Evergrande Crisis Intensifies

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The liquidity crisis at Chinese property developer Evergrande shook global markets this morning with stocks falling in Asia, Europe and New York.

The S&P 500 fell 2.1 per cent in afternoon trading, while the Nasdaq Composite slipped 2.6 per cent. The Vix, which measures expected volatility on the S&P, hit 26.5 — around its highest level since May.

Monday’s sell-off came after shares in Evergrande, the world’s most indebted property developer, closed 10 per cent lower in Hong Kong to hit their weakest level since May 2010.

Concerns about the broader health of China’s real estate sector triggered a wider sell-off, sending the Hang Seng Property index, which tracks a dozen listed developers, down almost 7 per cent to its lowest point since 2016. At 24,099 points, Hong Kong’s broader Hang Seng index closed at its lowest level since last October.

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Evergrande Crisis Intensifies
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Those "wealth management products" promised 13% returns. For comparison, the Madoff's "hedge fund" promised 12%.

samsonsoturian
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Patrick. I lived in China for 12 years. It’s not just large companies that have CCP members on companies boards. I was told companies with 100 or more employees has a CCP member on their board. Over a certain revenue a CCP member is required to be in management. All business of size has CCP involvement. I’m a former Wall Street corporate banker and was a real estate developer and owned a construction company after I left banking. I’m no genius but I saw this coming 10 years ago. The real estate bubble and the debt crisis shouldn’t be a surprise to anyone paying attention. The corporate debt, provincial and central government debt is out of control. Has been for several years. The CCP and the companies lie about their financials which is no secret. So as bad as it looks on the financials published, count on it being much much worse.

Kusa
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Professor Patrick Boyle you are the man. Thank you for all of your updates and please don't stop.

anthonyfry
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Thank you, Patrick. The best channel to learn about investing and finance. No hype, straight talk.

byzor
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Way to go, HSBC! Another "win" for you and all the Evergrande bonds you hold as you "grow" your Chinese market! Worked for that megabank for almost eight years... which was more than enough to see their hubris up close and personal, especially as it related to their U.S. banking/finance operations: "We drive Land Rovers and Jaguars; you Americans drive Honda Civics and Ford F-150 pickups. Our 'style' just doesn't mix well with your, well... your preferences."

johnc
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What I never expected to hear about a financial statement: "their balance sheet includes 500, 000 parking spaces"

taterkaze
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Patrick, excellent, clear, understandable and intelligent explanation. This is truly a scary event, and many people do not understand the ramifications. Thank you for your work.

Conservchick
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wait a minute! Credit Suisse is not involved in this one? then is not a crisis

tusam
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First time I see Patrick. Instant subscribe and bell notification. How can he be so concise and clear?

hangel
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Thanks for following this fascinating story. And the new set looks great - never lose the landline!

brianh
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"An unfinished parking lot in a Ghost city" - sounds like a good deal. But maybe that's just me.

benjamintreitz
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Nice presentation, one can easily hear a well educated fluid didactic speaker in Patrick. I will be tuning in often.

brett
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Thanks Patrick for the update, please keep us posted with the progress on this story

awright
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If I was an Evergrande investor, there's no way I'd take the promise of an apartment in 2 years time, or a parking lot somewhere. The apartment might never be built, or it will be so shoddy that even by Chinese standards no one will want it in the future.

CatsMeowPaw
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When you owe a million bucks it's your problem, when you owe $300 billion it's everybody's problem.

duanejackson
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When you need to borrow money from over 250 different institutions...

mike
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Patrick been following you since 5, 000 subscribers! Great Coverage and you deserve the following your attributing due to your objective and well thought out analysis. Thanks for being so informative and educational. Regards from Australia.

lordjord
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Hi Patrick,
im 25, im sorta tryna get my finances together now and you're actually a great help, so thankyou.

henry
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I would just like to say, you do a most excellent video. I enjoy each and every one.

toddcott
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I rarely comment on Youtube videos but just know that your channel is amazing. The most underrated channel by a light year

TheEddyFireBall