MSM: Could Evergrande’s default on debt and collapse topple China’s economy?

Sharing is Caring!

In China, embattled real estate giant Evergrande faces a major moment of truth this week. The company owes an estimated 300 billion dollars, and is expected to default on bond payments.

Evergrande operates and develops 1,300 real estate projects across China and employs 200,000 people. The company financed its breakneck expansion with credit and bond issues. But the pandemic has paralyzed its operations. Its debt equates to two percent of Chinese Gross Domestic Product.

Evergrande was always thought to be ‘too big to fail.’ If it topples it could take a number of banks down with it, like Lehman Brothers did in 2008.

See also  Pelosi’s $5 Million Stock Deal Could Soon Be Investigated…

The risk of defaulting has prompted a sell-off. Evergrande stocks have lost 80 percent of their value since the start of the year.

Bitcoin and other cryptocurrencies were crashing Monday amid a global selloff in risk assets.

The tumble appears to have been triggered by the mounting problems at embattled property giant China Evergrande Group.

Bitcoin, the world’s largest cryptocurrency, was off 7% Monday to around $44,000. Ethereum, the second-largest cryptocurrency, was down 8% at around $3,100. Smaller coins were also posting declines, including Cardano, Binance, XRP, Solana, and Polkadot—the latter off 13% to $29.48.

See also  Reuters: China Evergrande Secures Bond Extension as Chairman Foots Project Bills

www.barrons.com/articles/bitcoin-drops-cryptocurrencies-evergrande-contagion-fears-51632131432

 

h/t Digital mix guy

1,571 views

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.