Welcome back to the channel everyone today, i want to explain whether the market is already starting to crash. You may have seen the pre-market this morning for amc and it is looking very, very red, but so is the wider market itself. I also want to give you a bit of an update on evergrande and talk about what's going on in china, so stay tuned and let's make some money, but before i dive into the video i just wanted to quickly announce that i've now partnered with blockfi blockfi Is a cryptocurrency investing platform where you can obviously invest in cryptocurrency? You can also get a block five credit card that pays you cash back in bitcoin or other cryptocurrencies. You can also just deposit cash on the platform and earn up to eight percent interest per year, and you can also get crypto backed loans as well, so guys be sure to check out the link down in the description below to earn up to 250 worth of Bitcoin, when you make your first deposit - and i want to dive straight in with the key information, so you may have seen this morning that cryptocurrency and the wider market is very, very red and therefore, while today may not be the best day to buy cryptocurrency.

I do think today is the best day to get prepared to take advantage of the massive dip open, an account with blockfy and deposit cash. That way, you can start earning that eight percent and you can be absolutely ready to take advantage of the big dip. We can also see that the pre-market for the s p 500 is looking just as disastrous. On friday, we closed below this line of support, and today, on monday, in the pre-market, we are down significantly already down one point: four: six percent in terms of evergrande, we can see the exact same thing today.

Evergrande is down 10.24 and at one point during the day they were down nearly 20 and again, if we look at the hang seng index out in china today, they're down nearly seven percent in one singular day again over the last five days, it's just been constant Red out in china, so yes, even though the pre-market for amc is not looking too great down six percent, it's not just amc! It's the wider market, not only in china as well, but it's already starting to bleed over into the us and into cryptocurrency as well. So let's talk about why evergrinder is down so heavily and why this is already having an impact on the market. Evergrande started repaying investors with discounted properties over the weekend. This, i think, is a terrible idea and is going to crash the chinese property market.

But let's read on china: evergrande group kicked off a process on saturday to repay investors in its overdue interest. Products with discounted properties, investors who opt for discounted real estate in layer of cash can start contacting worth. Managers for more details ever grande's wealth division, said in a post on its wechat account. More than 70 000 people bought the products, including many evergrande employees.

Bloomberg reported earlier, citing an executive of evergrande's wealth division about 40 billion yuan or 6.2 billion us dollars of the products are now due in an effort to steer investors away from cash repayments. The company is pushing steep discounts on property assets. Investors can invest in residential housing units at a 28 discount offices at a 46 discount and stores and parking units at a 52 discount now. Firstly, i think this is really really tricky, because investors are going to have to calculate how much of an actual discount they're really getting.

Yes, okay, investors can invest in residential housing at a 28 discount. Therefore, they're getting a 28 benefit from the current market price of that residential housing compared to the price they're paying and that's effectively. What's going to pay off that loan interest, that's due, but obviously that residential housing, current market price potentially isn't the true value, or maybe not the value that it's going to be in two weeks time. Maybe in two weeks time the chinese property market is going to crash by 20 and therefore the investors are only getting an 8 discount.

So therefore, it's going to be tricky for the investors to actually take up this offer because they don't really know how much of a discount they're going to be getting and they don't really want to sell themselves sure they could be getting say. 300 million dollars worth of interest repayments and yes, they may be getting a 300 million discount on properties at the moment, but in two weeks time that could all of a sudden turn to only a 100 million discount, which is a massive massive difference. Now, on top of that, obviously evergrande are now pushing as much real estate as they physically can out into the market at fire. Sale prices therefore, basically forcibly crashing the chinese real estate market.

So i think this is a massive massive problem. For those two reasons: a they're just creating fire sales so basically causing the chinese property market crash, but also the investors potentially going to get a lot less than they bargained for and therefore may not even take up this offer. But the fear and certainty and doubt is already going to be caused by evil grande and therefore the market is going to experience. The impact and the investors might not even take up this offer for the cash option.

Investors can choose to be repaid 10 of their principal and interest every quarter with full repayment in two and a half years bloomberg reported earlier. Investors in the products can also offer payment discounts on residential units they've already purchased. According to the revised plan unveiled on monday. Again, this also sounds like a bit of a nightmare, because investors are only getting 10 of the principle.

They should have been paid and interest every quarter with full repayment, supposedly in two and a half years, if evergrande doesn't magically go bankrupt, which it will on top of that, we've also got a video from abc news: australia, talking about the collapse of evergrande and how They've already started to demolish buildings in china in china's south west apartment blocks are going down 15 towers unfinished for seven years. The developer bankrupt it's not an isolated case. These towers were recently brought down in shanghai after 20 years of stalled construction across china. The building boom that powered the economic miracle is running out of steam and it's the little guys who are suffering for the past week.

Suppliers, investors and some employees have descended on shenzhen at the headquarters of property, giant evergrand. All of them want their money back. This supplier from northern china has six million dollars owed to her. We have no hope we may as well be dead, there's nothing we can do.

This. Woman from shanghai is 2 million out of pocket, they've offered to give us property or commercial real estate as collateral, but these are junk properties they can't sell, so we won't be able to sell them either. Over the years, chinese state banks kept lending to evergrand, despite its melting debt, because it seemed too big to fail, but the days of china promoting growth, no matter the costs are over. I think the choice kathleen what they're doing is to make sure that the market is really sustainable, so that is important.

Many experts think there won't be a bailout for evergrand, just a slow, painful restructure to pay back whatever it can to those owed and to send a message to other chinese companies to get their house in order bill. Birdles abc news. Now, there's two things there that i found really really interesting. The first is the scale of which the demolition is already starting to happen.

There is 15 20, maybe even 30, big high-rise apartment buildings that have just been demolished. That goes to show just how behind ever grand they were and how they've been in the failing position for a long long time. The second interesting thing that i picked up is that not only are evergrande offering these deep discounts on the properties to those investors but they're, offering them deep discounts on junk properties that are potentially only half finished and likely won't even be completed. And therefore, it's very very unlikely that those investors will take up that deal now.

We've also had some comments from ubs three weeks ago. We did not see any imminent risk of a credit event occurring forever grande. Since then, there have been a number of setbacks which have led us to believe that a credit event seems unavoidable. Now that seems like typical banks, not admitting there's a problem when there absolutely is a problem, and now all of a sudden, because it's in the news, the banks, all think it's a problem now.

We also know that ubs and a lot of other banks like hsbc and also institutions like blackrock and vanguard, have massive massive exposure to evergrande. We also know the hang seng property index has just fallen 5.4 to its lowest value or its lowest rate since 2016., and on top of that it seems, morgan stanley are all of a sudden predicting a 20 correction in the s p. 500. The ice scenario is starting to look more likely and could result in a more destructive outcome.

Now it seems like a lot of major banks, are expecting this credit event and the default of evergrande to spill over into u.s markets, and i think that's exactly what we're seeing today, with the s p 500, already dropping a percent and a half in the pre-market And amc and all other stocks for that matter being hit quite badly already. We think the mid-cycle transition will end with the rolling correction. Finally, hitting the s. P 500 we've laid out two near-term risk paths that could lead to this outcome, fire, which is the fed beginning to remove monetary accommodation in response to an overheating economy and ice earnings.

Revisions and higher frequency macro data points to decelerate. Amid demand, pull forward supply, chain issues and margin pressure this week we dive deeper into both of these paths and point to accelerating risks on both the policy and growth fronts. The typical mid-cycle fire outcome would lead to a modest and healthy 10 correction. In the s p 500, however, the ice scenario is starting to look more likely and could result in a more destructive outcome, as in a 20 plus correction.

Now, on top of this, don't forget it's not just evergrande. That's in this position. Evergrande are not unique. They are just typical, there's, also sunak and also country garden, and many other large chinese property developers they're also in a very very similar position.

It wouldn't surprise me if those buildings that were being demolished weren't just ever grande buildings, but also other buildings from other large property developers and there's also going to be tons and tons of u.s banks that are not just exposed to eva grande, but are also exposed To these other property developers, and therefore i wouldn't be surprised if the losses start mounting significantly don't forget, this is going to be a domino effect in china just the same way that we're going to see a domino effect of the funds shorting mc now. I also want to talk about what this is going to mean for amc. I do still think that amc's short squeeze play is absolutely still on, and i do think that amc is going to recover from this pre-market dip, maybe not today, but over the next few weeks, as banks start feeling the pressure of evergrande in china as the asset Reserves at those banks start dwindling. It's only going to put more and more pressure on those over leveraged short positions and when their asset positions fall too much and they don't then meet the margin requirements.

They are going to have to start covering those short positions and decreasing their leverage to ensure they meet those margin requirements and, at the end of the day, that does mean that they are going to have to cover their amc short positions. They are also going to have to set off some of their long positions or at least exchange those long positions with the dtcc for cash and use that cash to cover their short positions, to reduce down their margin and their leverage. Now, while i don't think today is the best day to buy cryptocurrency, i do think today is the best day to be organized and open accounts with blockfy and make deposits ready to take advantage of the cryptocurrency dip. When you do make a deposit at least you're gon na be earning up to eight percent a year on your cash, and you can also take advantage of any big cryptocurrency dips, guys be sure to.

Let me know down in the comments below what you think about. Evergrande and whether you think the market crash is already starting to be felt over in the us markets and as always guys, if you enjoyed this video, be sure to check out some of my others. Alternatively, subscribe to the channel and do that notification bell. Because that way, you'll be alerted when i upload a new video cheers.