Another day, another dismal development for "China's Lehman", with Bloomberg reporting that just hours after Fitch joined Moody's in a triple-notch downgrade of China's property development giant (from CCC+ to CC), coupled with a warning that "default appears probable", the dollar bonds of China Evergrande fell to fresh lows, after a report from financial intelligence firm REDD that the firm plans to suspend interest payments on loans from two banks due Sept. 21, and asked a lender to wait for instructions about an extension plan..
For those saying that there is a word for this, you are right: it's technical default, or "selective default" in the parlance of rating agencies; it occurs when a borrower fails to pay one or more of their obligations but continues to meet other payment obligations, and usually precedes a full-blown default and/or bankruptcy although in China the distinction tends to be a little blurry.
Following the news, Evergrande's dollar bond due 2025 fell 1.5 cents on the dollar to 24.2 cents with all other USD bonds sliding in sympathy...
... having already been hammered earlier after Fitch said that its 3-notch downgrade "reflects our view that a default of some kind appears probable."
Evergrande itself warned last week of default risks if its efforts to raise cash fall short. Last Friday, the company also said its contracted sales in August, including those to suppliers and contractors to offset payments, dropped 26% compared with a year ago.
The insolvent Evergrande has become one of the biggest financial worries in China, the epicenter of a potential default shockwave given its massive pile of $305 billion in liabilities to banks, shadow lenders, companies, investors, vendors and home buyers. Investor fears that a default is imminent have led to a crash in the firm’s bonds in recent weeks, which are now trading as if the company is already broke, and triggered fears about contagion risk in the broader credit market.
In the previous two days, several Evergrande bonds were suspended from trading following a liquidation scramble. The company's 6.98% bonds due July 2022 were suspended temporarily after falling more than 20% in Shenzhen, according to a statement from the city’s stock exchange that echoed a similar intervention on Friday. On Tuesday, Evergrande's 5.9% local bonds dude 2023 were also halted after a plunge.
Having been a largely isolated affair, fears about Evergrande's rapidly unfolding liquidity crisis finally spilled over and led to contagion at other Chinese property developers. As the FT reported, Fantasia Group, a third property company facing refinancing concerns, said in a statement to the Hong Kong stock exchange on Monday evening that it had made several purchases of its own bonds, one of which matures in December. Its bonds sank to 78 cents on the dollar. Fantasia said in the filing that the purchases of its own bonds would “reduce the company’s future financial expenses and lower its financial gearing level”.
In language reminiscent of Evergrande’s challenges, Moody’s late last week estimated that Guangzhou R&F did not have enough cash to cover its debt repayments in the next year and a half, meaning it would need to rely on “new financing or asset sales”.
In a separate filing late on Friday, it said the bonds had also been bought through companies wholly owned by Fantasia’s founder Zeng Jie, niece of Zeng Qinghong, a former vice-president of China.
Chinese property developers are also grappling with tighter credit conditions and weaker sales within China after Beijing introduced rules last year to constrain developers’ leverage, not to mention choppy trading on international markets, where they are some of Asia’s biggest high-yield borrowers.
“Overall, the funding conditions have tightened and the offshore bond market is also getting more volatile,” said Kaven Tsang, a senior vice-president at Moody’s. "That actually has some negative implications on the market as a whole,” he added. “The refinancing risk has increased."
One look at the yield on Chinese junk bonds - which has risen to levels not seen since the covid pandemic shut down the entire Chinese economy back in March 2020 ...
... shows just how serious China's property crunch has become, even as stocks in the US continue to flirt with all time highs without a care in the world.
Victor Davis Hanson’s Annotated Guide To American Middle East Madness
Victor Davis Hanson’s Annotated Guide To American Middle East Madness
Authored by Victor Davis Hanson via X (@VDHanson),
Take note that a…
Take note that a trapped Hamas in extremis will go to desperate lengths to survive, from trying to prompt lone-wolf killings in Western cities to drawing in Arab nations to share in their jihad to enlisting Western elites and expatriate Muslims both to deny Hamas is a murderous organization and simultaneously to cheer on its macabre killing.
In this regard, the anti-Jewish nature of Iran and Hamas (read its 1988 Covenant of the Islamic Resistance Movement) should have been obvious, but Westerners suffered from a pathological desire to be deluded.
But to aid Israel in overcoming the current genocidal agendas of its enemies, we should remember first how we in the past have unfortunately contributed to this nightmare.
What follows are some brief annotated quotes of American Middle East insanity [with my annotations in brackets].
Consider our late point man in Iran, and supposed Obama-era expert on Hamas and ISIS, Robert Malley (2008):
It is "a mistake to only think of them [Hamas] in terms of their terrorist violence dimension.”
[Was it a mistake to envision the Third Reich also in terms only of its “terrorist violence,” given that it also promoted a green agenda?]
Malley also included Hamas in his groups of terrorist organizations that "are social and political movements, probably the most rooted movements in their respective societies.” …
[I agree that Hamas is certainly the “most rooted” of the movements in Gaza and perhaps the West Bank as well. And I concur that it is not a mere aberration in Palestinian society but reflects its collective “rooted” values.]
“There is so much misinformation about them …
[Please elaborate: does your “so much information” include things like our ignorance of the fact that Hamas likes to rape Jewish women and desecrate the dead bodies of Jews?]
“I speak to them and my colleagues speak to them [Hamas], and now we may disagree with them, but they have their own rationality … none of them are crazies,”
[Can you please provide transcripts of those occasions when you and your colleagues (also then in the Obama administration?) spoke to Hamas? That was also quite big of you, Mr. Malley, to note that you “may” disagree with Hamas. Was it over which of their killing methods is the most effective? I also agree that Hamas certainly has its own “rationality”. Its recent murder of 1200 Jews—the vast majority civilians—during a religious holiday, which followed a year-long carefully-planned blueprint for mass death and counted on the near-criminal naivete of Western diplomats, might rival the “rational” genocidal agendas of, say, the SS. As for “crazies”—do you mean that Hamas does not crazily fantasize about extermination, but carefully and rationally carries it out? If so, I concur.]
"It has a charity organization, a social branch; it’s not something you can defeat militarily either, and people need to understand that."
[Everything you have stated could have equally applied to the murderous Nazi party: it too was a “political movement” (which did not preclude its use of systematic murder). It too had its own “rationality” (kill Jews and destroy elected governments). It too had “a social branch” and “even charities” (all the better to disguise its murderous agendas). And, yes, one can defeat Hamas “militarily,” as the Allies did Nazi ideology. And yes, “people need to understand that” it is quite possible to ensure that Hamas murders no more.]
John Kerry at Davos in 2016:
“I think that some of it [the millions released to Iran by the Obama administration] will end up in the hands of the IRGC [Islamic Revolutionary Guard Corps—the terrorism specialists of the Iranian armed forces] or other entities, some of which are labeled terrorists.”
[As for “Are labeled terrorists?”—Mr. Kerry, does your use of “labeled” mean that Iranian terrorists are terrorists in name only?]
“You know, to some degree, I’m not going to sit here and tell you that every component of that can be prevented.”
[“To some degree” ? If American money cannot be prevented from being used by Iranians for terrorism, then does “some degree” mean only 50,000 missiles sent to Hezbollah and Hamas rather than 100,000? Or does “some degree’ perhaps mean,someday, 1200 Jews murdered—rather than, say, 120?]
“There is no way they [the Iranian theocracy] can succeed in what they want to do if they are very busy funding a lot of terrorism.”
[But, Mr. Kerry, what do you think Iran really “want[s] to do”? Isn’t Iran “busy” building nuclear bombs, not subways and hospitals? And their nuke program is complementary to, rather in place of, Tehran’s vast terrorism budget. Or do you mean that if Iran spends the money on terrorism, they won’t have enough funds to complete building their nuclear-tipped missiles?]
Antony Blinken in 2023:
“We have not yet seen evidence that Iran directed or was behind this particular attack, but there is certainly a long relationship.”
[At what upcoming date do you think you will need to amend this ridiculous declaration—in the same fashion you just deleted your recent tweet calling for a ceasefire the moment Israel was posed to strike back?]
State Department spokesman Ned Price (2023):
“Since April of 2021, we have demonstrated in very real and significant terms our commitment to the humanitarian needs of the Palestinian people. We’ve provided over $890 million for Palestinians, including over $680 in humanitarian assistance for refugees in the region through UNRWA … When Secretary Blinken was in Ramallah, he announced another $50 million in funding for UNRWA.”
[You certainly did show your commitment to the “needs” of the Palestinian people, which in the case of Gaza resulted in the most sophisticated, reinforced-concrete labyrinth of military tunnels in history, given the plethora of imported building materials purchased with fungible Western dollars to prepare for the mass murder that we just saw in Southern Israel.]
Ambassador Nicholas Burns:
“The Trump Administration’s decision to end U.S. assistance to Palestinian refugees is wrong on every level… heartless and unwise.”
[What was wrong on every level and certainly heartless and unwise was the Biden State Department’s nihilist decision in the very moments of taking power to resume hundreds of millions of fungible dollars to the Palestinians, much of which no doubt ended up in increased spending for rockets and tunnels. Note that in 2021 the Biden Administration was warned of just that danger by its own state department—and was ignored by diplomats such as yourself: “We assess there is a high risk Hamas could potentially derive indirect, unintentional benefit from U.S. assistance to Gaza.”]
NFT market slump shows it’s maturing toward ‘genuine utility,’ execs argue
Decentraland Foundation executive director Yemel Jardis believes as people become more educated about NFTs, the focus will shift from speculative trading…
Decentraland Foundation executive director Yemel Jardis believes as people become more educated about NFTs, the focus will shift from speculative trading to genuine utility.
A steep collapse in the price of nonfungible tokens (NFTs) shouldn’t be seen as a sign of distress but rather a signal the technology is maturing, according to Web3 executives.
“I wouldn’t say the NFT market has regressed,“ Decentraland Foundation executive director Yemel Jardi told Cointelegraph. “Rather, it’s maturing."
Jardi’s comments come after a September report from dappGambl that analyzed over 73,000 NFT collections and concluded that as much as 95% of the NFTs studied had no value, as prices, sales volume and transactions have slid over the past year.
Jardi stressed that markets are cyclic and it is natural for there to be periods of adjustment.
He attributed sliding NFT floor prices partly to “speculative trading” and said the value of NFTs should instead be anchored to their utility.
“As people become more educated about NFTs, their use cases and their utilities, the market will stabilize and the focus will shift from speculative trading to genuine utility and innovation.”
Anjali Young, co-founder of the tokenized community-management platform Collab.Land, isn’t surprised about the anti-NFT sentiment either.
“Any innovation — especially this one with financial impact, cultural value and status — will attract questioning during its downs,” she said.
Young believes many projects have stumbled since marketplaces such as OpenSea removed mandated royalty fees in late August.
Despite this, Young claimed that NFTs are “here to stay” and expects they will be more frequently used for loyalty programs, rewards, advertising and proof of authenticity in the coming months.
They've left us all for dead, saying 95% of NFTs are worthless.— Rarity Sniper (@RaritySniperNFT) September 23, 2023
But the truth is very, very different.
Look no further than car companies and their adoption of NFT tech ️
From collectibles to supply chains, perhaps no industry is more bullish on Web3.
A short thread
Tama Churchouse, chief operating officer of Cumberland Labs, recently opined that NFTs aren’t “dead,” arguing that recent developments in the space show there are still signs of life.
While the NFT market has primarily been dominated by digital art, Jardi said that nonfungible tokens remain an important tool for the broader digital landscape, as ownership of tangible assets can be denoted to users in novel ways.
Wow, someone just listed a $26.5 million building in one of New York City's most prestigious areas as an #nft.— Chris Wieduwilt (@deloreanchris) June 6, 2022
Handling property rights through NFTs is a very exciting use case to cut out the middle men. #realestate #nfts #NFTCommunity #nftcollector pic.twitter.com/PowOwwMZsb
Jardi believes governments and institutions will leverage NFTs in the future for various use cases. On Oct. 9, the Chinese-state-owned newspaper China Daily announced plans to launch a platform for trading digital collectibles.
The entertainment sector is another huge market for the NFT industry to capture, according to Scott Lawin, CEO of sports token platform Candy Digital.
Lawin told Cointelegraph that 24% of Major League Baseball fans who entered stadiums with mobile tickets in 2022 redeemed their complimentary commemorative digital ticket provided by Candy as a form of memorabilia.
“Those are all utilities of NFTs in real time,” Lawin added.
On the brand side, Adidas, Bud Light, Gucci, Prada and other companies dipping into the NFT space have seen a recent uptick in the number of active users on their Discord channels, Young said.
The NFT market capitalization currently stands at $5 billion, according to data from Forbes Digital Assets. The Yuga Labs-owned CryptoPunks and Bored Ape Yacht Club collections are the two largest, with market caps of $710 million and $400 million, respectively.china
How About Hunter? Justice Department Adds FARA Charge To Menendez Prosecution
How About Hunter? Justice Department Adds FARA Charge To Menendez Prosecution
Authored by Jonathan Turley,
The Justice Department this week…
The Justice Department this week hit Sen. Bob Menendez (D-NJ) with a superseding indictment including a new but all-too-familiar charge: being an unregistered foreign agent under the Foreign Agents Registration Act (FARA).
I cannot recall another sitting member of Congress being criminally charged as a foreign agent.
Yet even if this is the first such case, the charge has been freely used by the Justice Department in all but one case: Hunter Biden.
The indictment accuses Menendez of being a foreign agent on behalf of Egypt.
Also charged under the law is Menendez’s wife, Nadine, and Egyptian American businessman Wael Hana.
After they discussed various foreign policy priorities at one dinner, Nadine is quoted as asking her Egyptian counterparts, “What else can the love of my life do for you?”
The government alleges that the couple agreed to have Menendez “use his power and authority to facilitate such sales and financing to Egypt.” In addition to other benefits, the government alleges that Hana promised to put Nadine on the payroll of his company in a “low-or-no-show job.”
The indictment further alleges that the senator disclosed “nonpublic information about the United States’s provision of military aid to Egypt” during a dinner with Hana in 2018.
It also claims that the senator “secretly edited and ghost-wrote” a letter “on behalf of Egypt” trying to convince other senators to release a hold on $300 million in aid to the country.
The inclusion of the FARA charge against Menendez, his wife and his associate only highlights the absence of any such charge against President Biden’s son Hunter.
For years, some of us have raised the glaring contradiction in how the Justice Department has approached the Hunter Biden case with its treatment of past defendants like Donald Trump associate Paul Manafort.
The Justice Department has been quick to indictment Manafort and others on FARA charges, but continues to prevaricate over such a charge for the president’s son.
Indeed, when Menendez was charged, I wrote about the striking similarities in the cases, including the gifts and benefits showered on both men.
They remain similar in every way except the charges.
FARA covers anyone acting as “agent of a foreign principal,” including but not limited to (1) attempting to influence federal officials or the public on domestic or foreign policy or the political or public interests in favor of a foreign country; (2) collecting or disbursing money and or other things of value within the United States; or (3) representing the interests of the foreign principal before U.S. Government officials or agencies.
It is sweeping.
So is the definition of what a “foreign principal” encompasses, including “a foreign government, a foreign political party, any person outside the United States (except U.S. citizens who are domiciled within the United States), and any entity organized under the laws of a foreign country or having its principal place of business in a foreign country.”
It is easy to see why FARA charges have been quickly brought in cases ranging from Manafort to Menendez. It is less clear why such charges remains strikingly absent from the Hunter case.
In Hunter’s case, he was selling what associate Devon Archer called the “Biden brand” and asking, to paraphrase Nadine Menendez, “What else can [my dad] do for you?”
The House committees have confirmed not only millions transferred to Hunter and other Biden family members, but direct contacts made by Hunter with federal officials and agencies in relation to his foreign clients.
Archer described how Burisma executives told Hunter that they were worried about the anti-corruption investigation of Ukrainian Prosecutor-General Viktor Shokin.
Archer testified that Hunter immediately “called D.C.” in response to the plea.
Shokin was later fired at Vice President Joe Biden’s demand.
In shaking down a Chinese source for more money, Hunter reportedly sent a WhatsApp message that reminded him that “The Bidens are the best at doing exactly what Chairman wants.”
The message was to Gongwen (“Kevin”) Dong, a CEFC China Energy executive with close ties to the Chinese government, and included a threat that “I am sitting here with my father and we would like to understand why the commitment made has not been fulfilled … I will make certain that between the man sitting next to me and every person he knows and my ability to forever hold a grudge that you will regret not following my direction. I am sitting here waiting for the call with my father.”
Throughout his open influence-peddling, emails show Hunter was fully aware of the risk of being charged under FARA.
The problem with FARA is that it would require the Bidens to publicly acknowledge their work as foreign agents and, by extension, their massive influence-peddling operation.
In one message, Hunter addressed his work for the Chinese CEFC energy company and warned:
“No matter what it will need to be a US company at some level in order for us to make bids on federal and state funded projects. Also We [sic] don’t want to have to register as foreign agents under the FCPA which is much more expansive than people who should know choose not to know. James has very particular opinions about this so I would ask him about the foreign entity.”
“James” is his uncle Jim Biden, who has also been regularly accused of corrupt influence-peddling tied to Joe Biden.
In the message, Hunter gets it.
The law is indeed “expansive.”
His uncle clearly gets it.
The question is why the Justice Department gets it in every case except those with targets named Biden.
For many, the question is not whether Hunter has acted as an agent of foreign principals but whether the Justice Department is acting as an agent of the principal Biden.
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