Hey this is tom, and this is getting out of hand. I'm not even talking about the fact that my grandpa blames himself for what happened with evergrand and not even talking about the fact that i had to explain to him that it's not that ship. That was stuck in the swiss canal, not even talking about the fact that he booked a ticket to china. Apparently now he's going to beijing to try and resolve things.

Good luck to him with that. All i'm seeing is these armageddon titles armageddon this armageddon that, like that all of this about nothing now i've been known to clickbait, i'm not a sing. Although i've been leaning off the clickbait train a little bit lately, but i don't mind: people click baiting, it's just. What really annoys me is a lot of these channels have no freaking clue what they're talking about making videos about evergreen for clicks and views and they're playing off people's fears.

Now you can't blame me for being a proponent of chinese stocks, so believe me, when i tell you that this is real fud and you know, coming for me carries a lot of weight. So let me explain the main question that i want to answer today and you'll get the answer in advance. Before my detailed analysis is. Is this the next lehman brothers event now lehman brothers? You can go google it in 2008, it's an investment bank, it fell under and pretty much almost to the entire used economy with it, and a lot of people are now basically parroting each other on the internet.

Basically saying well, this is the next legal brothers. It's about to collapse, the u.s economy, blah blah blah blah blah, which is complete nonsense, which is the bottom line of this video, and if that's the only thing you needed. No, this is not the next lehman brothers event, sayonara, whatever they say konichiwa, i don't know, but here's the thing i'm just kidding, but here's the real analysis here. So i want to give you three reasons which are undisputable of why this cannot ever be the lehman brothers level event, and the only thing i ask in return is that you don't click, nothing, don't smash, nothing don't buy nothing.

I have no courses, no discounts. No nothing. The only thing i need is your attention, that's it, and for that you can thank our channel members and our patrons. You know for basically saving me from this garbage not to beg for anything so check this out.

There's three reasons why this story - the evergreen story - has no similarities to the lehman brothers story. So, as you probably heard by now ever grant is a chinese company engaged in real estate development they're, massive and they've accumulated a lot of debt. Now the share price have been tumbling down for quite a while. In fact, this isn't really news.

We've been talking about this for a whole year. This stock went from way up here to went down here in the single year. In fact, they lost 90 of the share price in the single year. However, even though this is not actual news in the last five days, there's been a massive shift: the stock actually dipped 20 in the last five days at all.

Well, here's what happened this company? Actually sits on about seven percent of the entire chinese property sector debt. Seven percent of the entire chinese property debt is with evergrand. If you think seven percent is not high. This is freaking china model over.

It's a lot of money now they've accumulated over 300 billion of debt and have coupons coming up. I mean in the next few days, and people are basically trying to figure out if they're going to make the payments or they go to default, because this is going to have a massive impact on this company as well as suppliers, employees and other companies. Obviously - and these concerns are actually what caused the massive spiral down of the entire u.s market, with the exception of a few stocks shout out to lucid yes, but with the exception of a few stocks, the stock market went ballistic, and this is exactly the reason why. However, you can see right now that the market is slowly starting to recover from the panic attack it had a few days ago, and the reason being is that this whole narrative of the contagion lehman brothers event is a complete nonsense, and all i need is about Two minutes to prove to you why it is and here's where things stand right now, so the company actually announced that they will be making the upcoming payment.

I think it is today, but this is the payment that's denominated in local currency, so they have to deal with local banks. It's still not really clear if they're going to shaft or not shaft western and u.s banks with the other debt they have. But let's see, even if the chinese government and this company actually decide to completely shaft the u.s companies and the western companies that actually have money with them, this is still not a lehman brothers type of event. So the first thing you need to understand - and the first reason why it isn't is because they have completely different underlying assets.

Like i mean correlation, minus one lehman brothers were engaged in basically derivatives, financial derivatives, while this company is basically holds real estate. So here's the thing when you're dealing with mortgage-backed securities, which is exactly what limit brothers held. This is the sort of thing that spreads that cancer. This is basically every nook and cranny.

When you pull one thread, the whole piece of cloth actually falls apart, because derivatives tend to do it and it's not really structured. Like real essay, i mean once you pull the thread. Everything collapses. You've seen how the stock market reacts just two days ago, on the other hand, we have every grant that actually holds physical, real estate now, granted that the chinese market isn't deep, i mean the chinese real estate market, but it still has value and a significant amount Of value, that means one thing that this is a completely chinese story.

It has to do strictly with real estate in china. Obviously, employers are going to get hurt. Employees are going to get hurt other chinese companies suppliers, but there's nothing here, creating a correlation. The connection to any systemic failures in the west, obviously, there's lenders that lend the money and individually those lenders.

Those banks will feel the pain, and that is why this is a purely chinese thing, because it's real estate, it only hurts the people that are close to it, meaning the employees, the employers, subcontractors, other companies that did business with them, maybe even lenders, maybe even western Lenders that actually gave the money, but there's nothing here - systemic that completely pulls a thread through the entire u.s stock market and industry. That's going to get pulled here, it's a purely chinese matter and i do anticipate the chinese market to go through thermal, especially the real estate market, but it will have minimal effect if anything on the us market. Actually, i made a video i'm going to put the link right here claiming how this actually benefits the u.s stock market by flowing money from china to the u.s, but it's a whole different discussion. The main thing you need to remember here is that lehman brothers had derivatives that basically were like a piece of jenga when you pulled it, the whole thing collapsed.

This is completely different situation. We're talking about chinese real estate. It's completely insulated. Imagine the quarantine and there's no way to break out of this quarantine.

This is exactly what's going on here now, what's going to happen next year, so evergreen currently holds land now lehman brothers, as i just told you held derivatives now. Here's the problem that lehman brothers had that evergren doesn't have now real estate is not as murky as financial assets. Now financial assets can be really appreciated, can be really depreciated. It's a lot like a manic, depressive kind of incident.

You never know what you're gon na get with real estate. It's not as murky the valuation of the real estate is quite clear. It may not be amazing right now, china, but everybody knows the value of that real estate. You know with the derivative financial instrument.

You know it can be something, and that can be something you know. A tesla stock, for example, is a good example that the financial instrument is not as clear as physical real estate. That is why i see a lot of people going into real estate during inflation. For example - and you see it as well - that's because of that reason the evaluation is very clear and very solid for lehman brothers.

They never had the shot to get out of it. Their derivative structure collapsed, like a house of cards now evergreen as fricked up as they are, they still have a shot to get out of it, because all they got to do is get some cash. Get some patience from the banks finish the projects that they have stuck right now because of lack of cash, sell these assets even at a discount, get cash flow and eventually repay their debt. The only thing they need is patience and cash, and they can eventually get out of this now, usually in the user situation um, you don't have that if you're in trouble, nobody trusts you anymore, they cut off your credit immediately, but this is china and you have To understand that the chinese banks are basically the long arm of the chinese government, so if the government says lend they lend if they say, don't lend they don't lend if they say baby asian they'll be patient.

So i think this is the way for the chinese government to actually help every grant, without bailing them out by using the local banks, to extend more credit to them, to finish their projects and to eventually get out of it. This is what i think is going to happen. So next up we're going to have this situation, a lot of heads will roll a lot of people will get fired, i'm hoping that this is as bad as it gets for those people, but this is china. Who knows um, but what actually will happen next is they'll get the cash from the local banks, or at least some sort of a leeway or grace and they'll be allowed to finish these projects, so they can get cash flow, so they can eventually repay it.

But the chinese government is not going to leave this company, as is because, as is it poses a massive risk, it's too big to fail. This is exactly why they're about to get bailed out indirectly, so the chinese government will actually weaken this company by breaking it apart. I think into a few pieces, one two, three four, five six seven pieces: every department is going to be a standalone company, and that way you create basically weaker structure that doesn't have the synergies that doesn't have the networking and essentially we'll never get to the situation Of too big to fail - and with that being said, whenever you see a video on youtube basically about the armageddon, that's coming with this whole contingent event. You have to understand this is done purely for clicks.

Nothing in it actually makes sense if those people had any understanding of financial principles and how these things work, they would have never said it, but hey everything is fair in war and clicks. I guess well not for me, i'm here to bring you the truth. Behind the scenes, even if it gets me less clicks, i mean it is what it is. A huge shout out to channel members patrons i'll, see you from beijing, because i think i have a flight to catch.

My grandpa i'll see you tomorrow, foreign.