Influential director Melvin Van Peebles has died. He was best known for his independent films Watermelon Man (1970) and Sweet Sweetback’s Baadasssss Song (1971). He was also the father of Mario Van Peebles, who directed New Jack City a generation later.
We are saddened to announce the passing of a giant of American cinema, Melvin Van Peebles, who died last night, at home with family, at the age of 89. In an unparalleled career, Van Peebles made an indelible mark on the international cultural landscape. He will be deeply missed. pic.twitter.com/HpciXXVoYo
— Criterion Collection (@Criterion) September 22, 2021
The Criterion Collection announced the news in a statement that read in part, “In an unparalleled career distinguished by relentless innovation, boundless curiosity and spiritual empathy, Melvin Van Peebles made an indelible mark on the international cultural landscape through his films, novels, plays and music.”
LOS ANGELES — Britney Spears said in a court filing Wednesday that she agrees with her father that the conservatorship that has controlled her life and money since 2008 should be terminated.
The filing in Los Angeles Superior Court from Spears’ attorney Mathew Rosengart says she “fully consents” to “expeditiously” ending the conservatorship, which her father James Spears, who has controlled it for most of its 13 years, asked for in a Sept. 7 petition.
It’s the first time Britney Spears has called for an end to the arrangement in court documents, though she has called for its termination in hearings.
Her filing emphasizes, however, that it is more important to her that her father be removed, calling it “a necessary first — and substantial — step towards Ms. Spears’s freedom and ending the Kafkaesque nightmare imposed upon her by her father, so that her dignity and basic liberties can be restored.”
It is urgent that James Spears be suspended from his role of conservator of Britney Spears’ finances by Sept. 29, the next hearing date in the case, the filing says.
“Mr. Spears cannot be permitted to hold a position of control over his daughter for another day,” the document says.
The documents also reveal that Britney Spears is in the process of putting together a pre-nuptial agreement after getting engaged to her longtime boyfriend Sam Asghari earlier this month. That process will mean the intensive involvement of the conservator of her money, a role her father can’t be permitted to play, the filing says.
The flurry of major filings means that next week’s hearing could be pivotal.
Judge Brenda Penny, who has remained largely neutral in her oversight of the case, will be pressed to decide whether to remove James Spears or to put the conservatorship on a path to termination.
James Spears stepped aside as conservator of his daughter’s person in 2019, maintaining only his role as conservator of her money. He and his attorneys have said that renders many of his daughter’s complaints about his control meaningless.
Jodi Montgomery, a court-appointed professional, now acts as conservator of Britney Spears’ person. Wednesday’s filing from Britney Spears says Montgomery also consents to ending the conservatorship,
Spears had said in a dramatic June 23 speech in court that gave a jolt to the case and galvanized support for her that she was being compelled under the conservatorship to take certain medications and to use an intrauterine device for birth control against her will.
James Spears has denied acting in anything but his daughter’s best interest, and has declined demands that he resign immediately, though he said in court documents that he does have a plan to eventually step down.
But in a major reversal and possibly strategic move, he said in his Sept. 7 filing that if she “wants to terminate the conservatorship and believes that she can handle her own life, Mr. Spears believes that she should get that chance.”
Rosengart has sought to keep the focus on James Spears removal since his hiring in July, and says he will pursue an investigation of his handling of the conservatorship even after any removal.
The conservatorship was established in 2008 when Britney Spears’ began to have very public mental struggles as media outlets obsessed over each moment, hordes of paparazzi aggressively followed her everywhere, and she lost custody of her children.
Chicago Mayor Lori Lightfoot has proposed two pilot programs to help low-income motorists cope with the city’s punitive vehicle-ticketing and debt-collection system. One halves the cost of the citations, the other offers debt relief.
Lightfoot, who campaigned in part on a pledge to end what she has called the city’s “addiction” to fines and fees, also proposed forgiving some tickets when motorists come into compliance with the law, a solution some advocates have supported for years.
“We know that sometimes what we need is simply an opportunity to fix the mistake,” Lightfoot said during her 2022 budget address on Monday, when she unveiled the reforms. “So, for compliance tickets, such as city stickers or license plate expiration tickets, everyone will have one opportunity to fix their violation by simply buying the sticker they need and having their ticket forgiven.”
ProPublica has reported extensively since 2018 on how parking and automated traffic camera tickets disproportionately harm low-income, Black residents, sending tens of thousands into bankruptcy over the past decade. Later reporting was done in collaboration with WBEZ and, combined with the advocacy of several organizations, prompted several reforms by the city and the state. Among them: an end to driver’s license suspensions over unpaid tickets, changes to make the city’s ticket payment plans more affordable, and some modest debt relief.
Despite the reforms, the outstanding debt owed for city tickets continues to grow, from about $1.45 billion in February 2018 to more than $1.8 billion today, according to city officials.
Lightfoot’s latest proposed reforms, which would need approval from the City Council, go further than past initiatives to reduce the financial burden that tickets place on low-income motorists. But advocates for ticketing reforms said the city needs to take more ambitious steps to address the underlying causes of the debt, including reducing the number of tickets issued (typically around 3 million a year), lowering the cost of tickets and setting a statute of limitations on debt collection.
“It’s a great place to start. Folks need help, especially after COVID,” said Rosazlia Grillier, a parent leader with Community Organizing and Family Issues, a nonprofit that works primarily with low-income women of color. “But we need more. … I don’t want us to get complacent or stagnant in thinking this is it. People need some real, real, real relief.”
If approved by the City Council, Lightfoot’s debt-relief program and reduction in ticket costs would be available only to motorists who can prove their income is under 300% of the federal poverty line, which puts the qualifying threshold at about $39,000 for an individual and $80,000 for a family of four. Motorists who qualify for debt relief would only have to pay the tickets they’d received in the past three years, minus late penalties. All older debt, including booting, towing and storage fees for vehicles that have been impounded, would be forgiven. That includes charges related to impounded vehicles that were eventually sold by the city, an issue WBEZ reported on last year.
Both proposed reforms would be run as pilot programs through the end of 2023. Eligible motorists could participate in more than one program, said Cesar Rodriguez, a spokesperson for the mayor’s office.
The “fix-it” option that would clear tickets once motorists come into compliance would apply to anybody who, regardless of income, gets a $200 ticket for failing to have a required city sticker on their windshield or a $60 citation for expired license plates, but would only be available once per license plate. To have a ticket dismissed, motorists would have to show proof they corrected the violation by, for example, providing a receipt for a city sticker, which can cost about $144 annually for a large passenger vehicle.
ProPublica and WBEZ reported in 2018 on how residents of low-income, majority-Black neighborhoods on Chicago’s West and South sides have been disproportionately hit with city sticker tickets, one of the most significant sources of outstanding ticket debt and a debt routinely tied to bankruptcies. With late penalties, these citations could grow to $488 each. Lightfoot’s administration has since ended the practice of doubling the price of these tickets when they aren’t paid on time; late penalties have dropped to $50, though collections fees are still applied.
Lightfoot has been criticized, however, for lowering the threshold for $35 speed camera tickets from 10 miles an hour over the speed limit to 6 miles an hour over the limit.
Priya Sarathy Jones, the national policy and campaigns director at the Fines and Fees Justice Center, called Lightfoot’s proposals a “step in the right direction by alleviating some collateral harm of fines and fees on low-income communities.”
“But to address the root of the problem of Chicago’s extreme overreliance on this toxic revenue source,” she added, “city leaders will need to consider fundamental changes in enforcement practices,” including issuing fewer tickets and eliminating some types of citations altogether.
Betty Soskin has accomplished a lot over the course of her life.
She’s been a published author, a songwriter/activist during the civil rights movement and a businesswoman and now serves with the National Park Service — holding the title as the country’s oldest ranger.
Now, Soskin can add yet another milestone to her story: turning 100.
Soskin was born in Detroit, Mich., on Sept. 22, 1921. She currently works as a ranger at the Rosie the Riveter/WWII Home Front National Historical Park in Richmond, Calif.
Growing up in a family with Cajun-Creole roots, Soskin and her relatives migrated to the West Coast, eventually settling down in Oakland, Calif., after the Great Mississippi Flood damaged New Orleans in 1927, according to the National Park Service.
She had a love-hate relationship with Rosie the Riveter
Soskin’s career with the National Park Service began in 2000 after she attended a presentation on a plan to create the Rosie the Riveter/WWII Home Front National Historical Park.
At the time, then-superintendent of NPS, Judy Hart, recalls being surprised to hear Soskin proclaim “a love-hate relationship with Rosie,” NPS wrote in an article.
Soskin said never saw herself as a “Rosie the Riveter.”
“That really is a white woman’s story,” Soskin said in a 2014 NPR interview.
Soskin told NPS that she knew first-hand the stories of women who worked in wartime industry including their experiences battling racism, segregation and discrimination.
Despite her mixed feelings on Rosie, Soskin began working with the Park Service on a grant to help tell untold stories of Black Americans and the home front during WWII, according to NPS.
The grant experience ultimately led Soskin to a temporary position with the Park Service at the age of 84.
Four years later in 2004, Soskin officially became a park ranger.
Soskin’s legacy will live on
As a ranger, Soskin continues to leave a lasting impact on those around her — being honored for her years of dedication and service.
To celebrate her birthday, the park announced it will be giving out limited edition ink and virtual stamps honoring Soskin.
“Over the past decade and a half, Ranger Betty has shared her experiences as well as the efforts and sacrifices of women from diverse backgrounds living and working on the World War II home front,” NPS said in an Instagram post honoring her birthday.
She’s already received a presidential commemorative coin from then-President Barack Obama at the 2015 National Christmas Tree Lighting ceremony. A year later, she was honored with an entry in the Congressional Record.
But her place her achievements may have their longest impact is at a Bay Area middle school renamed in her honor: The Betty Reid Soskin Middle School.
“Having a school named for me is more than I ever thought of because it means that a number of children will go into the world knowing who I was and what I was doing here,” Soskin said in an interview with KGO-TV. “Maybe it will make a difference.”
WEST LOOP — Hope you like stout because a new Guinness Taproom is coming to the city.
The taproom will open in the former Pennsylvania Railroad Terminal, 375 N. Morgan St., company officials announced this week. The West Loop location will be Guinness’ second U.S. location with plans to open on St. Patrick’s Day 2023.
Jay Sethi, chief marketing officer of parent company Diageo Beer Company, USA, called the city an “X factor” for choosing the next taproom location.
“The history of Chicago, in general, fits our values, beyond just the Irish history,” Sethi, a University of Chicago alum and Chicago native, told the Chicago Sun-Times.
Sethi also told the Sun-Times the West Loop was an ideal location given its historic architecture, trendiness and accessibility to patrons in the city as well as in the suburbs.
The brewery’s menu will rotate various food and beers, including Guinness’ famous stout imported from Dublin as well as some brews that will only be available in Chicago. A bakery will launch with the brewery, an idea that began at the other U.S. site outside Baltimore, which used their facilities to bake bread and combat food insecurity during the pandemic.
“That’s new and I think it speaks to our heart and what we hope to be: good neighbors,” Sethi said.
The taproom will also be a venue for local artists and events while also offering tours of the brewery.
“Hopefully there’s the combination of that, it’s like a place that you can go to eat … to watch a game, to hang out and to check out, hopefully, local artists,” Sethi said.
Guinness’ Baltimore-area taproom opened in 2018, the first of the company’s breweries to be based in the country since 1954.
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An outside ethics group on Wednesday filed ethics complaints against seven U.S. House lawmakers — four Democrats and three Republicans — for failing to report stock trades.
One of the members of Congress — New York Democratic Rep. Tom Suozzi — failed to file required reports on approximately 300 transactions, according to the complaint from the Campaign Legal Center (CLC).
Five of the seven lawmakers sit on the powerful House Financial Services Committee.
It’s the latest example of a bipartisan trend that has emerged almost 10 years after Congress overwhelmingly passed a law to provide transparency and show lawmakers aren’t profiting from their jobs: Members of Congress are ignoring the disclosure law.
Under the STOCK Act — “Stop Trading On Congressional Knowledge” — lawmakers must file a report when they buy or sell stock. The form, known as a periodic transaction report (PTR), must be submitted within 45 days of the transaction and is then made public. To date most allegations of STOCK Act violations involve members filing months — or in some cases more than a year — after the required window for submitting a report.
What makes the complaints filed Wednesday different is that it appears these members never filed reports at all. The CLC is asking the Office of Congressional Ethics, the outside, nonpartisan entity that screens cases and can make referrals to the House Ethics Committee, to look into these members’ activities.
CLC learned about the issues after reviewing financial disclosure forms for all members of Congress. They compared the 2019 forms with the 2020 forms and discovered discrepancies with these lawmakers’ holdings. But they did not find any PTRs to reflect the new transactions.
Group says seven lawmakers failed to disclose trades
The ethics complaints filed Wednesday are against Suozzi, Iowa Democratic Rep. Cindy Axne, Ohio Republican Rep. Warren Davidson, Texas Republican Rep. Lance Gooden, Democratic Guam Delegate Michael San Nicholas, Virginia Democratic Rep. Bobby Scott and Texas Republican Rep. Roger Williams.
“The lack of accountability we’ve seen in regard to STOCK Act compliance is basically giving elected officials the green light to buy and sell stocks based on information gained from committee meetings without any transparency for their voters,” Kedric Payne, general counsel and senior director of ethics at Campaign Legal Center, said in a written statement.
Axne, Davidson, Gooden, San Nicolas and Williams all sit on the House Financial Services Committee.
The values and number of transactions vary in the seven complaints from the CLC. According to CLC’s legal filings:
- Axne didn’t file any PTRs in 2019 and 2020 and the CLC complaint indicates that it found more than 40 assets with a total value of $43,043 to $645,000.
- The complaint against Davidson lists the sale of Workhorse Group stock worth between $50,000 and $100,000 in 2020, but notes no disclosure form was filed.
- Gooden’s annual financial disclosure reflects a dozen stocks purchases (American Airlines, APA Corporation, Royal Caribbean Cruises, Delta, Hertz, Luckin Coffee, Marathon Oil, Occidental, Ovintiv, Plains All American Pipeline, Sotherly Hotels, and United American Holdings) that were valued between $60,019 and $376,000 in 2020. But no PTRs were filed disclosing the initial investments, according to the complaint.
- San Nicholas failed to file reports for two trades, according to the complaint — one in 2019 for a call option in Yamana Gold and one in 2020 for Livent stock valued between $15,000 and $52,370.
- Scott did not disclose four stock transactions in 2020 worth between approximately $4,004 and $60,000. These were purchases for Air Products and Chemicals, Carlisle Companies, Linde plc and RPM International, according to the complaint
- Suozzi failed to disclose approximately 300 transactions from 2017 to 2020, according to the CLC complaint, with a value of $3.2 million to $11 million. This included roughly 64 transactions in 2017 valued between $456,064 and $1,868,000; 31 transactions in 2018 valued between $528,031 and $1,445,00; 104 transactions in 2019 worth $1.1 million and $3,8 million; and 104 in 2020 worth between $1.1 million and 44 million. He disclosed the trades on annual disclosures but did not file PTRs.
- Williams did not file PTRs for three stock sales in 2019. The complaint lists sales of three assets by a spouse in 2019 — General Electric, Nvidia and Walt Disney Company worth a total value of approximately $3,003 to $45,000.
NPR reached out to all seven members for a response to the complaints.
In a written statement to NPR, Gooden dismissed the complaint, saying, “There were no transactions above the reporting threshold for PTRs which is why none were filed. I would encourage anyone filing frivolous ethics complaints to consult page 41 of the 2020 Financial Disclosure Guide regarding the rule on PTRs.”
A spokesperson for Suozzi said, “The Congressman’s investments are managed through independent advisors with discretion over all transactions. Every transaction has been reported on his annual financial disclosure and all proper periodic disclosures will be filed on a going forward basis.”
The story will be updated with any additional responses.
Questions about enforcement remain
In early 2020, PTR disclosures revealed investment activity by several senators followed briefings on the pandemic — before the markets collapsed — and the emerging public health threat. The senators’ investment actions came under intense scrutiny. The Justice Department reviewed allegations of insider trading, but closed the cases without any charges.
New York Democratic Sen. Kirsten Gillibrand, who worked as an attorney before entering public office, helped write the STOCK Act. She points to the Justice Department investigations as proof the law is working.
“We’ve had several examples where members of Congress bought or sold stocks that pertain to their work, and there actually were follow-up investigations to see whether or not they bought or sold those stocks based on nonpublic inside information,” Gillibrand told NPR.
She maintains that the authority the statute gave the the Justice Department to prosecute members is the primary method to ensure the law is working. She said the ethics committees have oversight roles, “but the purpose of the STOCK Act was to make it very clear that these are criminal violations.”
Oregon Democratic Sen. Jeff Merkley voted for the 2012 law, and is blunt about how it’s working now.
“The STOCK Act is pretty much useless,” Merkley told NPR. He believes the major issue is enforcement. “It’s extremely difficult to know when a person in Congress has traded stocks because of information they heard publicly versus information that they’ve heard privately.”
Before the CLC filed its latest complaints, the group had already lodged about a half dozen other complaints to the ethics committees about possible violations of the STOCK Act.
In the Senate, the organization pressed the ethics committee in August to look into Kentucky GOP Sen. Rand Paul, who reported his wife’s purchase of pharmaceutical stock for a manufacturer of an antiviral drug over a year later. This drug was later approved to treat COVID-19. Paul noted his wife lost money on the trade and it was an oversight that the form was not filed on time.
The CLC also filed a complaint against Alabama Republican Sen. Tommy Tuberville for improperly disclosing over 100 transactions. Tuberville said he was unaware of the late reports but submitted the information. Paul noted his wife lost money on the trade and it was an oversight that the form was not filed on time.
“At least 15 members from the House and Senate have not complied with the requirement to disclose their stock trades. But we are not aware of any fines that the ethics committees have required these members to pay,” Payne said. The ethics panels can launch their own reviews. But so far no lawmaker in the House or Senate has faced any formal sanction related to the STOCK Act. And while they may get fined those fines are not made public.
Payne worries that the scrutiny following the senators’ investments after the pandemic briefing appears to have given some members pause about filing forms on time. “Right now, it seems to be a trend that members…just wait until the end of the year, file the report, and completely ignore the Stock Act. So they are circumventing this rule and doing it without any consequence.”
Instead it’s fallen to watchdog group like Payne’s or media outlets like Business Insider, to bring violations to light. Business Insider found Utah Republican Blake Moore filed late. He said that was an oversight and NPR confirmed he has paid a fine. They’ve also reported on others, including New Jersey Democratic Rep Tom Malinowski — who transferred his assets to a blind trust after he faced questions about not reporting dozens of trades. NPR learned Malinowski paid a $200 fine.
Proposal to ban lawmakers from trading stocks
Merkley thinks it’s time to ban all lawmakers from trading individual stocks altogether.
“It is a huge conflict of interest for someone to be trading in, say, pharmaceutical stocks at the same time as making policy for pharmaceutical companies,” he said. He has introduced a bill that would require members to divest within six months of taking office, and limit investments to mutual funds.
“It is not a popular topic among my colleagues,” Merkley said dryly. He be said without the change members keep themselves open to new allegations. “I can guarantee you that every year there’ll be a scandal related to stock trading.”
He has support from a couple of his Democratic colleagues in the Senate, and Gillibrand backs the change. But she also said there’s also a need for a STOCK Act 2.0, to look at all the different ways members may benefit financially from their work. One new development she flagged is that lawmakers received small business loans from the covid relief bills.
“There were several examples of members of Congress who were first in line to get those payouts. That is not what the American public would expect members of Congress to be doing,” Gillibrand said..
And she thinks transparency regarding investments need to go beyond Capitol Hill. Gillibrand has “deep concerns about the judiciary and the Supreme Court.” She noted that justices are allowed to take privately funded trips paid for by people who have interests before the court.
Congress created the STOCK Act to ensure transparency. But if nothing changes and more lawmakers keep failing to report their investments, it will be tough for the public to know whether the people they elected are making decisions to benefit their constituents, or themselves.
TAICANG, China – The one-bedroom apartment was to be Penelope Wu’s retirement home, an escape from the bustle of Shanghai – or, at least, that’s how Evergrande, the Chinese property developer, painted it. To jump in line ahead of hundreds of other prospective home buyers, Wu paid the sticker price of about $200,000 in full last year, before construction had even broken ground.
“It did strike me as weird that Evergrande wanted the cash up front. I did not know then that they were so desperate for money,” Wu says as she walks her dog outside her uncompleted building in Taicang’s Cultural City project. The mixed-development project, an hour’s drive from Shanghai, has been halted mid-construction as Evergrande scrambles to pare down its debt under orders from Chinese regulators.
Wu and the buyers of an estimated 1.4 million Evergrande units all over China are now uncertain whether the properties they paid for will ever be built.
Dozens of angry and worried investors have picketed Evergrande’s headquarters in the southern city of Shenzhen for weeks. They bought investment products from Evergrande that now look nearly worthless, as its Hong Kong-listed stock plummeted by nearly 90% percent in value this year.
Evergrande is set to default on at least one tranche of bond interest payments totaling around $120 million, due at the end of September. (It said on Wednesday it had “resolved” one payment of more than $35 million on onshore bonds but has a second payment of more than $85 million on offshore bonds coming due on Thursday.)
The embattled developer, China’s second-biggest by sale volume last year, is saddled with debt it cannot pay back: it owes a total of $368 billion in loans to banks, as well as liabilities to contractors and suppliers.
The financial woes of the once-mighty developer highlight a showdown between two competing objectives for China’s Communist Party: to force China’s private sector away from speculative and risky lending practices which pushed debt to dangerous levels — while avoiding a financial meltdown and the collapse of the property sector, in which more than 70% of the nation’s urban wealth is locked up.
“This is a part of long-term fiscal reform to de-risk, de-leverage, and to shift away from [local government] land financing. These two goals are a good thing,” says Bo Zhuang, the chief China economist at Loomis Sayles, an investment firm. “But there’s a risk of further spillover to other developers, potentially causing a banking crisis or debt crisis.”
The company has engaged in risky practices for years
For nearly three decades, Evergrande – like dozens of Chinese developers – bet big on China’s booming infrastructure buildup. It took out loans often carrying double-digit interest rates, and gambled that its sales of yet-to-be-built apartments would be high enough to service ballooning debt.
Financial regulators tolerated these risky lending practices because of how developers like Evergrande helped generate huge amounts of property wealth and as well as land sale revenues for local governments, while turning millions of citizens into homeowners.
Evergrande also embraced innovative ways to finance its ever-growing debt, selling financial products to retail investors and occasionally to its own employees. It remained solvent even as its debts multiplied. Xu Jiayin, Evergrande’s chairman, was ranked China’s richest man in 2017 as Evergrande’s stock price soared.
“Evergrande has always been able to postpone the sort of day of pain, and in the meantime, the share of nonperforming assets on the balance sheet have just got bigger and bigger, and in a sense, the problem has got bigger and bigger,” says Nigel Stevenson, a Hong Kong-based analyst at GMT Research who has tracked Evergrande for years.
This time, Evergrande’s problems look too big to ignore
In Taicang Cultural City, Evergrande’s stalled tourism and residential project, optimism prevails among some real estate agents and home buyers that the developer will once again secure enough last-minute financing or receive an extension on outstanding loans to continue operating.
“Evergrande is too big to fail,” says Mao Kai, a Taicang real estate agent.
Wu, the home buyer, trusts the municipal government will step in to bail out Evergrande’s local projects, or at least make sure the developer finishes building the homes it has already sold.
“There is just too much money and too many houses on the line to let a firm the size of Evergrande go belly-up. A bankruptcy would create too many social problems,” she says.
But this time around, Evergrande’s problems may be too big to ignore. The Chinese state has strongly indicated it will no longer allow developers like Evergrande to take out loans it cannot pay back and sell investment apartments no one needs just to raise housing prices.
Policy makers have also signaled that they will push local governments to reduce their financial dependence on selling land for revenue — one of the key drivers behind China’s property boom.
An economic slowdown brought on by the COVID pandemic was already dragging down property purchases. Then, last summer, new government policies to curb speculative investments restricted the number of homes people could purchase. These rules took some buyers by surprise.
“We only learned of the new limits after my mother had already signed a contract with Evergrande. If the company knew of the rules at the time, why did they have us pay for the apartment?” says one Shanghai resident whose mother bought a unit in Evergrande’s Taicang project while already owning a second home in the city. Her purchase is illegal under the new rules, which is why the resident asked that NPR not use his name. He is now trying to claw back his mother’s down payment.
A day of reckoning?
Last year, Beijing also implemented its “Three Red Lines” policy, the number referring to strict caps placed on the ratio of debt a property developer can hold in relation to its assets, equity and cash on hand.
Under this combination of new rules, Evergrande could not sell enough apartments fast enough to pay back its debts at the pace mandated by regulators.
“It does now look as though the day of reckoning is sort of fast approaching,” says GMT’s Stevenson.
One question is whether pushing Evergrande to shape up may actually destabilize the whole Chinese banking system. Buyers are so spooked over Evergrande that other developers are now seeing falling property sales and plunging stock prices, potentially setting off more property defaults in China. Global stock markets have been roiling from the uncertainty as well. This month, the Dow Jones Industrial had its worst performance since July and the S&P 500 and NASDAQ were at their lowest since May.
“Household confidence in buying new property is deteriorating really fast,” says Zhuang at Loomis Sayles.
The fallout is already apparent
Government regulators are now trying to find other companies who can buy out Evergrande and its assets before its woes spread. But they are running out of time to contain the potential economic fallout.
That is because Evergrande does not only owe loans to banks. It also has unpaid bills totaling about $300 billion owed to contractors and suppliers — who are now also facing economic hardship.
One of these contractors is construction company Jiangsu Nantong Sanjian, which was supposed to finish Evergrande’s Taicang project, in addition to dozens of others across the country.
“The last two days have been filled with endless fights with the police and with desperate home buyers. Evergrande has no money to pay us back, so we are also fighting with renovators and other contractors we hired,” says Sheng Weixin, a manager at Jiangsu Nantong Sanjian.
Ashen-faced with worry, he sits alone at his desk in the middle of an empty construction lot in Taicang, trying to figure out his own future. He sent all his employees, many of them migrant workers, home in August because he could no longer afford to pay them.
“What do we do about all our workers, the people of the countryside? We still owe them three months of salary,” says Sheng.
He points out the concrete and steel skeletons of almost a dozen unfinished Evergrande projects nearby — one of which another developer agreed to take over in July, only to to face debt issues itself.
Lacking a payout from Evergrande or a state bailout, Sheng predicts his own company will likely go bankrupt in a few months. “This,” he says, “is no laughing matter.”