsnPf). Further, if Evergrande hid its debt, as Caixin reports, why not other firms?
After all, one year ago, no one really predicted that Evergrande would come to this state and that there would even be newspaper reports that the Chinese government would let the firm collapse. Nor did economists, stock market analysts and commentators predict the turn that China's economic policy would take from last year onwards. Therefore, when it comes to China, we must take most expert opinions as no better than the 'knowledge' we derive from "WhatsApp University", as the online quip goes.
5 min read . Updated: 27 Sep 2021, 10:23 PM IST
V. Anantha Nageswaran
Debt levels may have already been too high by the time Beijing placed curbs on over-leveraged firms
On Friday,The Wall Street Journal reported, citing "people familiar with the matter", that Evergrande had failed to make its coupon payment on a US-dollar bond. What is not clear, at the time of writing, is if it missed the payment on a domestic bond as well on Thursday (23 September).
There is a mixture of hope and opinion that Evergrande would not turn out to be China's 'Lehman moment' for the simple reason that China can simply order its banks to start lending to the real-estate company and all would be well. The truth is that 'nobody knows anything' (on.wsj.com/2XYdBQk). None of us know the extent of the rot inside Evergrande. According to a report published in 2016, the company had almost 400,000 car parking spaces on its balance sheet valued at $7.5 billion, roughly equivalent to its entire equity base (on.ft.com/3lYsnPf). Further, if Evergrande hid its debt, as Caixin reports, why not other firms?
After all, one year ago, no one really predicted that Evergrande would come to this state and that there would even be newspaper reports that the Chinese government would let the firm collapse. Nor did economists, stock market analysts and commentators predict the turn that China's economic policy would take from last year onwards. Therefore, when it comes to China, we must take most expert opinions as no better than the 'knowledge' we derive from "WhatsApp University", as the online quip goes.
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