Ones and Tooze Is Evergrande the New Lehman Brothers?
Sep 24, 2021
The discussion revolves around Evergrande's staggering $300 billion debt and its potential to upend global financial markets, drawing parallels to the 2008 crisis. They explore the intricacies of China's state-backed financial system and the impact of U.S. monetary policy on countries like Brazil. Additionally, the podcast highlights the evolution of high-speed rail, contrasting France and Japan's advancements with the U.S.'s reliance on Amtrak. It dives into France's innovations in technology and the broader implications of global infrastructure developments.
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Evergrande's Lehman-like Crisis
- Evergrande's potential default, with its massive $300 billion debt, is causing global financial turmoil.
- It resembles the 2008 Lehman Brothers crisis, raising fears of widespread economic contagion.
Evergrande's Real Estate Empire
- Evergrande, a real estate company, accumulated $300 billion in debt through legitimate building projects across 280 Chinese cities.
- They expanded into diverse sectors, including electric vehicles, entertainment, and food, impacting communities across China.
China's Real Estate Boom
- Investors bet on China's rapid wealth growth due to urbanization and private land ownership.
- Limited investment options and government dependence on real estate fueled Evergrande's excessive borrowing.