Exposing China's Mysterious Multi-Trillion Shadow Banking System

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Tue, 07/19/2011 - 19:46 | 1472343 blindman
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i say holy fuck and haven't but read the title.

Tue, 07/19/2011 - 20:05 | 1472381 Mr Lennon Hendrix
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China's Mysterious Multi-Trillion Shadow Banking System....bitchez!!!
Tue, 07/19/2011 - 20:35 | 1472464 Michael
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Does this mean China's 64 million empry vacant properties in inventory may become a problem?

Tue, 07/19/2011 - 22:59 | 1472788 Spitzer
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Read it, the title is misleading.

Its not that big of deal, seriously

Wed, 07/20/2011 - 05:14 | 1473020 Michael
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I think it's all because of the Ron Paul movement rebellion going on.

They used to call it The Ron Paul Revolution.

The goddamn Tea Party is threatening to filibuster with DeMint and Paul junior tag teaming to Filibuster, and the Senate knows there isn't a goddamn thing they can do about it.

Obama and the republicrats are going to throw them a bone to shut them up or everyone important gets nothing. NOTHING!

Tue, 07/19/2011 - 20:47 | 1472493 IQ 145
IQ 145's picture

 I like the quote in heavy print very much; because, it could be applied without change to the US. The un-supervised shadow banking operations in the US contributed significantly to the instability and the size and urgency of the corrective necessary when a fiscal crisis occured.

Tue, 07/19/2011 - 23:05 | 1472795 trav7777
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why is it everyone points out the rampant fraud and bad loan problem in China, that you guys invariably say OH WELL THE US!!!!!

I mean, wtf, there's plenty of time to bash the fuckin US on all the other threads about the US banking system.  This article was about China's banking system which is even MORE chockfull of fraud and junk paper than the US's

Wed, 07/20/2011 - 03:12 | 1473016 Yen Cross
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  That was a pretty decent point trav.   I suggest you study the opening of the PBoC bond market before you comment further.  +1 buy ( sp. intended) the way.   Yen

Wed, 07/20/2011 - 04:19 | 1473043 magpie
magpie's picture

i also enjoy the epic battle between price control and printing press.

Wed, 07/20/2011 - 04:27 | 1473046 Yen Cross
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  You really mean {JUSTIFICATION} for more Debt Monetization!

Wed, 07/20/2011 - 04:34 | 1473049 Yen Cross
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 These flippid d-double posts are odd.?

Wed, 07/20/2011 - 11:41 | 1473922 topshelfstuff
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""""why is it everyone points out the rampant fraud and bad loan problem in China, that you guys invariably say OH WELL THE US!!!!! """

many reasons: not much Trust in our so-called MSNews, typical to distract, typical to point first to another and accuse them of doing what you're doing. The post above yours, by IQ is suggesting the ol' "Pot calling the Kettle Black", here:

""" it could be applied without change to the US.""""

and I've seen this many times in an article where you could think it Fits the US

its been pretty standard now, and in the past approx. year, to point to China, and accuse them of being the cause of global problems

Its also kept out of our news how China. most all of Asia, and Latin America, has been Raising Wages by over 10% Yearly, keeping their People well ahead of Real Inflation. You can google each country and be astounded, though not a Peep about this here. Its also important to understand PPP Purchasing Power Parity. We only think of the Average Chinese Worker as a low-paid employee, yet these same People have a Savings Rate near 50%, so obviously we're shown a false "Picture"

Tue, 07/19/2011 - 21:19 | 1472571 blindman
blindman's picture

and now i have read the phrase
"unstable equilibrium".
this makes me feel slightly better
but still uneasy, such is life.
i live to be junked, work it.
stability, equilibrium, china, economics,
fraud, fiat, money, capitalism, communism,
command and control top down rule of law
acting as a person imitating a human being
for fun and profit, representative theft
and regulatory insolvency.
now what? don't just junk, learn to swear.
you can do it!!

Tue, 07/19/2011 - 19:53 | 1472361 Lord Welligton
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And the reason anyone should give a shite is what exactly?

Tue, 07/19/2011 - 20:21 | 1472434 Atomizer
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Don't bore us with your stupidity. Wealth was transferred from Britain to US. The next stage is to transfer wealth to China. Empires are bubbles in the eyes of Central Banking.


Tue, 07/19/2011 - 20:41 | 1472479 Lord Welligton
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Don't bore us with your stupidity

I'm far from stupid.

I'll ask you directly.

Why should anybody give a shite?

Tue, 07/19/2011 - 20:48 | 1472497 IQ 145
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 Who or what is Lord Welligton?

Tue, 07/19/2011 - 20:52 | 1472509 IQ 145
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Apparently, according to Google; Lord Welligton is someone who posts ignorant shite on blogs.

Wed, 07/20/2011 - 00:09 | 1472879 Vic Vinegar
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And according to Zero Hedge you are a douche who expresses his insecurities via his userid.

Wed, 07/20/2011 - 00:34 | 1472915 Vic Vinegar
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And before I log off (I love this site but do have better things to do now and then): what the fuck is with your misuse of the semicolon?  You are becoming a joke on this site, if you weren't already one.

Wed, 07/20/2011 - 03:35 | 1473022 ZeroPower
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Cool story bro

Wed, 07/20/2011 - 03:08 | 1473013 Yen Cross
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IQ 1.45 let's take some (Requiem) into account... You aren't dealing with Glass ceiling IVY huggers here. (dot)    yen...

Tue, 07/19/2011 - 20:33 | 1472453 Gohn Galt
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Why are you getting junked?  I love that old clip. 

Tyler I like hearing these perspectives.  I was sure the shadow banking system was much worse than that.  Definetly bullish.

This post was supposed to go as a response under Atomizer 1472371.  Would someone be so kind as let me know how I can delete or move a post?

Tue, 07/19/2011 - 23:56 | 1472868 Vlad Tepid
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Edit and erase your text and repost.  Your blank text box will stand as a testament for all time to your (now immortal) flub.

Tue, 07/19/2011 - 19:58 | 1472371 Atomizer
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How Obama will figure your taxes by Progressive Math


IMF learns of new phone hack, 'Gang of Six' regroups.

Tue, 07/19/2011 - 20:11 | 1472402 S-hai High
S-hai High's picture

Interesting article - certainly true there are some hurdles that China needs to overcome. But, even the article states that China's problem is not even a dot relative to the U.S problem. The fact that China also consistently runs a trade surplus and has huge FX reserves will cushion what would otherwise be a painful lesson.

"Yet investors are often not properly informed of the risks they are exposing themselves to. If losses occur on a large scale, it could quickly ignite social discontent in the currently delicate environment"

Since over 95% of chinese really have no money and are happy to have a house and food, the number of people investing in such structures is absolutely tiny. It will hardly spark social discontent... rising prices for staple foods on the other hand...


Tue, 07/19/2011 - 23:09 | 1472799 trav7777
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the article doesn't say that at ALL.  In fact, if you do ANY research into China you see that their problem DWARFS the US's.

WTF is with you people that you INSIST on bashing the USA for everything?  The Chinese are not fucking special; they are running a goddamned PONZI just like we are!

Wed, 07/20/2011 - 16:19 | 1475007 Herd Redirectio...
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China has FX reserves??? Is he counting their US Treasuries at par, and thinks they are going to be worth anything 5 years from now?

As the saying goes, if I owe the bank $1million dollars, I have a problem.  If I owe the bank $1 billion dollars, the bank has a problem.  Thats what has happened with China.  They have lent so much to America that they stand to lose the most, by selling their Treasuries, holding them, or adding to their position!

Tue, 07/19/2011 - 20:19 | 1472419 carbonmutant
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There is no doubt that the numbers are higher than reported BUT,

We're talking RMB here, not Dollars...

Tue, 07/19/2011 - 20:24 | 1472440 chump666
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China is an epic bubble which has a pending liquidity crisis mixed with inflation driven gray/black money + oil inflation =   Total disaster. Just hard to time the implosion.

The Apple 400 share hysteria is being underwritten by the CB cartels rhetoric mania.  Like the white knight (China) intervention, but it's good for like 48hrs...Then its sell again.

Tue, 07/19/2011 - 20:31 | 1472456 Justaman
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What do you expect?  The Chinese learned from the biggest ponzi/shadow/insolvent banking system in the world!  The Chinese won't last as long as the ultimate fraudulent system, though.  


Tue, 07/19/2011 - 20:32 | 1472458 jo6pac
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So this means what? They're as fucked up as Amerika? I wonder if employee of the yr in China as in Greece is a gs person?

Tue, 07/19/2011 - 21:27 | 1472586 gwar5
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We're all PIIGS.  Pigs get slaughtered.

Tue, 07/19/2011 - 21:30 | 1472593 max2205
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What if BK posted and no one commented

Tue, 07/19/2011 - 21:50 | 1472641 Atomizer
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Murdoch is being removed just as DSK was. Those special people (told you about), hiding in foliage will be springing out to protect the fraudulent system. Enjoy the comedy.

Wed, 07/20/2011 - 05:23 | 1473068 falak pema
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Just on a lighter note read a history novel about the great big shooting match called the crusades; it will relax your jangled nerves and tell you how feudal lords settled their problems in the good ole days.

I am getting very ponzi myself as I wrote it. So hats off from a new Madoff in the making!




Tue, 07/19/2011 - 22:36 | 1472666 blindman
Tue, 07/19/2011 - 22:07 | 1472677 Itsalie
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"Therefore, if the PBoC continues to keep a firm hand on credit growth, the Chinese economy could run into a systemic crunch."

translated into layman lanuage:

"Print, PBoC, Print". Maybe less of such garbage from the bank who famously proclaimed "PIGS CAN FLY".

Tue, 07/19/2011 - 22:10 | 1472681 Man Bear Pig
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is there a link to the report?

Tue, 07/19/2011 - 22:31 | 1472726 chump666
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Just saw a wire report on Roubini AUD fair value crapola...China bull?  Jeez Keynesian's still follow that Newton-ism determinism that chaos theory decimated 50yrs ago.  Meaning.  Shit happens internally then explodes externally...that's China baby



Tue, 07/19/2011 - 22:40 | 1472744 fraud-fed
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How's that supposed to make us feel better, if we are already more than knee-deep?

Tue, 07/19/2011 - 23:05 | 1472737 kito
kito's picture

i second jim rogers on china. 

Tue, 07/19/2011 - 23:18 | 1472813 PulauHantu29
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In most of the larger cities the median house price is more then sixteen times the median income. The rule of thumb is more then 3x is unstable.

The coming year will be fascinating. My bet is their RE will "correct." Watch one of the tulloch interviews...he is a HK specialist on HK and China RE...


Wed, 07/20/2011 - 00:24 | 1472904 chump666
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yeah most traders should watch HK property, that goes first should spill over into China.  Tulloch is good, as is Faber re: HK property

Wed, 07/20/2011 - 11:09 | 1473763 qussl3
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May pay to watch private property in singapore, volumes have collapsed yet prices continue to creep up, agents report all cash buyers from china holding it up.

WSeems like the marginal money has been driven there.

Wed, 07/20/2011 - 03:51 | 1473030 Yen Cross
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  IQ 1.45 is a Sorite, with absolutely no concept of a YIELD CURVE!!!

Wed, 07/20/2011 - 03:54 | 1473032 steveo
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Euro dies First

I love things going down, of course that means something else is going up.

This Euro chart is amazing.


Wed, 07/20/2011 - 04:24 | 1473044 Yen Cross
Yen Cross's picture

  yes it is.  Trade smalls, or you will end up in the deep weeds. that is ,(unless) you know how to cloud trade?

Wed, 07/20/2011 - 03:57 | 1473035 steveo
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Euro dies First

I love things going down, of course that means something else is going up.

This Euro chart is amazing.


Wed, 07/20/2011 - 07:10 | 1473116 Silver Dreamer
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It's not a problem.  If they run into economic problems, they can just send their army in to plunder.  Maybe China can find their own Libya, which was sitting on a horde of gold last time I checked.  Hmmm, I wonder how much gold Japan and Taiwan have...

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