Stocks - Softbank is Next

Idea for Softbank:
- Evergrande's temporary suspension has it out of sight and out of mind, but it is expected to default on the 18th. How soon they forget. The corporate bond market collapse is not localized, but instead is spreading:

- We have reached the end of a Yen Carry Trade Cycle:

- Japan is #1 in the world in debt, boasting a Debt-To-GDP of 266% ($13T). It would make sense for their debt bust to occur first. Japan is next on the chopping block.
- "SoftBank Group Corp 9984.T has built a global conglomerate of telecoms and tech companies on an ever-growing mountain of debt that major rating agencies categorize as junk." - Reuters
- SoftBank also owns the Vision Fund, the largest tech fund in the world, with great exposure to US tech. Its collapse will be felt around the world.

GLHF
- DPT

评论:

A nice example is that Softbank (with a Mcap of $90Bn) once owned 26% of Alibaba, which now has suffered greater than a 50% drop from its highs. Softbank had a large (dollar) margin loan based on Alibaba shares as collateral.

As credit risk rises, the quality of collateral in the debt market will be called into question, which is why the dollar will have increasing demand as debt bubbles pop around the world.