The Daily Brief The greatest corporate failure in history
Aug 28, 2025
Dive into the dramatic collapse of Evergrande and its ripple effects on China's economy and citizens facing financial turmoil. Explore the rise of Contract Development and Manufacturing Organizations in India, set to revolutionize the pharmaceutical sector. The podcast highlights how evolving opportunities in global biotech could shift power dynamics away from China, while exciting developments in India's economy, such as Tata Motors' restructuring, signal a promising future. It's a captivating journey through corporate upheavals and emerging markets!
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Perpetual Motion Real Estate Example
- Evergrande built a perpetual motion machine by pre-selling apartments years before construction and using that cash to start new projects.
- This cycle depended on constant new sales and collapsed when cash inflows slowed.
Three Highs, One Low Business Model
- The company ran on three highs and one low: high leverage, high turnover, high debt, and low costs.
- That structure required shadow banking and off-balance-sheet vehicles to sustain itself.
Using IOUs And Forced Investments
- Evergrande paid contractors with IOUs and sold wealth-management products to employees, turning suppliers and staff into lenders.
- These practices expanded its hidden liabilities to billions and forced mandatory employee purchases.