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From Bloomberg: > Bondholders of $19.2 billion in Evergrande dollar notes face deep haircuts as the company overhauls its mammoth balance sheet without a gover

From Bloomberg: > Bondholders of $19.2 billion in Evergrande dollar notes face deep haircuts as the company overhauls its mammoth balance sheet without a government bailout -- a process that promises to be long, contentious and potentially risky for Asia’s largest economy. https://www.bloomberg.com/news/articles/2021-12-09/evergrande-defaults-for-first-time-as-china-debt-strains-spread https://www.bloomberg.com/news/articles/2021-12-09/evergrand... It might seem odd that a Chinese company would have taken out dollar loans, but the practice is common around the world. One reason is that the borrower can get lower interest rates because they assume the exchange rate risk themselves. If that bet goes sour, though, the borrower faces higher costs to service the debt. Of course the thing about dollar bonds is that even if the national government were to intervene, those dollars can't be printed by Beijing. The only way to service a dollar debt is to raise dollars. One path to doing that is to sell dollar-denominated assets. US Stocks and bonds in other words. So the pressures in China can spill over into the US economy through forced asset sales of dollar-denominated assets. This is another angle to the contagion idea. Organizations around the world have taken big short position on the US dollar. As those loans come due, dollar assets are sold. Which drives the dollar higher. Which makes the dollar loans even more unsustainable. And so on. It has been called the global dollar short squeeze: https://www.lynalden.com/global-dollar-short-squeeze/ https://www.lynalden.com/global-dollar-short-squeeze/ And if you're really adventurous, there's something called the "dollar milkshake theory" which predicts the uncontrollable rise of the dollar as (maybe counterintuitively) a wrecking ball for the world economy: https://www.youtube.com/watch?v=2qTOWuL7Zco https://www.youtube.com/watch?v=2qTOWuL7Zco

peter_retief 5y ago
The world economy is in trouble, the US has leadership issues and China has declining growth. Inflation will soon strip away any gains in growth. Hold onto your seat.
- toss1 5y ago
  Yes, except this type of event is massively DEflationary. Creation of more debt is creation of more money, increasing supply, and is inflationary. Conversely, destruction of debt destroys money, and is deflationary, in this case, deflationary to the dollar. Also, selling of dollar-denominated assets also decreases the dollar-value of those assets and so increases the value of the dollar. But it is inflationary for the Chinese currency. This is why with the Fed's QE programs since the 2008 crash everyon ehas been yelling "Inflation!!" for over a decade, yet there was none-negative until this year, and even that is arguably transient. So much money was destroyed in that crisis that they have been ever since then trying to fill in the (deflationary) hole. To the extent that that debt is denominated in dollars and is about to be destroyed, it will be dollar-deflationary, not inflationary.
  - mywittyname 5y ago
    To add to this, inflation is manageable. The USA isn't experiencing anything close to worrisome levels of inflation, it's more like normal levels of inflation after a long period of below normal levels. Deflation, even in small amounts, can be devastating. It's a contagion that can cause a deathspiral, that if left unchecked. When businesses and people lose income, they can't keep up with debt payments, causing their assets to be liquidated, which causes the assets of others to suffer further depreciation, causing more losses and bankruptcies.
    - ford_o 5y ago
      I have seen this opinion presented multiple times without any supporting facts. When did deflation in history lead to collapse of society? Japan is in deflation for a long time and the life goes on. On the other hand, the inflation in Germany lead to WW2, inflation was also at least partly responsible for the hunderd year war in Europe and the fall of the Roman Empire.
      - mensetmanusman 5y ago
        Great depression when relying on gold. E.g. when the value of your money will always be worth more the longer you wait, everyone tends to wait at the same time and everyone loses.
      - toss1 5y ago
        As another poster pointed out the Great Depression is a good example of deflation, and it is generally recognized that this was only cured by the massive expenditures of WWII. Also Inflation vs Hyper-Inflationyper is a key distinction. Ordinary inflation is relatively harmless, and the NET returns available tend to equalize at the actual growth rate of the economy. E.g., if inflation is 5%/yr the stock market is likely growing at 7.5%/year, yielding the same returns as if it were growing at 2.5%/year in a 0-inflation environment. Hyper-Inflation is the killer - when inflation gets out of control, people lose confidence in the currency, which leads to the vicious cycle of needing to print more, which leads to lower confidence, etc.. Obviously, this is to be avoided nearly as strongly as deflation. It's why Volker raised the Fed Funds Rate to up to 18%, to killed the '70s inflation that threatened to run away. But even in the following decade it was typically 3-4%, as low as 1.1% and as high as 6.1%. Yet we're now seeing 3-4%, likely transient, and people are squawking like it's the end of the world.
duxup 5y ago
> because they assume the exchange rate risk themselves. If that bet goes sour, though, the borrower faces higher costs to service the debt. Man that seems like “doubling down” (I’m thinking of the gambling term) on a business bet…
- KMag 5y ago
  I suspect and hope many of these borrowers issuing dollar-denominated debt are also entering into foreign exchange futures contracts. The reason they'd want to expose themselves to US dollar FX risk and then hedge that risk is to make their debt appeal to a wider range of international buyers. This post shouldn't be construed as financial advice in any form.
  - duxup 5y ago
    Valid point, they could be taking steps to offset that risk too. Hopefully.
echelon 5y ago
How can one participate in making profits during a "dollar short squeeze"? GME was easy. Hold the stock, sell it to the shorts. How do you do that with US dollars? Secondly, as crazy as this sounds, would it be one reason for the Fed to preemptively drive inflation? (I suppose a low constant multiple in devaluation wouldn't blunt a short squeeze peak entirely, but might make it less sharp?)
- hourislate 5y ago
  >How can one participate in making profits during a "dollar short squeeze"? If you believe OP, borrow as much foreign currency as you can and exchange it for USD. Back in 2007-2008, many Canadians emptied out their savings to buy USD at incredibly favorable exchange rates. Within a year or two they made over 30% as the CAD fell and the USD recovered.
  - webinvest 5y ago
    Yes, you can find a new Afghan Afghani, Indian Rupee, Turkish Lyra, or Chinese Yuan to borrow and buy USD with.
  - boringg 5y ago
    Thats an interesting narrative about the CAD/USD exchange rate. Conventional wisdom would have said that it was that the high prices of oil raised the canadian dollar compared to the us dollar. If at the time you thought the price of oil would come back down then it would be an opportune time to sell canadian dollars and hold USD. In your comment it seems that you are suggesting there was some kind of squeeze from retail holders that caused the price rise in CAD to USD... I find that tough to believe but have not considered it.
    - hourislate 5y ago
      It was the 2007/2008 Financial meltdown where US Real Estate and Leman brothers collapse. Oil went crazy (Tar Sands) and Canada was able to weather virtually unscathed (due to strict mortgage and banking rules. The CAD went from trading at like .81 USD to 1.18 USD withing a year (if memory serves me correctly).
Denvercoder9 5y ago
> One path to doing that is to sell dollar-denominated assets. US Stocks and bonds in other words. A big part of the world economy is literally or effectively dollar-denominated, so a sale of dollar-denominated assets does not imply a sale of US stocks and bonds. You can sell just about anything for dollars.
- onlyrealcuzzo 5y ago
  Including almost all currencies...
  - mywittyname 5y ago
    This still would drive up the value of USD, it just allows for the depreciation associated with the sale currency to be spread out to a degree. But the issue with this is that there are only a few currencies backed by economies large enough, relative to the US economy, to be able to trade for sufficient quantities of USD without really impacting the exchange rate. If the impact is large enough, the only good solution is for the fed to agree to a currency swap.
khuey 5y ago
Worth noting that this "dollar short squeeze" is the exact opposite of the most common conspiracy theory about the dollar: that the Fed is printing them like its going out of style (through quantitative easing and whatnot) and destroying their value.
- willcipriano 5y ago
  Conspiracy theory?[0] [0]https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
  - webinvest 5y ago
    18880 to 21200 this year is a 12.78% increase. Last year 2020, it said M2 grew 25%. It’s notable that the calculation for M2 changed. “Before May 2020, M2 consists of M1 plus (1) savings deposits (including money market deposit accounts); (2) small-denomination time deposits (time deposits in amounts of less than $100,000)” “Beginning May 2020, M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000)” Does that mean savings accounts and money market accounts are no longer included in M2?
    - Majromax 5y ago
      From https://www.federalreserve.gov/feeds/h6.html https://www.federalreserve.gov/feeds/h6.html >> Consequently, [February 23 2021]'s H.6 statistical release combines release items "Savings deposits" and "Other checkable deposits" retroactively back to May 2020 and includes the resulting sum, reported as "Other liquid deposits," in the M1 monetary aggregate. This action increases the M1 monetary aggregate significantly while leaving the M2 monetary aggregate unchanged.
      - webinvest 5y ago
        Okay so they were moved to M1 —- which is included in M2 so M2 aggregate is unchanged.
  - 5y ago
JackFr 5y ago
> The only way to service a dollar debt is to raise dollars. One path to doing that is to sell dollar-denominated assets. US Stocks and bonds in other words. So the pressures in China can spill over into the US economy through forced asset sales of dollar-denominated assets. During height of the 2008 financial crisis the Federal Resevere opened an currency swap facility with the Swiss National Bank and the ECB ultimately capped at $620 billion, with the express purpose of allowing the other central banks to bail out banks domiciled in their jurisdictions. So with the cooperation of the Fed, it is possible for them to print dollars.
- khuey 5y ago
  There's zero chance this sort of emergency currency swap would happen with China though. Politically it would be the kiss of death to anyone involved and financially the Fed isn't going to pile up a bunch of largely useless yuan.
- dageshi 5y ago
  yeah, those currencies are freely tradable though, CNY is not, it's pegged. No political way Fed will do that.
riffraff 5y ago
It's worth considering the relative sizes tho: the Chines government alone holds 11 trillion dollars in treasury bonds[0], the total US debt is about 28T. Evergrande's USD-denominated debt is 20 billion, even if they wanted to cash it all out rather than just refinance it I doubt it would be such a huge wave. Panicing investors fleeing to the USD safe haven seems more likely to cause trouble. [0] https://www.thebalance.com/how-much-u-s-debt-does-china-own-417016 https://www.thebalance.com/how-much-u-s-debt-does-china-own-... [1] https://www.ft.com/content/7ac2d661-5a63-4768-91a1-182f02b2afa5 https://www.ft.com/content/7ac2d661-5a63-4768-91a1-182f02b2a...
- yakz 5y ago
  The article says $1.1 trillion, not $11 trillion.
  - TechBro8615 5y ago
    The proximity of that number to the cost of the recent infrastructure package has me thinking. Normally we consider printing money to be deflationary to the US economy. But in a global situation like this, if the US prints a dollar for every one that China owns, does that devalue China’s dollar holdings? How does that impact their leverage in negotiating with the US for payback of its (dollar-denominated) debt?
    - seanmcdirmid 5y ago
      "Devalue" compared to what? If both China and the USA are printing money, then they could come out about even, or one could come out ahead of the other. Right now, the USA is printing more money than China, so the exchange rate is 6.38 RMB/USD, which is pretty strong by historic standards.
    - pertymcpert 5y ago
      That's called exporting inflation, and it's one of the huge advantages of the dollar hegemony. Also, China can't negotiate the treasury bonds because those bonds are fixed income securities. They can't suddenly demand early payment.
lumost 5y ago
19.2 billion is not that much money in the global banking system. There is no reason why bondholders should be guaranteed a return. Bankruptcy is an option. The broader risk is an unwinding of Chinese holdings by foreign entities who suddenly realize that the Chinese government will have them foot the bill for bets gone bad, or simply bets that the Chinese government doesn't like. China has capital controls to manage these outflows. Which all leads to the scenario where foreign investors in China's economy are probably going to get taken for a ride at some point. Arguably some companies like ARM are already in this situation but it's in everyone's interest to pretend they are not.
- webdoodle 5y ago
  > Bankruptcy is an option. Yeah, I thought the same thing in 2008, then the haunting words "too big to fail" were used by both Obama and McCain, so it didn't care who won the presidential election, the banksters would still get a bail out. Fast forward to today, and it still doesn't matter whether a Dem or Rep sits in the oval office, the banksters will always have safety net.
  - PaulDavisThe1st 5y ago
    The problem is of course that we're all so caught up in the bankster's nets that their failure is a problem for all of us. When Obama and McCain said "too big too fail" they weren't so much saying "these guys are my friends and I don't want them to fail" (though this may well have been true). They were saying "the chaos that will ensue if these institutions fail will be too deep and wide for us to deal with". That was, of course, the point of trying to do something to make them NOT too big too fail, an effort that appears to have really gone nowhere.
    - webdoodle 5y ago
      > is a problem for all of us. Not for those of us that don't invest our money in banks/stock markets, and don't take out loans. Private businesses meeting the above criteria would have boomed under those conditions, as there competitors were wiped out. The world is addicted to banks, and it really needs to treat the source, not the symptoms.
dageshi 5y ago
This is true, but I don't know to what extent Chinese businesses can purchase USD assets? My assumption is it's probably harder (you need Chinese government permission) to do so? Certainly chinese retail investors can't do it at the moment.
hintymad 5y ago
Goldman Sachs also estimated that Evergrande had about $300B of debt-to-equity that will be due in less than two years or so. Given the current market condition, I really don't see how Evergrande can ever recover.

peter_retief 5y ago

The world economy is in trouble, the US has leadership issues and China has declining growth. Inflation will soon strip away any gains in growth. Hold onto your seat.

toss1 5y ago
Yes, except this type of event is massively DEflationary. Creation of more debt is creation of more money, increasing supply, and is inflationary. Conversely, destruction of debt destroys money, and is deflationary, in this case, deflationary to the dollar. Also, selling of dollar-denominated assets also decreases the dollar-value of those assets and so increases the value of the dollar. But it is inflationary for the Chinese currency. This is why with the Fed's QE programs since the 2008 crash everyon ehas been yelling "Inflation!!" for over a decade, yet there was none-negative until this year, and even that is arguably transient. So much money was destroyed in that crisis that they have been ever since then trying to fill in the (deflationary) hole. To the extent that that debt is denominated in dollars and is about to be destroyed, it will be dollar-deflationary, not inflationary.
- mywittyname 5y ago
  To add to this, inflation is manageable. The USA isn't experiencing anything close to worrisome levels of inflation, it's more like normal levels of inflation after a long period of below normal levels. Deflation, even in small amounts, can be devastating. It's a contagion that can cause a deathspiral, that if left unchecked. When businesses and people lose income, they can't keep up with debt payments, causing their assets to be liquidated, which causes the assets of others to suffer further depreciation, causing more losses and bankruptcies.
  - ford_o 5y ago
    I have seen this opinion presented multiple times without any supporting facts. When did deflation in history lead to collapse of society? Japan is in deflation for a long time and the life goes on. On the other hand, the inflation in Germany lead to WW2, inflation was also at least partly responsible for the hunderd year war in Europe and the fall of the Roman Empire.
    - mensetmanusman 5y ago
      Great depression when relying on gold. E.g. when the value of your money will always be worth more the longer you wait, everyone tends to wait at the same time and everyone loses.
    - toss1 5y ago
      As another poster pointed out the Great Depression is a good example of deflation, and it is generally recognized that this was only cured by the massive expenditures of WWII. Also Inflation vs Hyper-Inflationyper is a key distinction. Ordinary inflation is relatively harmless, and the NET returns available tend to equalize at the actual growth rate of the economy. E.g., if inflation is 5%/yr the stock market is likely growing at 7.5%/year, yielding the same returns as if it were growing at 2.5%/year in a 0-inflation environment. Hyper-Inflation is the killer - when inflation gets out of control, people lose confidence in the currency, which leads to the vicious cycle of needing to print more, which leads to lower confidence, etc.. Obviously, this is to be avoided nearly as strongly as deflation. It's why Volker raised the Fed Funds Rate to up to 18%, to killed the '70s inflation that threatened to run away. But even in the following decade it was typically 3-4%, as low as 1.1% and as high as 6.1%. Yet we're now seeing 3-4%, likely transient, and people are squawking like it's the end of the world.

duxup 5y ago

> because they assume the exchange rate risk themselves. If that bet goes sour, though, the borrower faces higher costs to service the debt. Man that seems like “doubling down” (I’m thinking of the gambling term) on a business bet…

KMag 5y ago
I suspect and hope many of these borrowers issuing dollar-denominated debt are also entering into foreign exchange futures contracts. The reason they'd want to expose themselves to US dollar FX risk and then hedge that risk is to make their debt appeal to a wider range of international buyers. This post shouldn't be construed as financial advice in any form.
- duxup 5y ago
  Valid point, they could be taking steps to offset that risk too. Hopefully.

echelon 5y ago

How can one participate in making profits during a "dollar short squeeze"? GME was easy. Hold the stock, sell it to the shorts. How do you do that with US dollars? Secondly, as crazy as this sounds, would it be one reason for the Fed to preemptively drive inflation? (I suppose a low constant multiple in devaluation wouldn't blunt a short squeeze peak entirely, but might make it less sharp?)

hourislate 5y ago
>How can one participate in making profits during a "dollar short squeeze"? If you believe OP, borrow as much foreign currency as you can and exchange it for USD. Back in 2007-2008, many Canadians emptied out their savings to buy USD at incredibly favorable exchange rates. Within a year or two they made over 30% as the CAD fell and the USD recovered.
- webinvest 5y ago
  Yes, you can find a new Afghan Afghani, Indian Rupee, Turkish Lyra, or Chinese Yuan to borrow and buy USD with.
- boringg 5y ago
  Thats an interesting narrative about the CAD/USD exchange rate. Conventional wisdom would have said that it was that the high prices of oil raised the canadian dollar compared to the us dollar. If at the time you thought the price of oil would come back down then it would be an opportune time to sell canadian dollars and hold USD. In your comment it seems that you are suggesting there was some kind of squeeze from retail holders that caused the price rise in CAD to USD... I find that tough to believe but have not considered it.
  - hourislate 5y ago
    It was the 2007/2008 Financial meltdown where US Real Estate and Leman brothers collapse. Oil went crazy (Tar Sands) and Canada was able to weather virtually unscathed (due to strict mortgage and banking rules. The CAD went from trading at like .81 USD to 1.18 USD withing a year (if memory serves me correctly).

Denvercoder9 5y ago

> One path to doing that is to sell dollar-denominated assets. US Stocks and bonds in other words. A big part of the world economy is literally or effectively dollar-denominated, so a sale of dollar-denominated assets does not imply a sale of US stocks and bonds. You can sell just about anything for dollars.

onlyrealcuzzo 5y ago
Including almost all currencies...
- mywittyname 5y ago
  This still would drive up the value of USD, it just allows for the depreciation associated with the sale currency to be spread out to a degree. But the issue with this is that there are only a few currencies backed by economies large enough, relative to the US economy, to be able to trade for sufficient quantities of USD without really impacting the exchange rate. If the impact is large enough, the only good solution is for the fed to agree to a currency swap.

khuey 5y ago

Worth noting that this "dollar short squeeze" is the exact opposite of the most common conspiracy theory about the dollar: that the Fed is printing them like its going out of style (through quantitative easing and whatnot) and destroying their value.

willcipriano 5y ago
Conspiracy theory?[0] [0]https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
- webinvest 5y ago
  18880 to 21200 this year is a 12.78% increase. Last year 2020, it said M2 grew 25%. It’s notable that the calculation for M2 changed. “Before May 2020, M2 consists of M1 plus (1) savings deposits (including money market deposit accounts); (2) small-denomination time deposits (time deposits in amounts of less than $100,000)” “Beginning May 2020, M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000)” Does that mean savings accounts and money market accounts are no longer included in M2?
  - Majromax 5y ago
    From https://www.federalreserve.gov/feeds/h6.html https://www.federalreserve.gov/feeds/h6.html >> Consequently, [February 23 2021]'s H.6 statistical release combines release items "Savings deposits" and "Other checkable deposits" retroactively back to May 2020 and includes the resulting sum, reported as "Other liquid deposits," in the M1 monetary aggregate. This action increases the M1 monetary aggregate significantly while leaving the M2 monetary aggregate unchanged.
    - webinvest 5y ago
      Okay so they were moved to M1 —- which is included in M2 so M2 aggregate is unchanged.
- 5y ago

JackFr 5y ago

> The only way to service a dollar debt is to raise dollars. One path to doing that is to sell dollar-denominated assets. US Stocks and bonds in other words. So the pressures in China can spill over into the US economy through forced asset sales of dollar-denominated assets. During height of the 2008 financial crisis the Federal Resevere opened an currency swap facility with the Swiss National Bank and the ECB ultimately capped at $620 billion, with the express purpose of allowing the other central banks to bail out banks domiciled in their jurisdictions. So with the cooperation of the Fed, it is possible for them to print dollars.

khuey 5y ago
There's zero chance this sort of emergency currency swap would happen with China though. Politically it would be the kiss of death to anyone involved and financially the Fed isn't going to pile up a bunch of largely useless yuan.
dageshi 5y ago
yeah, those currencies are freely tradable though, CNY is not, it's pegged. No political way Fed will do that.

riffraff 5y ago

It's worth considering the relative sizes tho: the Chines government alone holds 11 trillion dollars in treasury bonds[0], the total US debt is about 28T. Evergrande's USD-denominated debt is 20 billion, even if they wanted to cash it all out rather than just refinance it I doubt it would be such a huge wave. Panicing investors fleeing to the USD safe haven seems more likely to cause trouble. [0] https://www.thebalance.com/how-much-u-s-debt-does-china-own-417016 https://www.thebalance.com/how-much-u-s-debt-does-china-own-... [1] https://www.ft.com/content/7ac2d661-5a63-4768-91a1-182f02b2afa5 https://www.ft.com/content/7ac2d661-5a63-4768-91a1-182f02b2a...

yakz 5y ago
The article says $1.1 trillion, not $11 trillion.
- TechBro8615 5y ago
  The proximity of that number to the cost of the recent infrastructure package has me thinking. Normally we consider printing money to be deflationary to the US economy. But in a global situation like this, if the US prints a dollar for every one that China owns, does that devalue China’s dollar holdings? How does that impact their leverage in negotiating with the US for payback of its (dollar-denominated) debt?
  - seanmcdirmid 5y ago
    "Devalue" compared to what? If both China and the USA are printing money, then they could come out about even, or one could come out ahead of the other. Right now, the USA is printing more money than China, so the exchange rate is 6.38 RMB/USD, which is pretty strong by historic standards.
  - pertymcpert 5y ago
    That's called exporting inflation, and it's one of the huge advantages of the dollar hegemony. Also, China can't negotiate the treasury bonds because those bonds are fixed income securities. They can't suddenly demand early payment.

lumost 5y ago

19.2 billion is not that much money in the global banking system. There is no reason why bondholders should be guaranteed a return. Bankruptcy is an option. The broader risk is an unwinding of Chinese holdings by foreign entities who suddenly realize that the Chinese government will have them foot the bill for bets gone bad, or simply bets that the Chinese government doesn't like. China has capital controls to manage these outflows. Which all leads to the scenario where foreign investors in China's economy are probably going to get taken for a ride at some point. Arguably some companies like ARM are already in this situation but it's in everyone's interest to pretend they are not.

webdoodle 5y ago
> Bankruptcy is an option. Yeah, I thought the same thing in 2008, then the haunting words "too big to fail" were used by both Obama and McCain, so it didn't care who won the presidential election, the banksters would still get a bail out. Fast forward to today, and it still doesn't matter whether a Dem or Rep sits in the oval office, the banksters will always have safety net.
- PaulDavisThe1st 5y ago
  The problem is of course that we're all so caught up in the bankster's nets that their failure is a problem for all of us. When Obama and McCain said "too big too fail" they weren't so much saying "these guys are my friends and I don't want them to fail" (though this may well have been true). They were saying "the chaos that will ensue if these institutions fail will be too deep and wide for us to deal with". That was, of course, the point of trying to do something to make them NOT too big too fail, an effort that appears to have really gone nowhere.
  - webdoodle 5y ago
    > is a problem for all of us. Not for those of us that don't invest our money in banks/stock markets, and don't take out loans. Private businesses meeting the above criteria would have boomed under those conditions, as there competitors were wiped out. The world is addicted to banks, and it really needs to treat the source, not the symptoms.

dageshi 5y ago

This is true, but I don't know to what extent Chinese businesses can purchase USD assets? My assumption is it's probably harder (you need Chinese government permission) to do so? Certainly chinese retail investors can't do it at the moment.

hintymad 5y ago

Goldman Sachs also estimated that Evergrande had about $300B of debt-to-equity that will be due in less than two years or so. Given the current market condition, I really don't see how Evergrande can ever recover.