Chinese major RE company is in trouble

I was thinking September it hits the fan. Been thinking that for about 1.5 years now. Well it is early now.

Country Garden, the country’s biggest developer by sales, has been pummeled in the markets twice in the past week. Investors are panicked by two events: On Aug. 1, the company scrapped a plan to inject cash into the business, something it needs. This week, it missed two interest payments on bonds. The bond payments, which are owed in U.S. dollars, are relatively small in value, but by missing them, the company put itself at risk of default.

Country Garden’s market value has been more than halved since the start of the year. Traders were swapping some of its bonds for as little as 10 cents on the dollar this week, a sign of doubt that they expected to be paid back in full.

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https://www.cnn.com/2023/09/06/business/china-country-garden-troubles-explainer-intl-hnk/index.html
While a deadline to repay one bond has just been extended, it continues to stare into an abyss of nearly $200 billion in liabilities — and faces mounting pressure to pay up…

What’s worse, the outlook for its core business is darkening. On Friday, Fitch Ratings cut its forecast for new home sales in China, saying it expects a drop of 10% to 15% this year, “steeper than our previous estimate of a 0% to 5% drop.”

DB2

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Pop Kapoof!

The toast is toasted, but the toasters are not listening. China is in deep shyte.

david fb

Agreed. Will it impact us? Will it impact the S&P 500 or the QQQ? US Treasuries?

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You never know bjurasz - The Butterfly Effect:

The butterfly effect concept has since been used outside the context of weather science as a broad term for any situation where a small change is supposed to be the cause of larger consequences.

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