Evergrande. WOW so right now you barely can open any piece of financial news without seeing this word plastered just about everywhere and rightfully so. Because this could potentially become China’s Lehman Brothers moment, which for those of you who might not be too familiar with, Lehman Brothers was once one of the biggest investment banks in the United States. But ultimately they ended up filing for bankruptcy on September 15, 2008.
Forcing hundreds of their employees to pack all of their stuff into boxes and walk out onto the NYC streets. Leading to a both humbling and spine chilling reminder for many, that indeed no company was ever too big to fail..
Lehman Brothers collapse also sparked the start of what became known as the Great Depression of 2008. And coincidentally this situation in China is also happening during the month of September, which historically is one of the worst performing months for the stock market in general. Now Evergrande is based in the Chinese city of Shenzhen and they invest in, build, and manage thousands of residential properties. But what you need to know is that they have over $310 billion dollars in liabilities that they owe to various banks, constructions firms, and other creditors. Also their stock has tanked almost 90% in the past year alone and its looking more and more likely that they will not be able to pay their debt in time.
Thus this was one of the primary causes for the majority of the panic selling that we saw in both the crypto and stock markets all throughout the trading day on Monday. As many investors fear the trickling negative impact that such a massive collapse could have globally. But now here are two reasons why I strongly believe that this is actually nothing more than just another beautiful and INCREDIBLE buying opportunity for us as investors!
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