By Carlos Delgado, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=21507919

The Dow Jones plummeted more than 600 points on Monday morning over fears that a massive Chinese property bubble might create a new ‘Lehman Brothers’ moment.

As Fox Business reports:

The Dow Jones Industrial Average plunged 586 points, or 1.7%, while the S&P 500 index and the Nasdaq Composite index declined 1.69% and 1.99%, respectively.

Chinese real estate developer Evergrande’s shares tumbled more than 15% Monday amid worries the company will not be able to make a debt payment later this week.

Some market watchers have called Evergrande China’s “Lehman Brothers moment,” drawing comparisons to the collapse of the U.S. investment bank, which began the 2008 financial crisis.

Hong Kong’s Hang Seng index tanked 3.3% while China’s Shanghai Composite was closed for holiday. The selling spilled over into Europe, where Germany’s DAX 30 fell 2.%, France’s CAC 40 lost 2.39% and Britain’s FTSE 100 dropped 1.61%.

https://twitter.com/EmbryEthan/status/1439961534189301763

If the property giant does default on its massive debt there is a risk of a potential worldwide financial contagion spreading, as Marketwatch explains: 

But in the event of liquidation, there would likely be a “high degree of contagion,” they warned. The spillovers would occur, they said, through three channels:

  1. Investors getting extremely low recovery values, something which would lead to a material loss of investor confidence in the broader property sector and Asia high-yield offshore market and create spillover into the broader Chinese financial assets.

  2. A domino effect of credit events, given that both banks and nonbanks with large exposures to Evergrande could potentially go under or be forced into restructuring. This would again create spill over into other Chinese financial assets and drive underperformance of financials in particular across both [developed market] and [emerging market] credit/equity markets, led by those names with direct exposure either to Evergrande itself, its subsidiaries or its creditors.


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sarah
sarah
1 month ago

MAkes you wonder if this is a forced plan to shut down the banks and confiscate your lifes savings…

Ezra Hollister
Ezra Hollister
1 month ago
Reply to  sarah

It Certainly could be. LET’S FACE IT, They can do ANY DAMNED THING THEY WANT TO. THEY ARE IN CONTROL OF EVERYTHING BUT OUR MINDS,
and they are working Diligently on THOSE, Daily.

Dan Tyree
Dan Tyree
1 month ago
Reply to  Ezra Hollister

And it’s working. They have brain washed enough people already to take over the country.

Lisa
Lisa
1 month ago
Reply to  Dan Tyree

No Experience Needed, No Boss Over ii R Your Shoulder… Say Goodbye To Your Old Job! Limited Number Of Spots Open… 𝐅𝐢𝐧𝐝𝐉𝐨𝐛𝐬𝟒𝟕.𝐓𝐊

Nine Island Girl
Nine Island Girl
1 month ago
Reply to  Ezra Hollister

I think they already accomplished that with the mush brains.
Why do you think so many have rolled up their sleeves???
Fear and control is the name of the game.
Lock and load! Our only hope.

David Baker
David Baker
1 month ago
Reply to  Ezra Hollister

The 2nd Amendment was ratified to grant to the American people the means to unseat tyrants from office. We were told that it’s our responsibility to maintain a “Free State”. As we’re beginning to notice, our State isn’t free. Indeed, our public servants inform us daily that our Bill of Rights will be dismantled.

Gardener fixer
Gardener fixer
1 month ago
Reply to  David Baker

What does this have to do with Evergrande? Pay attention!

Gardener fixer
Gardener fixer
1 month ago
Reply to  Ezra Hollister

I thought the Dems were the main controllers?

Nine Island Girl
Nine Island Girl
1 month ago
Reply to  sarah

New world order!!!!
Build back better!!!!
What do you think this is????

Gardener fixer
Gardener fixer
1 month ago
Reply to  sarah

Like in 2009? Get real and stop living in fear.

David Baker
David Baker
1 month ago
Reply to  sarah

Sometimes the Market Computers intervene, and stop the trading process to prevent a collapse. The banks are most likely in charge of that App.

Jean
Jean
1 month ago

Most of my investments are not in wal street, yet I don’t want it to fall. But, I would love for the chinese to fall. They are buying up American land which should be illegal. I am sick of them. They know the American people don’t want to buy from them so they sneakily put up warehouses, etc here and put American flags on there items saying Product of America. We should start arresting them and make them want to leave our land. Down with them & the treasonous politicians that are in bed with them.

ECE
ECE
1 month ago

LET IT FAIL! Didn’t we learn from past bailout experiments and lame thinking?