24: China's Lehman Moment?, The Rogue Swiss, Lowering Your Standards, Facebook Forgot to Take Its Pills, Norwegian House/Disco
Investing & Business
Is Evergrande "China's Lehman moment"?
Reading time: ~10 minutes
For some metrics check out this CNBC report:
Evergrande owns more than 1,300 real estate projects in over 280 cities in China.
Its property services management arm is involved in nearly 2,800 projects across more than 310 cities in China.
The company has seven units dabbling in a wide range of industries, including electric vehicles, health-care services, consumer products, video and television production units and even a theme park.
The firm says it has 200,000 employees, but indirectly creates more than 3.8 million jobs every year, according to its website.
Evergrande’s shares and bonds are included in indexes across Asia.
In an August report, S&P estimated that over the next 12 months, Evergrande will have over 240 billion yuan ($37.16 billion) of bills and trade payables from contractors to settle — around 100 billion yuan of that amount is due this year. 🥵
A paint supplier to Evergrande, Shanghai-listed Skshu Paint, said in a filing that the real estate firm repaid part of its debt in properties – and uncompleted ones at that.
More crunchy details on Evergrande by Matt Levine:
It seems to me that what is interesting about Evergrande is not so much the magnitude of its debt problems but their variety. Evergrande owes money to Chinese banks. It owes money to foreign hedge funds, and foreign investors own its stock. It owes money to suppliers, and to Chinese retail investors in those wealth management products. And it owes apartments to buyers. And the retail investors who bought Evergrande wealth management products were often also Evergrande homeowners, because the products were sold at Evergrande buildings
Inside the Mind of a Bear - A Portrait of Marc Faber
Reading time: ~10 minutes
Asian Century stock published a great portrait this week on Marc Faber, Swiss stockbroker turned doomsayer.
Go read the portrait, very well put! And also pay attention to the explanation to his framework for understanding market cycles in emerging markets (from his 1992 book The Life cycle of emerging markets), with a hilariously on point and detailed timeline ⬇️
Thought-provoking stuff…
Mediocratopia
Reading time: ~10 minutes
Very interesting post by Ribbonfarm on hardwork and mental health, with the backdrop being the great resignation:
Under stress, there are those who try harder, and there are those who lower their standards. Until very recently, the first response was considered a virtue, the second was considered a vice. The ongoing wave of burnout and people quitting or cutting back on work when they can afford to suggests this societal norm is shifting
[…]
Lowering standards is implicitly a way to value the illegible whole of your life, over its entire indefinite future, over any narrowly legible aspect, especially one that only matters in a fixed way within a fixed time horizon.
[…]
Lowering standards is how you back off from prematurely optimizing outcomes in a particular finite game in favor of extending and enriching the infinite game. Lowering standards can be understood as the kaizen of irreversible disruption. It is using a slippery slope as a feature rather than a bug. It is kinda half-burning your bridges. It is doing radical things in an incremental way
My main takeaway in the conclusion:
To bring it back around to the wave of quitting in response to pandemic burnout that inspired this post, that’s a case of people intuitively, and correctly, realizing that lowering your standards of adherence to the societal script of careerism is the right thing to do when you sense an illegible toll on mental and spiritual health. Lowering your standards around whatever you’re up to is the best way to challenge your understanding of both the situation, and yourself.
Not sure I agree 100% with the approach as I’m closer to the other band usually, but really interesting to see this inversion of valences! TL;DR → Don’t be John Henry
PS: this post is part of a Series called Mediocratopia, check it out if you’d like to see more
Facebook & DSM-V
Reading time: ~10 minutes
Easy squeezy, John. First off, identify what behaviors are not acceptable. Images of Tim Cook (respect for privacy), Marc Benioff (concern for the commonwealth), or Indra Nooyi (empathy) are the kryptonite to Sociobook. These vulnerabilities could inhibit the firm’s superpower: making more money while inflicting more damage than any firm in history.
Instead, the real North Star at Facebook is simple: understand the behavior of sociopaths. Your team needs to continue to demonstrate and reinforce the following characteristics of how, according to Psychology Today, sociopaths seduce their victims (Congress, regulators, media, citizenry):
— False expressions of love
— False promises of protection
— Fake compatibility (I’m like you)
— I’m the real victim (turning things around on accuser)
— Fantasy villains (inventing crises you alone can fight)
GenerationLibre, a French think-tank, also published several pieces (a blog post and a tribune) on the subject:
Treat for the Ears
Other Interesting Links
Wholesome video about the coolest functional alcoholic I’ve ever seen.👀
Until next week!
Antoine