September 23, 2021

China's Massive Real Estate Collapse

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Mesh Lakhani

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Welcome to Talk Money Weekly - where I cut through the noise and curate the best money-related topics from the web.

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Markets & Business

TMW#23: Mailchimp Sells for a Bananas $12B

In this episode of TMW, we touch on the Mailchimp's $12B acquisition by Intuit. Why? Becuase the founders never raised a single dime, and built a massive business. Also, people were giving them shit for not giving employees equity, but it's not actually the case. Check out the episode!

Evergrande Sends Markets Down

China’s massive construction firm just defaulted on their debt, sending the Chinese markets thrashing, which in turn hit the US markets. People freaked out and starting selling assets.

People in China are the ones most at risk, because a lot of them own real estate. Think about when the US housing market crashed, it affected real estate prices as well as asset (stocks etc) prices. Again….this is what happens when you are over levered. You don’t want to default on debt.

Should the US be Worried About Evergrande

A lot of people seem to freaking out on how this will affect the global markets. It seems that Evergrande had $19B of international debt. Which is a small % of their overall debt exposure.

The point being made here, is that even if the US had lent to Evergrande, it’s pennies in comparison to what the Federal Reserve can purchase.

That said, we don’t know enough yet. I’m taking all of this with a grain of salt and will cover it for next week’s podcast.

China Central Bank Saves the Day

What’s the best way to ease the concerns of everyone freaking out about this issue? Inject cash. Seems to be the answer to everything. Evergande has over $300B in debt, and they didn’t pay on time. The Chinese Central Bank eases those conners by providing some liquidity.

What happens in the future is some time of agreement on how they can repay their debt overtime and get their shit together.
What we don’t want to see is a rolling effect. Where more debt payments are missed and more companies start defaulting on their loans. A domino effect would create a ton of uncertainty.

Mark Zuckerberg Fed Jack Dorsey a Goat

LOL. This is just a funny story. Goat doesn’t sound appetizing when you say it out loud. Want some goat? Would you like a slice of goat?

We use goat in a lot of Pakistani food we say “mutton". I’m pretty sure it’s goat. Why am I talking about this? Assuming this was a business dinner, so it fits with the newsletter ok!

Crypto is Becoming too Political

I’ve been hearing this from folks. Things are becoming too political when it comes to crypto. You’ll find that
Republicans/Conservatives are “for” it and Dems/Liberals are against it. I don’t think that’s the actual case, but it is for some high profile political figures.

This is bad. If this get too far, it’s just going become one of those situations where people won’t be able to support something because of the political party it’s associated with. AND WE KNOW HOW THAT GOES. It’s fucking terrible.

That's all the news from this past week!

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