The Evergrande Crisis Intensifies

Evergrande Group is everywhere. Here's what you actually need to know  

 

Ray Dalio on Evergrande, China, Bitcoin and the Fed

Ray Dalio, founder and co-chief investment officer at Bridgewater Associates, talks about the China Evergrande Group’s debt crisis, doing business in China, the value of Bitcoin and when the Federal Reserve might start to taper its monthly bond purchases. He spoke to Tom Keene on "Bloomberg Surveillance" from the Greenwich Economic Forum in Connecticut.

Evergrande - A Simple Explanation And Thoughts from the "Uneducated Economist"

Cash is King

From GARP –

“Cash flow is at the center of a convergence between financial valuation models and risk models that could dramatically alter the credit risk modeling landscape.

Credit risk measurement will soon undergo a sea-change as a result of the growing importance of cash flow analysis, which has been buoyed by new valuation rules.

The traditional credit risk model that has served many FRM practitioners well during the past decade is the PD/LGD/EAD model. Basically, the riskiness of a loan is expressed in three parameters: the probability that the client will default on his obligations (the probability of default, or PD); the financial loss that is incurred in case of a default as a percentage of the exposure (the loss given default, or LGD); and the exposure at default (EAD) – i.e., the remaining principal of the loan, including missed interest payments.”

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On the brink: Greece heads for default

From The Economist -

“The surprise referendum announced on Friday night by Alexis Tsipras, Greece’s prime minister, has torpedoed expectations of an 11th-hour deal between Greece and its creditors. Instead, Greece will probably miss a €1.5 billion ($1.7 billion) payment to the IMF tomorrow, when its bail-out programme also expires. Last night capital controls were imposed, after the European Central Bank decided to cap the emergency liquidity it provides to Greek lenders. Banks are to be closed for the week and ATM withdrawals capped at €60 a day. More surprises are likely before next Sunday’s vote. One question is what Greeks will vote on. The government will recommend that they say no to reforms the creditors proposed last week. But their offer expires with the bail-out. It is hard to see how Mr Tsipras can stay in office if they say yes. A more immediate concern is markets’ reaction to the weekend’s turbulence. It will be a dizzying week.”