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- 🔔 Hey, did you hear about that Chinese property developer?
🔔 Hey, did you hear about that Chinese property developer?
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Sum up the market mood today Tim...
Newsquawk
Full credit to the guys at Newsquawk for the meme, especially as humour is in short supply for anyone long risk...
It's an especially sad day for Germany's DAX.
This should have been a day of celebration, as 30 (finally!) became 40...
Here's how the 10 new additions have fared...
Ugly!
Evergrande's woes are 100% common knowledge now, with #Evergande trending on Twitter, and some brave lunatics are even looking to get long the developer and frontrun CCP intervention...
As 'contagion' narratives pick up steam, it would be no surprise to hear from the state before Chinese markets reopen on Wednesday...
Bloomberg reckon that market contagion will test Xi's resolve 👇
How far will President Xi Jinping go with his crackdown on China’s real estate sector?
The question has suddenly become an urgent one on trading desks around the world. After months of treating the crisis at indebted developer China Evergrande Group as largely contained, investors on Monday rushed to price in the risk that Xi will miscalculate as he tries to curb China’s property-market excesses without derailing the economy.
If I had to predict it, I'd say that we'll see some soothing words this week, which will calm a few nerves and see some 'profit-taking' rallies.
As for the economy... Well, I think it's already 'derailed'.
Growth was already slowing back in 2019, which seems to have been forgotten amid the Covid noise... 👇
China's old economic model is done, and it was done even before they announced the latest measures to promote 'common prosperity'.
The new model is unproven, and looks heavily skewed towards social outcomes rather than economic growth...
We'll have to see how it plays out, but I'm not optimistic.
In the meantime, expect to see more developers going to the wall...
Although perhaps not as brutally as these Sinic Holdings...
-86% in a single day 👇📉
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Sticking with the Evergrande theme, who remembers Andrew Left?
He's the guy who was relentlessly bullied by WSB during the great GameStop shortseller massacre of 2020... 👇
Well, it's not the first time he's been bullied.
He spotted Evergrande's 'creative accounting' back in 2012 and published a report in which he even called the chairman out... 👇
In return, the Hong Kong SFC started proceedings against him, and eventually he was banned from trading for 5 years... The ban ends next month.
Ironically, they probably did him a favour, as the stock continued to rally well into 2017...
Here's the presentation 👇
If it was so obvious 9 years ago, just how much is hidden under the surface...?
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Let's wrap up with a podcast recommendation
Dario Perkins was on the Market Huddle this weekend.
Currently at TS Lombard, he has also worked at the UK treasury & the Bank of England.
Dario takes a much wider perspective of the world, broader drivers and more secular themes including demographics, MMT and the big picture rather than obsessing over every tick in the S&P 500.
It's well worth a listen.
Spoiler: If you believe that our 'leaders' are truly in control of anything, your world view is about to take a serious knock... 👇
"What if we just make the line on the chart thicker?"
"We can't, we did that last time"
Fantastic listen (Dario's interview is the first hour 👇)
