I mentioned before how one gentleman answered when asked how he went bankrupt. “Slowly at first, then all of a sudden” he replied.
Evergrande is China’s largest and most significant property lender being 6 times larger than Lehman Brothers.
Ironically, they seem to have gone into receivership on the 13th birthday of Lehman’s bankruptcy filing (unlucky for some as we used to say).
Evergrande’s business model was lending funny money to build millions of empty units in a nation with a precipitously declining population. What could possibly go wrong there, you might ask?
Evergrande may be the largest, but they are one of many. Their fall may trigger lots more ‘contagion’.
Confidence tricks require confidence and when you lose it, things unravel so quickly it can make your nose bleed.
Whilst I did post an article the other day warning of China’s many chickens coming home to roost, this was not meant to be optimistic.
When a large and militaristic nation gets into financial strife (as both Germany and Japan did just prior to WW2) they tend to look for a way to divert their citizens attention and top up their bank balances from other people’s assets (by invading their neighbours).
I just wish Turd hadn’t cancelled those submarines. Apparently, so do lots of other military planners who have suddenly lost interest in transgender issues.
As usual, I’m praying that I’m wrong.
You can read more about the Evergrande saga at Zero Hedge here.
