Evergrande Contagion: Containment Or Spread? UPDATE
Ok. Today ,September 20th, Evergrande starts to miss their payments. Result:
Dow Jones currently down 900 pts....
Crypto is getting slammed across the board.
I'm sure its all a coincidence tho. ;)
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China had been slow rolling the news about Evergrande for weeks.......
Not anymore.
Yesterday morning, on the 13th anniversary of Lehman's bankruptcy, we get this news........
And now, late last night, we get this news......
https://www.zerohedge.com/markets/evergrande-suspends-trading-all-bonds
China's property market crashing. China's development companies getting hammered. And this one sentence in the article.....
"As contagion spreads, risk is also hitting (Chinese) banks whose shares are suffering their fastest selloff in seven weeks."
When the banks start getting hit, it's officially crisis time.
The big problem with Evergrande is that it used to be China's number one issuer of "commercial paper". Commercial paper is a debt vehicle, or a debt instrument. Simple explanation of commercial paper......
"""Commercial paper is a type of short term debt that companies issue and usually considered to be extremely safe for investors because its quickly repaid"""
Now when it comes to Evergrande, the "commercial paper" they have issued is very soon to be "worthless paper". And if you borrowed that "commercial paper"....say goodbye to your money.
The trick is, who exactly is holding that Evergrande "commercial paper"? What companies? Corporations? Banks? I'm guessing we will find out very soon.
Another article from yesterday. And the fact they had to come out and deny it is very troubling for the crypto crowd......
So Tether is based in Hong Kong. Half of their reserves are backed by commercial paper. But they never borrowed commercial paper from Evergrande...who was the largest issuer of commercial paper??
Tether can dispel all speculation by just telling everyone who they borrowed the commercial paper from? Very simple.
But nooooooooo. From the above article......
"The company(Tether) has repeatedly refused to disclose just who issued that commercial paper....."""
Seems like everything is on the up and up at Tether. Tether execs can be trusted...they would never lie or do anything shady.......
Whoops.
Just how far will the Evergrande contagion spread? We will have to wait and see. Anyone with their hand in the Evergrande "cookie jar" should remember that old Will Rogers quote.....
""I am more concerned with the return of my money than the return on my money""
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