Posted December 9, 20214 yr So how bad is this? The news that they've defaulted is still fairly muted, but in the previous weeks, I've heard some say that this could trigger really bad things globally. Some of you know better than I do, you know who you are. The rest of you, don't pretend that you do.
December 10, 20214 yr 20 hours ago, The_Omega said: So how bad is this? The news that they've defaulted is still fairly muted, but in the previous weeks, I've heard some say that this could trigger really bad things globally. Some of you know better than I do, you know who you are. The rest of you, don't pretend that you do. The answer likely is -- it's really not that big a deal for markets. Obviously, the failure of one of China's largest property companies is a negative, and there will be contagion to other players in the industry. But China will do what it always does -- lie and screw over foreigners. Holders of foreign bonds will get basically zero, while domestic creditors will get "bailed out" in the form of takeback paper that allows them to avoid writedowns because they'll mark the paper at par despite it being crap. It's basically China's go to move...just lie and avoid the markdowns. Their banking sector has been doing it for decades. The market had months to prepare for this. Mass contagion and panic comes from overnight failures like AIG, not things everyone knows will happen.
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