What the collapse of a company owing $300 billion means for the world

is a symptom of a deeper malaise in the Chinese real estate market.

Its even worse than that because retail investors in China use real estate as their primary investment vehicle. Where as someone in the USA might put money in a 401k for retirement or a brokerage account for investing, those don't exist (in the reliable way) in China. So many regular people's nest egg is tied up in real estate. So this isn't just the real estate market getting wiped out, its millions of working class people's life savings just evaporated.

How did it get so bad? Is there a tl;Dr anywhere that explains it fully?

That's the problem with investors, if they're not making more money than last year they find a way to fuck the rest of us. Either they pressure companies to lay off workers, they pressure the government to cut taxes, lower pesky labour and environmental regulations, or just handover cash in the form of a subsidy or bailout.

Either way they get our money somehow and enshittify our lives. If there's no hell we'll need to invent a special kind of justice for these people.

Probably won't hurt the investors, they'll get paid. But all the individual contractors who worked for the company are very unlikely to actually see payment.

The company owes $300B on $245B of assets. Unsecured creditors are among the last on the list to be paid back, and at least some of those are contractors who did work for the company and haven't been paid yet.

Hurts the customers, like lower-middle class people that put their life savings down to buy a home and never got one.

I care a lot about what happens to them. I hope there is a hell just so they can burn in it.

"investors" in this case include middle class Chinese citizens, I think that's worth caring about

I'm not saying it's ideal or healthy.

But I don't see how the west would have an upcoming issue with real estate.

People are still willing to pay increasingly large amounts of money for real estate and when locals can't afford it they just bring in immigrants.

I'd be interested to know how the real estate valuation in the west is going to decrease.

Considering quarterly numbers in a vacuum… sounds strangely familiar. Feels like we’ve done this many times before, but we still keep on repeating the same mistakes.

They just write it off 😃

https://m.youtube.com/watch?v=BAjxn2US7J8

Until it gets down to paying small businesses and individual contractors, then all of a sudden the money is all gone and I don't even recognize you, señor.

Even here the system will be rigged in favor of big investors vs small investors vs people who bought an asset and will get squat. Because working class who gave them money upfront to purchase an appt or house will be the last one in the collectors queue.

But your response is accurate to the "claim" that investors will be hurt. Media is so messed up that they don't even mention the customers that will get the worse impact than investors.

I don't think you quite understand that in this case, it's millions upon millions of working and middle class people who put most of their life's savings into this.

That's literally what the return on all the other investment is for: the assumption of risk.

I guess it's the same shift in mentality as the credit card processing machine asking for a tip for everything by default.

So you're in the corner of the working class, and playing the tiniest violin at their suffering?

Are you sure you just an awful person, or do you not read?

You know, sometimes it's really obvious when a person is a broke ass jealous loser.

Quickly before they fuck up D&D even further

Probably not very much.

1. Unless I’m mistaken this is a Chinese company trading on the Chinese market. Unless someone was specifically looking to be in the Chinese real estate market (which was very hot about a decade ago iirc), they wouldn’t have a lot of exposure. I think the Chinese market has been in the shitter recently, so I’m not sure who’s holding them right now
2. Retirement funds (pension funds and 401k target date funds, which is where most of the money is these days I believe) skew very conservatively. They spread their money across markets (so like 5% tech, 8% utilities, 7% municipal bonds, whatever). They might have a chunk in a bucket of “foreign” markets, but even those would be spread across multiple industries. I’d be surprised if any of those funds had more than a fraction of a percent in a single company like this.
3. Target date funds get their name from the fact that they’re investing with the expectation that you’ll retire at 65, and the closer that date gets, the more conservative the investments become. People who are retiring soon will have even less exposure to this, and people who are retiring in 20 years will never know this happened.

The real question is whether there’s going to be a ripple effect but it’s not looking like that yet.

Yes, both stock and bonds. But the stock and bonds have been trading near zero for a couple years so the damage was done in '21.

The problem is that those ghost cities aren't actual cities. The housing is largely worthless and uninhabitable, crumbling before it's even finished, often only "finished" to look that way from afar. You can't actually do anything with it other than tear it down.

Think of how U.S. conservatives are disgusted by any idea of a progressive experiment. That is how the conservative Chinese gov't would respond as well.

I think China has complete control of many of their companies so it’s a tad bit different than us.

Thats not what liquidation means.

To turn over to a trustee one's assets and accounts, in order that the several amounts of one's indebtedness may be authoritatively ascertained, and that the assets may be applied toward their discharge.

In America, the company would be handed a fat check.