Evergrande: China property giant and its founder accused of $78bn fraud
Former billionaire Hui Ka Yan has been fined and faces being banned from the financial markets for life.
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Man all these bad news about Chinese property market, hopefully there isn't a collapse there as predicted.
I hope that the property market collapses and property prices go way down. Surely there are large numbers of people who would like to buy property but cannot afford it at the moment. I hope that happens in many countries.
I mean, that sector is also a huge employer with lots of construction companies and jobs tied directly and indirectly to it. If the construction section comes down, that's going to cause a lot of hardship on a lot of people. So even with cheaper houses (for a while, if the construction sector doesn't improve you'll get high prices again later) I'd say it's a huge net negative for people and their lives.
Ponzi schemes don't make anything productive.
I don't know if you are using the word differently but property market includes stuff like construction companies, development companies, architect companies, material suppliers, engineering companies and stuff like that. Building a house seems fairly productive, for example.
Building a house is productive.
Taking payment in advance before building a house and buying a yaught, then having no budget to build the house so you take payment for another house and use that money to build the first house
is not productive.
Unfortunately all of that is included in that sector. So while that is shit and wouldn't mind them being punished, there's also all the other jobs and economic considerations. A lot of workers are working directly or indirectly within that sector.
No all of that is included because Evergrande is a ponzi scheme. They can undercut their competition by selling houses for such a low price that they can't build them.
So they run on people pouring more and more money in and putting more and more projects on hold. That's a ponzi scheme.
Building houses doesn't have to be a ponzi scheme. Evergrande is.
Evergrande operates in the same sector and is a big player there. I won't shed a tear for them. What I'm saying is that hopefully them going down won't take anyone else with them and cause havoc on the whole sector.
It will because now there will be a mass sale. Also China's only means of investment being houses instead of the stock market did help Evergrande pump up their bubble quite a bit.
The Evergrande director will take his golden parachute, many poorer Chinese people will be left scammed, with nothing.
