What’s Brewing ? Another Chinese Black Swan.

EVERGRANDE: It’s China’s Second largest Real Estate Developers and has a Ballooning DEBT of over $300 BILLION. Currently it’s in NO POSITION to repay back Debt to its Bondholders or even complete it’s outstanding Projects. It’s a Fortune 500 Company.

It’s Stock Price was down over 10% today and sending a fear wave across the markets. Does China have more trouble to export after Coronavirus?

China for a long time has had issues with its piling Corporate Debt. Till now it has been protected as Govt. Steps In to Bail out many a times.

Last month the Chinese Govt. bailed out HUARONG Asset Management Company. Because they wanted to save themselves from a Lehman-like collapse.

How much will the Chinese govt. be inclined to save EVERGRANDE needs to be seen, but looking at the current situation, it will get really messy unless Govt. renders its support and restructures the DEBT. This week could be critical for the company as they owe over $100 Million due in interest payment to banks.

China has a long trail of businesses failing. In 2020 more than 200,000 Chinese companies declared bankruptcy. And CORPORATE CHINA has over $1.2 Trillion due in next 12 months.

SNMA.

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