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The world's most indebted developer to crash?


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The highly troubled real estate giant with over $300 billion in liabilities is at risk of becoming China's biggest ever default. There are a few other big Chinese developers in the same boat. IT IS A QUESTION OF WHEN? IN A FEW WEEKS OR SEVERAL SEVERAL WEEKS?

China is in a huge debt bubble, as the West, encouraged by FED POLICIES, particularly other central banks have been encouraged and pushed to follow the model as if that would "solve" the world's economic problems.

We have been here before many times over the many decades. It seems no lessons of the past were permanently put in place to place or the true WHYs not established and adhered to.

Should it go wrong then those in charge are responsible and should have to pay for the financial mess to follow, including the banks themselves.

 

 

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4 minutes ago, skyreach said:

The highly troubled real estate giant with over $300 billion in liabilities is at risk of becoming China's biggest ever default. There are a few other big Chinese developers in the same boat. IT IS A QUESTION OF WHEN? IN A FEW WEEKS OR SEVERAL SEVERAL WEEKS?

China is in a huge debt bubble, as the West, encouraged by FED POLICIES, particularly other central banks have been encouraged and pushed to follow the model as if that would "solve" the world's economic problems.

We have been here before many times over the many decades. It seems no lessons of the past were permanently put in place to place or the true WHYs not established and adhered to.

Should it go wrong then those in charge are responsible and should have to pay for the financial mess to follow, including the banks themselves.

 

 

Hi @skyreach

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For real estate developers in China, but most likely just about anywhere else in the world, debt is a double-edged sword. Debt can be a valuable asset for rapid growth if not used excessively, while over leveraged debt can pose an irreversible threat to long-term financial health. It is a fine line to walk to find the balance between fast growth and financial sustainability.

 

Will the crisis crush the economy?

The crisis of uncontrolled debt in a sector that contributes to more than 25% of the Chinese GDP made us wonder if it could actually crush the economy. It’s undeniable that China’s economic growth for the past decades is finally slowing down, but for the Chinese real estate sector, this might well be just another road bump. However, I believe that a real crash is unlikely, as the newly launched regulations are set to deleverage and reduce debt as well as limit both excessive price rises and prices dropping too low.

 

For the full article: Forbes

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FORBES COUNCILS ANALYSIS COMMENT

DEBT IS NOT A DOUBLE-EDGED SWORD AS IS FIXATED IN THE MINDS OF MANY WHO HAVE BEEN INTROVERTED IN THIS GAME.

DEBT MANAGEMENT IS NOT DEPENDABLE ON INTEREST RATES OR INFLATION OR ARTIFICIAL PUSH FOR GROWTH AT ANY COST. THOSE ARE FACTORS THAT PLAY A PART AS A SECONDARY SET OF ACTIONS.

LEVERAGED DEBT HAS ALWAYS LOOKING BACK AT HISTORY EVERY TIME BEEN A TIME BOMB WAITING TO GO OFF, OR IS SOMETHING THAT BECOMES TRIPPED.

GENUINE ECONOMIC GROWTH DEPENDS ON ALL ORGANISATIONS, COMPANIES, BANKS, INVESTMENT ENTITIES, GOVERNMENTS, ETC... MANAGING THEIR ORGANIC GROWTH BY FULFILLING THE ACTUAL NEEDS AND WANTS OF GOODS AND SERVICES. DEBT MANAGEMENT AND CASH FLOW ARE OF CRITICAL APPLICATION IN THE GOOD HEALTHY RUNNING OF ANY ORGANISATION.

IF A CRISIS OF UNCHECKED DEBTS HAS BEEN DELIBERATELY ALLOWED TO CONTINUE THEN THAT LEADS TO A ROAD OF RUINS.

CHINA IS THE LATEST EXAMPLE TO JOIN THIS CLUB OF EXTREMELY EXCESSIVE DEBTS BUBBLE AS THE WEST AS DONE TIME AFTER TIME AFTER TIME. REALLY, NO LESSONS HAVE BE LEARNT (OR FORGOTTEN).

IT IS EASY TO BE WISE AFTER THE FACT. SO WHO MISSED THE CORRECT EVALUATION OF THE ACTUAL SCENE IN THE PRESENT AND HENCE THE CORRECT SOLUTIONS?

 

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