Plantagenet wrote:The Evergrande problem may be worse for China then Lehman was for the US.
chanos-warns-evergrande-crisis-could-be-worse-lehman-china
Evergrande is not unique in China. Just as the Lehman collapse in the USA led to problems for the whole banking sector, a collapse at Evergrande in China may lead to problems for their whole construction industry......and that could wind up being worse for China then Lehman brothers was for the USA.
Complicating things for China is the fact that they are a communist country, and the CCP may actually want to see the Evergrande collapse as a way to lower the price of housing throughout China and build socialism. Already the CCP has attacked China's own tech sector, resulting in a collapse of stock prices there. Its not clear if the CCP is going to bail out Evergrande, or stand back and give it a little push towards collapse in hopes that the socialist utopia will produce something better..
Does the Chinese Communist Party really want its legacy to be that it bailed out the Evergrande corporation?
Cheers!
Newfie wrote:That makes me lean toward Ponzi.
vtsnowedin wrote:AdamB:
Do you have a point there or a position?
I can see you are skeptical but in which direction is unclear.
AdamB wrote:I think I have a point. That within a communist system, it is amusing to think that what a major economic actor is doing, or what outcome they arrive at, has anything to do with free market principles. ......
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AdamB wrote:vtsnowedin wrote:AdamB:
Do you have a point there or a position?
I can see you are skeptical but in which direction is unclear.
I think I have a point. That within a communist system, it is amusing to think that what a major economic actor is doing, or what outcome they arrive at, has anything to do with free market principles.
As a large example, the decision made by the state can then be applied to guide/instruct/force others to pay better attention to keeping their own houses in order. All doing exactly as the ChiCom leadership instructs.
Unlike unbridled greed, combined with laws that usually generate expected consequences for the evil doers in a more free market economy, it behooves all of us to not forget that pretending to run a free market state inside a communist state is just that...pretending.
Outcast_Searcher wrote:I think there's PLENTY of corruption and incompetence in ANY very large economic system.
AdamB wrote:Outcast_Searcher wrote:I think there's PLENTY of corruption and incompetence in ANY very large economic system.
Sure. The main difference being that in a mostly free market system (of which there are fewer and fewer around the world nowadays), bad actors can get caught, are fined, jailed, barred from practicing law, whatever.
With the ChiComs, a head ChiCom will decide what the punishment should be before guilt is demonstrated (if there is even any guilt involved), and who it should be inflicted upon.
I'm not convinced either system gets a gold star vs. the other, re overall finances.
Re the US -- that remains to be seen -- hopefully I'm dead before the "big one" hits,
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