US Stocks Plummet as “China’s Lehman” Evergrande Reaches Brink of Collapse
Two weeks ago The Gateway Pundit warned that Evergrande is preparing for bankruptcy.
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The problem is Evergrande is five times the size of Lehman Brothers, made famous in the 2008 crash in the US.
On September 7, Zerohedge shared:
With algos busy chasing upward momentum in futures and global stocks, the biggest – if largely ignored story – remain the ongoing collapse of “China’s Lehman“, the $300+ billion China Evergrande, where following our earlier reports (see below) that a bank run emerged among creditors of the biggest and most indebted Chinese developer as its bonds were no longer eligible collateral in the repo market after a ratings downgrade, on Monday the rout went from bad to catastrophic as various Evergrande bonds crashed amid a liquidation frenzy, prompting China’s stock exchanges to halt trade.
The Shanghai Stock Exchange said in a statement that it had temporarily suspended trading in China Evergrande Group’s 6.98% July 2022 corporate bond following “abnormal fluctuations.” The exchange had also suspended trading in the bond on Friday. Tether commercial paper could be Chinese and it is one of the largest commercial paper traders in existance.
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On Monday the US stock market plunged nearly 700 points as Evergrande fears mounted.
Shares in ailing Chinese developer Evergrande plummeted on Monday (September 20).
The stock closed down by around 10%, hitting 11-year lows.
Investors are getting increasingly jittery amid mounting fears of a messy collapse.
Evergrande is weighed down by $305 billion in liabilities.
Executives have been scrambling to pay its many lenders, suppliers and investors, some of whom have descended on company headquarters to demand their money back.
Reuters sources say one of its main lenders has made provisions for losses on loans to the firm.
Some creditors are said to be giving it more time to pay.
On Sunday (September 19) the firm said it was repaying investors in its wealth management products with real estate.