#DebtWoes

[gqresearch24]

Shimao Group Faces Liquidation Petition Amidst China's Property Sector Turmoil

(Source-constructionworld.in)

Creditors Take Legal Action

Shanghai-based real estate titan Shimao Group is the latest casualty in China’s tumultuous property market as it grapples with mounting debt and creditor pressure. On Monday, the company disclosed receiving a liquidation petition from a Chinese state-owned bank, marking another instance of creditors resorting to legal measures to recoup funds from troubled developers in the world’s second-largest economy.

Shimao Group Legal Petition and Financial Implications

According to a filing with the stock exchange, China Construction Bank (Asia) filed a “winding-up petition” against Shimao Group on April 5 in Hong Kong. The petition, citing a financial obligation of approximately HK$1,579.5 million ($204 million), underscores the deepening financial woes facing the property giant. Despite the legal action, Shimao Group has asserted its intention to vigorously oppose the petition while simultaneously striving towards an offshore restructuring aimed at maximizing value for its stakeholders.

Roots of Shimao’s Debt Woes

Shimao Group’s debt predicament traces back to July 2022, when it defaulted on interest and principal payments on a $1 billion bond. This default has precipitated a sharp decline in the company’s share value, plummeting over 14% in Hong Kong on Monday and nearly 40% year-to-date. The company’s challenges mirror those of numerous Chinese developers entangled in a crisis sparked by government measures to curb excessive borrowing, aimed at deflating the property bubble.

Impact on China’s Economy

The ripples of China’s real estate turmoil are reverberating throughout the nation’s economy. The real estate sector, once a pillar of growth, has now become a drag on broader economic recovery efforts. Lingering effects from pandemic lockdowns compounded with challenges like record-high youth unemployment and financial strains at local government levels intensify the gravity of the situation.

Evergrande’s Precedent and Ongoing Concerns

The plight of Shimao Group echoes the dramatic saga of Evergrande, the emblematic face of China’s property crisis. In a landmark decision, Evergrande was ordered to liquidate by a Hong Kong court in January. The failure to reach a debt restructuring agreement after 19 months of negotiations underscores the complexities and uncertainties surrounding the fate of investors, employees, and homebuyers entangled in the fallout.

Industry-wide Struggles

Shimao Group’s tribulations are not unique within the sector. Country Garden, another prominent developer, faced a similar fate after defaulting on its debt last year, prompting a liquidation petition from a creditor in February. As the domino effect of defaults and legal actions unfolds, the broader implications for China’s economy remain uncertain, with stakeholders anxiously awaiting resolution amidst the ongoing turmoil in the property market.

Also Read: Ripple CEO Forecasts Crypto Market to Surpass $5 Trillion

[moneystories]

Trying to keep up

I am 63 and for the first time in my life I have had to use one of the quick loan/high interest rate "financial institutions." The interest rate is 279%. When I was doing the paperwork and the young lady told me about the interest rate, I said out loud "Whatever happened to usury laws?" She said, "What is usury?" My response was, "Forget I said it. It doesn't matter." And her response was, "I don't know anything about usury. Please sign and initial in these two places." I feel like I am being held captive but it was the only thing I could and was a small amount of money. The company that made the loan wants the public to think they are saints. Back before Christmas they gave a $300,000 cash gift to a Nashville charity and milked it for publicity for all it was worth. Made me see red. They are legal loan sharks and their concern about me and my circumstances are best explained by charging 279.5% interest. In all honesty, I have to me mad at myself too for getting myself in the predicament I was in - needing a surprise $400 loan. I have a bank account with Legends Bank in Clarksville. I love the people. It is a small town bank, but I am no fool. I am nobody special and I am not treated special. If I was a Clarksville blueblood or "mover and shaker" I would get the favors shown those folks. I use my checking account & debit card for my own convenience. I am not charged fees for anything. I don't bounce checks. This is all well and good, but when I think about the fact that most people don't have these relationships (even very basic ones like mine), live check to check like I do, it gets depressing. I gave up on getting ahead a very long time ago. I just want to keep up.

[polixy]

Will Student Debt Add to America's Fiscal Woes?

Will Student Debt Add to America's Fiscal Woes?; With a pair of new laws in 2008 and 2010, Congress fundamentally changed the student loan market, making the U.S. government the sole supplier of ...; Google Alert - site:blogs.cfr.org/geographics; https://www.google.com/url?rct=j&sa=t&url=https://blogs.cfr.org/geographics/2012/03/05/debtwoe/%3Fcid%3Dsoc-in-pinterest-studentdebt-062012&ct=ga&cd=CAIyGjQyZDAwNTlkN2VhNTUzY2Q6Y29tOmVuOlVT&usg=AFQjCNFWt3usQKDGKJpqhhuGPb5l-D-D4Q; ; July 29, 2017 at 06:58AM

[moneystories]

Allies with Ally Bank

For certain budgeting categories that are infrequent but involve large sums of money (e.g. semi-annual car insurance payment) and for particular savings goals (e.g. house downpayment, emergency fund) I find it helpful to have separate savings accounts for them so that I don't accidentally spend the money and when checking my balances I can easily see how much money I actually have available in my checking and general savings accounts. 

Ally Bank makes it really easy to do this with their near-instantaneous process for creating a new savings account once you already have one and the ability to give accounts nicknames, and if a particular account is no longer needed I can hang onto it until I need one for some new savings goal and give it a new nickname. 

I came up with this system after years of failing to keep the funds truly separated in practice when using budget software because when out and about it is a lot easier to check my bank account balance that I know is accurate than to check the mobile site or app for budget software that may not have been updated in a week. I can make on the fly decisions about discretionary spending without trying to do the mental math to figure out if that is my vacation budget or actually the money for a house downpayment. 

The trouble is I have about six savings accounts right now, which is a headache come tax season. I would love to be able to create some sort of virtual partition within a single bank account so that I can see the separate balances but it's all still one account with one interest pool.