A Hong Kong court ordered the liquidation of China Evergrande, the world’s most indebted property developer.
Evergrande has assets of about $245 billion, but owes about $300 billion.
Its demise is a “controlled collapse,” but still raises systemic risk and will hurt investors, says an analyst.
The whole thing was essentially a real estate Ponzi scheme where new investors were paying for pre-existing work, from what I’ve read
New investors were covering existing loans you mean!
No Ponzi scheme here, nothing of the sort. Just good old economics!
But yes, they sold apartments and used the proceeds to finance existing, already sold buildings that weren’t built yet.
This isn’t a pyramid scheme, but it definitely collapses if it stops growing.