5 ms·

What will the creditors even get? Unfinished projects? That seems like more of a burden than anything. Zoinks!

seanmcdirmid 3y ago
It’s worse than that. They have unfinished projects with units that have already been bought on mortgage. You have people making monthly payments for unfinished apartments (and I don’t mean just unrenovated, which is expected). That guy who was banned from trading in Hong Kong in 2016 for shorting the stock in 2012 must feel vindicated, at least.
- voisin 3y ago
  Jim Chanos?
  - seanmcdirmid 3y ago
    No, Andrew Left. See https://en.wikipedia.org/wiki/Andrew_Left#:~:text=In%202016%2C%20Left%20was%20banned,so%20inducing%20transactions%20under%20the https://en.wikipedia.org/wiki/Andrew_Left#:~:text=In%202016%... and https://markets.businessinsider.com/news/stocks/andrew-left-evergrande-warning-looming-debt-insolvency-citron-research-2021-9 https://markets.businessinsider.com/news/stocks/andrew-left-... Basically, the Hong Kong stock exchange is increasingly a scam as well.
    - mcphage 3y ago
      > “The finest line of poetry ever uttered in the history of this whole damn country was said by Canada Bill Jones in 1853, in Baton Rouge, while he was being robbed blind in a crooked game of faro. George Devol, who was, like Canada Bill, not a man who was averse to fleecing the odd sucker, drew Bill aside and asked him if he couldn't see that the game was crooked. And Canada Bill sighed, and shrugged his shoulders, and said, 'I know. But it's the only game in town.' And he went back to the game.” — Neil Gaiman
- ratg13 3y ago
  You neglect to mention that they are unfinished on purpose. In reality these "homes" are nothing more than a concrete box for legal/tax reasons. These are second or third "homes" for people that were purchased as a poor investment. The investors should eat the losses.
  - seanmcdirmid 3y ago
    Many of them aren't second homes. The ones in the ghost cities sure, but Evergrande has (had?) more legit projects that were designed as actual housing. In any case, given that the mainland stock market is pretty much known as a sham, real estate has been the only investment option for much of the middle class. Investors "eating" their losses basically means huge widespread social upheaval in China. Imagine everyone being equivalent to their 401k going belly up, that wouldn't be pretty.
    - greenhexagon 3y ago
      There is much about China that I don't understand, but I'm curious about the ownership in the "ghost cities". Given the ability of the CCP to significantly control major industries and movement of people, is it not possible that someone might buy an apartment in a "ghost city" while living in a rural area or renting in another city, expecting that people and jobs would flow to the city once it was completed? Basically I don't really understand all the details, nuance and different corporate and governmental players involved in the "ghost city" phenomenon, but I'd almost expect that the government could make a "ghost city" into a "real city" in no time, by shutting down factories in one city and opening them there, or by changing internal migration restrictions.
      - s1artibartfast 3y ago
        That is certainly the less cynical take. Few real people buy homes knowing with certainty they would remain empty. People speculated on new development, future growth, and induced demand. For some reason, people online like to make them martyrs or idiots. lots of schadenfreude. The reality is a lot more mundane. They were just a risky investment bubble that popped.

It’s worse than that. They have unfinished projects with units that have already been bought on mortgage. You have people making monthly payments for unfinished apartments (and I don’t mean just unrenovated, which is expected). That guy who was banned from trading in Hong Kong in 2016 for shorting the stock in 2012 must feel vindicated, at least.

voisin 3y ago
Jim Chanos?
- seanmcdirmid 3y ago
  No, Andrew Left. See https://en.wikipedia.org/wiki/Andrew_Left#:~:text=In%202016%2C%20Left%20was%20banned,so%20inducing%20transactions%20under%20the https://en.wikipedia.org/wiki/Andrew_Left#:~:text=In%202016%... and https://markets.businessinsider.com/news/stocks/andrew-left-evergrande-warning-looming-debt-insolvency-citron-research-2021-9 https://markets.businessinsider.com/news/stocks/andrew-left-... Basically, the Hong Kong stock exchange is increasingly a scam as well.
  - mcphage 3y ago
    > “The finest line of poetry ever uttered in the history of this whole damn country was said by Canada Bill Jones in 1853, in Baton Rouge, while he was being robbed blind in a crooked game of faro. George Devol, who was, like Canada Bill, not a man who was averse to fleecing the odd sucker, drew Bill aside and asked him if he couldn't see that the game was crooked. And Canada Bill sighed, and shrugged his shoulders, and said, 'I know. But it's the only game in town.' And he went back to the game.” — Neil Gaiman
ratg13 3y ago
You neglect to mention that they are unfinished on purpose. In reality these "homes" are nothing more than a concrete box for legal/tax reasons. These are second or third "homes" for people that were purchased as a poor investment. The investors should eat the losses.
- seanmcdirmid 3y ago
  Many of them aren't second homes. The ones in the ghost cities sure, but Evergrande has (had?) more legit projects that were designed as actual housing. In any case, given that the mainland stock market is pretty much known as a sham, real estate has been the only investment option for much of the middle class. Investors "eating" their losses basically means huge widespread social upheaval in China. Imagine everyone being equivalent to their 401k going belly up, that wouldn't be pretty.
  - greenhexagon 3y ago
    There is much about China that I don't understand, but I'm curious about the ownership in the "ghost cities". Given the ability of the CCP to significantly control major industries and movement of people, is it not possible that someone might buy an apartment in a "ghost city" while living in a rural area or renting in another city, expecting that people and jobs would flow to the city once it was completed? Basically I don't really understand all the details, nuance and different corporate and governmental players involved in the "ghost city" phenomenon, but I'd almost expect that the government could make a "ghost city" into a "real city" in no time, by shutting down factories in one city and opening them there, or by changing internal migration restrictions.
    - s1artibartfast 3y ago
      That is certainly the less cynical take. Few real people buy homes knowing with certainty they would remain empty. People speculated on new development, future growth, and induced demand. For some reason, people online like to make them martyrs or idiots. lots of schadenfreude. The reality is a lot more mundane. They were just a risky investment bubble that popped.