The Evergrande Crisis: Odd Origins… Dire Consequences?
Evergrande is one of the largest real estate companies in China. The last time we were in Beijing, investors were gobbling up high-rise apartments as a store of value. In some cases, the locks on the apartments were never breached. Like a car being driven off the lot, the apartments were depreciating in value as soon a human entered them. Evergrande took full advantage of the property boom, using debt to build its business as quickly as possible. Today Evergrande has $300 billion in liabilities — debt to banks and investors — on its books … but doesn’t have enough cash on hand to pay. The company could default as early as tomorrow.