Evergrande losers take company executives hostage

Via Straits Times:

Footage of Evergrande’s management being held hostage in company offices by anxious retail investors made the rounds on China’s social media earlier this week.

“I have with me Nanchang’s top Evergrande representative surnamed Chen,” said WeChat user Yang Qiwen, referring to the city in Jiangxi province in south-eastern China. The posting included a photo of a man lying on a floor.

“He can’t leave the office. There are more than 300 of us (investors) stopping him,” Yang added on one of at least three WeChat groups discussing the company’s dire straits.

It’s war!

Security personnel in the Chinese city of Shenzhen on Thursday took away protesters who gathered outside the headquarters of cash-strapped real estate developer China Evergrande Group.

Iron ore still cratering:

With the “coconuts phase” ending for FMG as it gaps into the bottomless pit:

Mums and Dads to take Twiggy hostage?

Houses and Holes
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Comments

  1. The fed broke it. Now, they own it.

    Over the years Anne Stevenson-Yang would often use Evergrande as the poster child of the China property Ponzi. If you listen to any of her interviews she would always mention Evergrande. Of course, no one can time these things but the warning signs were there.

    • Hugh PavletichMEMBER

      What Would A Restructuring Of Evergrande Look Like? … OPINION Anne Stevenson – Yang … Forbes

      https://www.forbes.com/sites/annestevenson-yang/2021/09/13/what-would-a-restructuring-of-evergrande-look-like/?sh=617e7452823c

      … and too …

      China Insights – Youtube

      https://www.youtube.com/channel/UCwjvvgGX6oby5mZ3gbDe8Ug/videos

      Interestingly, the Chinese Communist Party appears to have articulated the sheer destructiveness of housing inflation particularly well … extract …

      China’s ‘Volcker moment’ is a mounting risk to the global recovery … OPINION Ambrose Evans – Pritchard … UK Telegraph

      https://www.telegraph.co.uk/business/2021/09/01/chinas-volcker-moment-mounting-risk-global-recovery/?WT.mc_id=e_DM1485705&WT.tsrc=email&etype=Edi_Edi_New_Reg&utmsource=email&utm_medium=Edi_Edi_New_Reg20210902&utm_campaign=DM1485705

      ‘… The Party has concluded that the house price spiral is triply corrosive: it is a financial black hole; it is the chief cause of cancerous inequality; and it is a strategic threat through the demographic channel. …’

      • “Confidence in the government’s wisdom and ability to guide Chinese families to a future of prosperity and a belief that investment in property and property-based assets could not fail must both take an unrecoverable hit.”
        – same for Oz families one day?

      • So typical of the propaganda though isn’t it.
        It’s not that this edifice has been unstable for a long time (ie. look at the whole shadow bank lending in China) and finally collapsing under its own weight.
        No, it’s that President Winne the Xi is deliberately bringing the market down.
        Who swallows this garbage?

      • It pains me to say it but the CCP are absolutely right about high house prices being very socially corrosive.

        They did leave it a bit late though with Chinese housing affordability being 65% worse than Syd/Melb.

        The impacts of this will flow out all over the world. Not quickly mind you.

        I expect the CCP will be quite happy for wealthy Chinese to continue speculate on housing in western democracies – exporting social corrosion to its adversaries.

        The CCP’s actions won’t have a linear impact on Australia’s 30 year malinvestment binge in unproductive housing – more likely to be a 2nd derivative effect.

        • Hugh PavletichMEMBER

          Evergrandes near collapse discounts offers to investors … Stephen Engle of Bloomberg explains … 28% for residential, 46% for office space, 52% for parking lots and retail space

          Evergrande Offers Investors Discounted Property in Lieu of Cash … Bloomberg

          https://www.youtube.com/watch?v=RaWdNUqhFD4

          … and catering for the speculator market in the main (according to Anne Stevenson – Yang), Everergrande, with about 1.5 million buyers having paid likely 30% plus deposits for uncompleted residential units.

          Evergrande completed about 600,000 residential units last year. It has likely in excess of 800 projects in 230 metros throughout China.

          Check out just one of the Evergrandes stalled developments on the outskirts of the (6.6 million population) central China city of Luoyang, comprising 5 towers of condominiums and 16 blocks of apartments … reported by Yew Lun Tian of Reuters …

          At unfinished Evergrande apartments in central China, buyers seek answers … Reuters

          https://www.reuters.com/world/china/unfinished-evergrande-apartments-central-china-buyers-seek-answers-2021-09-17/

          What the Global Times (CCP mouthpiece) had to say back in 2018 … excerpt …

          Housing costs key constraint to Chinese consumption … Yi Xianrong … Global Times

          https://www.globaltimes.cn/content/1121946.shtml

          ‘… High real estate expenses have two aspects – housing prices and rents are both too high. A reasonable home price should be three to six times the median household ( individual … top 3.0 times for households ? – HP comment ) income. That means a family with an average income can buy a house with three to six years’ annual income. The house price to income ratio in China is above 50 in the first-tier cities and 30 to 40 in the third- and fourth-tier cities.

          But the whole country, from policymakers to real estate speculators, has turned a blind eye to the problem. These high housing costs are squeezing the consumption ability of Chinese people.’ … read more via hyperlink above …

          … and what the CCP said recently via Ambrose Evans Pritchard of the UK Telegraph …

          China’s ‘Volcker moment’ is a mounting risk to the global recovery … OPINION Ambrose Evans – Pritchard … UK Telegraph

          https://www.telegraph.co.uk/business/2021/09/01/chinas-volcker-moment-mounting-risk-global-recovery/?WT.mc_id=e_DM1485705&WT.tsrc=email&etype=Edi_Edi_New_Reg&utmsource=email&utm_medium=Edi_Edi_New_Reg20210902&utm_campaign=DM1485705

          ‘… The Party has concluded that the house price spiral is triply corrosive: it is a financial black hole; it is the chief cause of cancerous inequality; and it is a strategic threat through the demographic channel. …’

    • Absolutely.
      Ultmately ASY will end up being right on a lot of things r.e. China.
      Evergrande WAS the Chinese growth model….
      Question is what comes next if the old growth model is gone.

      • I’ve got a sneaking suspicion that the CCP knows that there’s not much runway left on the flow of $ into China from western democracy QE.

        The CCP know that the West’s money printing has produced Asian GDP and Western consumption – not productive western GDP. I suspect the CCP knows that it needs to focus inward for a sustainable economy rather than relying on the West for consumption to keep its factories busy and workers employed – which may be interrupted once the West’s fiscal stimulus fades and what’s left of the West’s real economy becomes observable.

  2. Display NameMEMBER

    As I think you suggested more than 12 months ago, the Iron Ore magnates should have IPO’d back then. Probably mostly downside from here on in. Still profitable, but not rivers of gold anymore.

  3. Like bina says. Everything will be fine because China has a very big economy with lots of foreign reserves and very clever people who are in charge who have lots of levers and buttons. There’s money to be made, but you need to be quick on your feet and have your wits about you. /sarc

    LOL

  4. Spoke with a colleague yesterday on this, he didn’t know anything about it, but then realised his mate (who married a wealthy Chinese chick), her dad was kidnapped and taken to some empty apartment buildings and held there for # months…her dad, was acting like a broker between these property giants and lenders, but he said it wasn’t legit

  5. Wouldn’t it be great if, instead of bankrupt real estate sharks jumping off buildings, we get to see bankrupt real estate sharks being thrown off buildings?

    Jeez, I’d pay good coin to get a seat at that gig, particularly if HRH was on the list of throwees.

  6. I confess it’s unclear to me the consequences of the collapse of these china companies on Australia or even WA for that matter. I guess interest rates will stay permanently low. I guess ore prices will tank. I guess gold prices will sky rocket. I guess house prices will continue to skyrocket indefinitely as well. I’m thinking a lot of mining workers are going to be let go in the near future in WA. I guess that will put an end to the fake skill shortages.

    • I believe that Evergrande is evidence of a new, broad CCP policy objective which we just can’t see yet.

      This looks like a massive stupid home goal by the CCP from our Western economic perspective.

      If we step back though and assume there is some much larger strategic objective (against the CCP’s adversaries) then the Evergrande failure will (in time) take on a new context.