Evergrande is defaulting on their loans and bonds related to their real estate holdings. They don't produce anything per say that would effect US supply chain that I know of.
They are dumping their real estate at below market value to pay creditors. This will cause a crash in Chinese real estate. They also aren't paying their contractors which can cause them to default as well.
This also has a compound effect of lowering wages and reducing purchasing power of contractors, laborers, and foremen.
Yep, huge snowball effect. Which is why I expect China will try and bail them out even though they said they wouldn't.
Real estate is too expensive because materials and transportation have gone up too much. They're operating at a loss to maintain cashflow, a lot of businesses do this, especially now, short term pain for long term gain.
I don't doubt that.
My understanding was they borrowed a ton to build when demand was high. Then demand dropped off and they were left with all this property they couldn't sell. Then bills came due; here we are.
yup, same is true where I live, I don't know where they get the money to put up all those luxury high rises, but if they can put butts in those homes, who cares. Just wish they'd fix the freeway exit, it's a fucking nightmare to get off on Biscayne and 36th.
(post is archived)