Like the write up thank you. My theory is ccp has power to “slow time down” so a blow up is off the table. But the underlying issue is 75% of property sales are to investors and there is already 16 years of oversupply for home owners based on only owner occupied transactions. That cycle has to come to an end. My estimate is china need to construction as %of gdp by half. If they do that in one year lots of pain. If over 30 years maybe less. But it has to be done.
I find it interesting that on this one I hear no debates about whether this is a liquidity or solvency crisis. It probably does not matter. I'm in camp that thinks China will fix it regardless and solve the moral hazard problem by politically destroying one or more of the billionaires that created the problem as part of their clean-up efforts.
Kyla, have you considered that Tether is known to be backed largely by commercial paper, but they will not disclose exactly what it is? It's rumored to be Chinese and could very well be Evergrande. That's all speculation and rumors, but if true, an Evergrande default might have a big impact on Tether and by extension Bitcoin and the entire crypto ecosystem. Food for thought.
Best write up I've seen. I'm still on the fence ATM but interested to see what develops...
Great work! Very informative and well-written
i love your newsletters! thank you for putting these out. so informative and interesting :)
any estimate of how much off-balance-sheet debt they could be looking at?
Like the write up thank you. My theory is ccp has power to “slow time down” so a blow up is off the table. But the underlying issue is 75% of property sales are to investors and there is already 16 years of oversupply for home owners based on only owner occupied transactions. That cycle has to come to an end. My estimate is china need to construction as %of gdp by half. If they do that in one year lots of pain. If over 30 years maybe less. But it has to be done.
I find it interesting that on this one I hear no debates about whether this is a liquidity or solvency crisis. It probably does not matter. I'm in camp that thinks China will fix it regardless and solve the moral hazard problem by politically destroying one or more of the billionaires that created the problem as part of their clean-up efforts.
Love all your work, btw! Keep it up.
Kyla, have you considered that Tether is known to be backed largely by commercial paper, but they will not disclose exactly what it is? It's rumored to be Chinese and could very well be Evergrande. That's all speculation and rumors, but if true, an Evergrande default might have a big impact on Tether and by extension Bitcoin and the entire crypto ecosystem. Food for thought.