Centaline Owed 1B+ HKD by Chinese Developers...

[shri]

It's pretty amazing the CCP themselves in the end decided to pop it. Pretty ballsy move I have to say, I think China will come out a much better economy on the other side of this, it might take a long time to come out of this tunnel though..

Are you certain they had a choice or intention?

[freeier]

Are you certain they had a choice or intention?

they can choose not to pop it by ploughing money into the system.. just bringing the debt up to government balance sheet. But that would just continue to encourage excessive speculation (that property will never fall in price) and never get out in full...

[RobRoy]

Are you certain they had a choice or intention?

Yes, they defined a red line on leverage ratio, where banks were not allowed to lend to companies that went past the red line. There was a grace period to get within the red line. Many companies ignored it but Evergrand was so way past the redline that they just went full retard and just leveraged further. Suddenly the plug was pulled (meaning red line was enforced) and down came the card house.

https://en.wikipedia.org/wiki/Three_red_lines

[RobRoy]

"One year later, Evergrande and Greenland were the only companies of the original dozen that had still crossed at least one of the red lines, Evans-Pritchard said in a Sept. 22 report. As of the end of June, he said Greenland had crossed one, while Evergrande had breached all three red lines.In contrast, “among the top 30 [developers], less than a third exceed any of the limits, compared with over two thirds a year ago,” he said. “Even firms that are not officially subject to the rules have generally complied.”"

Full retard in graph format

[GentleGeorge]

Couldn't they pay agent commission fees in unsold property units?

We know how much the agents love them because they have been telling us for years how great partial seaviews and 2.5 bedroom flats are