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okstate987

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Shares in China’s Evergrande plunge again as fears of contagion grow

Shares in the embattled Chinese property company Evergrande have plunged again as investors weigh up whether the group’s massive debt problems could trigger a broader sell off across all financial markets.



‘China’s Lehman Brothers moment’: Evergrande crisis rattles economy

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Evergrande shares closed 10.2% lower in Hong Kong on Monday, a slight recovery after being down 19% in the morning, hitting an 11-year low.

The company, China’s second-biggest developer which owes $300bn to contractors, investors and homebuyers, dragged the Hang Seng index down to its lowest point for nearly a year.

Monday blues! Hang Seng Index drops 3% as #China worries related to #Evergrande, the second-biggest property developer in China with about USD 300 billion in #debt, spike. pic.twitter.com/mj7jHTyFvK
— jeroen blokland (@jsblokland) September 20, 2021
Other large Hong Kong property stocks such as New World Development and Henderson Land were also seeing double-figure drops in their prices on Monday amid widespread expectation that Evergrande, which has been crushed by a Beijing crackdown on highly leveraged developers, will default on some of its repayments this week.

It is feared such a move could cause a possibly chaotic knock-on effect through the Chinese economy and beyond.

The contagion factor was most visible in Australia where the benchmark ASX200 index closed down 2.1% on Monday afternoon as investors dumped mining stocks such as BHP and Rio.

The price of iron ore, Australia’s main export, has fallen 60% to below $100 a tonne from its high point in May thanks to a slowdown in the Chinese property and construction sectors. If Evergrande collapses, the sector’s difficulties are likely to accelerate, sending iron ore lower still.

European stock markets fell on Monday morning, with the FTSE 100 index dropping 1.75%, or 120 points, to 6842, a two-month low, with mining stocks hit badly. Wall Street is also on track to fall when trading begins in New York.

“Any downturn in China would have significant implications for commodities demand given its status as the world’s largest consumer of many minerals and metals. The situation also has uncomfortable echoes of 2015 when fears about Chinese debt prompted a big and broad-based market correction, said the AJ Bell investment director, Russ Mould.

Concerns about the Federal Reserve’s plans to phase out its huge monetary stimulus policy, surging Delta infections in the US, and signs of a slowdown in the global recovery are all being compounded by the Evergrande crisis.

The Fed’s policy meeting this week is being closely followed, with some experts predicting it could set a timetable for winding in its vast bond-buying programme put in place last year to support the economy and equity markets.


Hang Seng index after it tumbled more than four percent in Hong Kong on 20 September 2021. Photograph: Peter Parks/AFP/Getty Images
Officials have flagged they will begin tapering by the end of the year in order to keep a lid on inflation, though it is yet to indicate by how much and from when.

Wednesday’s announcement comes as several other central banks around the world also prepare to make decisions, with many now considering tightening.



Evergrande investors face 75% hit as company edges closer to restructure

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The shift towards turning off the taps to financial markets comes as the Delta variant continues to spread quickly around the world, forcing some governments to reimpose lockdowns or other strict containment measures.

Among them is China, where a new outbreak is raising concerns about the effect on the recovery in the world’s number two economy, a key driver of global growth.

But despite the growing crisis with Evergrande, the government in Beijing has yet to step in to prevent it from going under. Analysts say that, while leaders are looking to curb excessive risk-taking, they will probably work to prevent the issue from becoming unmanageable.

“The central government’s priority of social stability makes restructuring likely with haircuts for debt holders, but spillovers to other listed property developers means there will likely be a real economy impact on the real estate sector,” said National Australia Bank’s Tapas Strickland.

“To what extent Evergrande slows the growth momentum remains unclear.”

https://www.theguardian.com/world/2...rande-plunge-again-as-fears-of-contagion-grow
 
Oct 7, 2008
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Anyone else in here holding any weed stocks? I've been holding Tilray (bought Aphria, then it merged with Tilray) for a year. Started buying this dip lately. This sector will absolutely fly once legalization hits. My only advice is to target the biggest companies in the sector.
 

okstate987

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Anyone else in here holding any weed stocks? I've been holding Tilray (bought Aphria, then it merged with Tilray) for a year. Started buying this dip lately. This sector will absolutely fly once legalization hits. My only advice is to target the biggest companies in the sector.
While there is growth potential there for sure, I don't think there is quite as much as one would think. The majority of US states have medical or recreational marijuana and the market is pretty saturated in those areas.
 
Oct 7, 2008
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While there is growth potential there for sure, I don't think there is quite as much as one would think. The majority of US states have medical or recreational marijuana and the market is pretty saturated in those areas.
My plan is to buy ahead of the hype and sell most after legalization so not super long holds for me. I just know a lot of these stocks doubled when the Senate went blue, legalization is the mother of all catalysts, so people will be piling into this sector once that happens.
 
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"Amazon said on Tuesday that it will continue to lobby the U.S. government in support of federal legislation to legalize marijuana.

The tech giant said in a blog post it has endorsed the recently introduced Cannabis Administration and Opportunity Act."

Just imagine getting your weed delivered right to your door via Amazon..

Apparently Oregon has so much weed that if they stopped growing now it would take over 6 years to use the surplus. In California and Canada the taxes are so high that more people buy illegal weed than legal. There is so much supply I don't see how anybody makes any money on this.
 

steross

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While there is growth potential there for sure, I don't think there is quite as much as one would think. The majority of US states have medical or recreational marijuana and the market is pretty saturated in those areas.
Small business is making most of that money now and buying stock would be buying into the corporate takeover of that market as has happened with most markets in the US.


I'm hypothetically taking a small position in MSOS, which is a pure-play US-only company cannabis ETF. I'm paying stupid fees as all small ETFs have, but I don't have the time to keep research on the best of these companies.
 

okstate987

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Small business is making most of that money now and buying stock would be buying into the corporate takeover of that market as has happened with most markets in the US.


I'm hypothetically taking a small position in MSOS, which is a pure-play US-only company cannabis ETF. I'm paying stupid fees as all small ETFs have, but I don't have the time to keep research on the best of these companies.
I feel like many small dispensaries could thrive with a microbrewery approach to the craft...as long as on site consumption is legal.
 
Currently today there 96 container boats at the LA port. 66 are floating waiting to be unloaded. That is only one port. I saw a graphic a while back that shows the cost of renting a container has skyrocketed in the last several months. Where do these supply issues end?

Edit I just realized I saw the graphic on container rentals here. I thought it was Twitter.
 

jobob85

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Credit the poster here. I'm down considerably today, wish I'd have heeded the advice. Oh well, gotta ride it down now I guess.
Honestly, we are not even in correction territory for any of the major indicies. While a bit painful, it shouldn't be alarming yet. If you feel like a correction is coming there is still time to pull in your horns. That said - My trading account is 50% cash and I feel the old adage "Sell in May and go away" may really hold true for 2022.
 

TheMonkey

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Honestly, we are not even in correction territory for any of the major indicies. While a bit painful, it shouldn't be alarming yet. If you feel like a correction is coming there is still time to pull in your horns. That said - My trading account is 50% cash and I feel the old adage "Sell in May and go away" may really hold true for 2022.
I was thinking of pulling out half and trying to catch it on the (hopeful) upswing later. If there is no upswing, at least I still got significant returns.
 

jobob85

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I was thinking of pulling out half and trying to catch it on the (hopeful) upswing later. If there is no upswing, at least I still got significant returns.
I am using my cash position to cover selling weekly puts out of the money on QQQ.

I think the market has the potential for a little more but is fighting headwinds. When a real correction happens, the new market players that haven't seen a real correction will pile on. Remember, these are the same people that have madegreat returns buying failing co's that had large short positions.

Having a larger than normal cash position heading into next spring/summer wouldn't be a bad thing.
 
Oct 7, 2008
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I am using my cash position to cover selling weekly puts out of the money on QQQ.

I think the market has the potential for a little more but is fighting headwinds. When a real correction happens, the new market players that haven't seen a real correction will pile on. Remember, these are the same people that have madegreat returns buying failing co's that had large short positions.

Having a larger than normal cash position heading into next spring/summer wouldn't be a bad thing.
Another two days like we've seen the last few weeks and we'll be in the 10% correction range on all the indexes. I think you're right though, the real buying opportunity will come when the fed raises interest rates.