What would it look like, amid rising expectations of an Evergrande standard?

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ImageA map showing China Evergrande's development projects across the country on Tuesday at a business development in Beijing.
Credit…Andy Wong/Associated Press

Shares of China Evergrande, the troubled real estate giant whose fate has contributed to jitters in global markets, fell again on Tuesday amid a fresh forecast that it would soon default.

The company’s chairman, Xu Jiayin, told employees in a letter quoted in Chinese media that Evergrande would overcome its problems, including $300 billion in debt, plummeting apartment sales and a payment due Thursday.

“I firmly believe that Evergrande will come out of its darkest moment and resume work and production at full speed,” he said in the letter, which was confirmed by a company spokesperson.

But Tuesday came a bleak prediction about the company’s fate for investors in Asia, this one from S&P Global Ratings. “We believe Beijing would only be forced to intervene if there is a far-reaching contagion that causes multiple major developers to fail and pose systemic risks to the economy,” the report, dated Monday, said.

Both the company’s stock and bonds fell on Tuesday, albeit by more modest amounts than in recent days and weeks. Shares closed 0.4 percent lower and shares of other China-focused real estate developers that plummeted Monday have recouped some of their losses. Hong Kong’s Hang Seng index, which fell 3.3 percent on Monday, closed the day with a 0.5 percent gain.

The impact of an Evergrande collapse would largely depend on the attitude of top Chinese leaders.

Many of Evergrande’s problems stem from new restrictions on home sales as Beijing tries to tame real estate prices and allay growing concerns about home prices. The government has also tried to teach a lesson to property developers who have borrowed heavily in recent years to build more real estate and fund their investments in other businesses. (In Evergrande’s case, those are interests such as electric cars and a soccer team.)

But a hard landing for Evergrande, should it default, comes with risks. Unhappy home buyers and suppliers can create unrest, while the financial consequences for investors and others who may be exposed to Evergrande can be costly.

However, Beijing has a number of ways to try and stop a financial disaster. The government controls the banks and the financial links between them. It also tightly controls the flow of funds across national borders, allowing it to stop a potential flow of funds outside the country.

“The officials still have a number of tools at their disposal to calm the panic,” said Zhiwu Chen, a professor of finance at the University of Hong Kong who predicted authorities would break up the company and disassemble the parts piecemeal. to sell.

The authorities can also control media coverage, while the police have considerable powers to arrest anyone who makes a public outcry.

Credit…Audra Melton for The New York Times

Two years after a brutal pandemic, the global economy remains awash with logistical problems. Factories in Asia are struggling to meet the demand for their products. Ports are short of sea containers and healthy hands to unload them. Trucks stand still for lack of drivers, with warehouses overrun with goods.

And ongoing disruption to factory production and bottlenecks in shipping is leaving nonprofits short of goods for vulnerable communities around the world, reports Peter S. Goodman for The New York Times.

In Haiti, one of the world’s poorest countries, an attempt to increase household income encounters a new problem stemming from the upheaval: a shortage of shoes.

The Haitian-American Caucus, a non-profit organization, imports donated, used shoes from the United States and sells them at low cost to women who hunt them on sidewalks and markets, earning crucial money for their families.

The caucus distributes nearly 100,000 pairs of shoes a month, but it could manage four times that much if only more inventory arrived, said its executive director, Samuel Darguin.

“That pair of shoes represents so much more,” he said. “It represents a mother who can send a child to school, pay for health care and perhaps feed her family two meals a day instead of one.”

Erin Griffith (@eringriffith) and Erin Woo (@erinkwoo), two of our tech reporters, cover the trial of Elizabeth Holmes, who dropped out of Stanford University at age 19 to create blood-testing startup Theranos and built it to a valuation of $9 billion and herself made the world’s youngest self-female billionaire – only to burst into disgrace after it was revealed that Theranos’ technology had problems.

Follow here or on Twitter as she is tried on 12 counts of wire fraud and conspiracy to commit wire fraud. The trial usually takes place on Tuesdays, Wednesdays and Fridays.

Main photo of Erin Woo

36 minutes ago

Erin Woo

With that, Judge Davila ends Gangakhedkar’s testimony for today and instructs the jurors not to consume media content about the trial, as always. The trial resumes Tuesday – Erin Griffith will be at the courthouse bringing you live updates.

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38 minutes ago

Erin Woo

We’re doing a cross-examination right now. Holmes’ lawyer questions her about GSK’s investigation into Theranos’ testing, pointing out that the investigation promoted her work. “The Theranos system eliminates the need for a lab and provides quality data,” the GSK memo said.

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58 minutes ago

Erin Woo

Despite signing an NDA, Gangakhedkar printed out some documents and took them home when she left Theranos. “I was afraid I would be blamed,” she testified.

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1 hour ago

Erin Woo

Three days after Balwani’s email, Gangakhedkar sent Holmes her resignation email. She testified that she was “very stressed and unhappy and concerned” about the planning of the Walgreens launch.

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1 hour ago

Erin Woo

In an email from Balwani to Gangakhedkar, copied with Holmes, Balwani said the software team had been working until 3:07 a.m. but the Edison blood-testing devices Gangakhedkar’s team was working on “were all inactive.” This was an example of the pressure they were under, Gangakhedkar said.

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3 hours ago

Erin Woo

And with that, Cheung was fired. The government is now calling Surekha Gangakhedkar, a former Theranos team manager.

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3 hours ago

Erin Woo

The government is now questioning a document stating, among other things, that Theranos’ devices “can be operated with minimal training” and that the results “have precision and accuracy on par with traditional clinical laboratory analysers”. Neither is true, Cheung says.

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4 hours ago

Erin Woo

Cheung said they had to constantly recalibrate the machines, which resulted in results taking 2-3 days instead of the promised few hours. “We had people sleeping in the car because it was taking too long,” she said.

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4 hours ago

Erin Woo

Cheung just said that in November 2013, she “started to worry about a month” about the vitamin D samples. She was concerned about the performance of the tests and that they were being used on patient samples.

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4 hours ago

Erin Woo

Defense is cross-examined after showing Cheung Theranos’s policy documents that she said she had never seen before. The government is now again asking for referrals.

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5 hours ago

Erin Woo

Holmes’ attorney asks Cheung many questions about quality checks that took place on the Theranos devices. “There is an acknowledgment that some mistakes would happen and this was the policy to deal with those mistakes,” he said.

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5 hours ago

Erin Woo

Erika Cheung now takes the stand as the cross-examination continues.

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6 hours ago

Erin Woo

The update you’ve all been waiting for: The judge STILL pronounces it.

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6 hours ago

Erin Woo

Now in the courthouse for another day of the Elizabeth Holmes trial. We expect to conclude today the testimony of Erika Cheung, one of the key whistleblowers in the case.

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1 day ago

Erin Griffith

That’s it for today.🩸💉⚖️

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1 day ago

Erin Griffith

So far, the theme of Cheung’s cross-examination seems to use agonizingly arcane details about the Theranos lab’s processes and procedures to show that the work was very complicated, involving many smart, purebreds.

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2 days ago

Erin Griffith

Cheung testified that during quality control failure meetings, Theranos lab directors ignored the most obvious possible reason for the failures: “The Edison devices didn’t work.”

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2 days ago

Erin Griffith

Trial equipment warning: A reporter brought his own binoculars to see the exhibits on the TV screens.

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2 days ago

Erin Griffith

Erika Cheung is back in the stands. She described Theranos’ practice of demonstrating blood tests for VIPs, with some results coming from Theranos machines and others from Siemens analyzers.

Headshot by Erin Griffith

2 days ago

Erin Griffith

At this point, we’ve heard lawyers and witnesses pronounce “Theranos” hundreds of times, which made me wonder if the judge is trying to mess with us by sticking to his “ther-AHHHHH-nos” ruling.

Headshot by Erin Griffith

2 days ago

Erin Griffith

I have to notice the woman who clapped and shouted, “You’re a good mother!” Holmes suddenly stormed out of the courtroom yesterday after Judge Davila warned everyone that shouting such things in front of jurors could cause a mistrial. I don’t see her here today!

Headshot by Erin Griffith

2 days ago

Erin Griffith

The entourage of Elizabeth Holmes today consists only of her mother.


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