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A Chinese Bank Run?

Tyler Durden's picture




 

The balance sheet recession that seems to have correctly diagnosed the problem facing Japan (and now Europe and the US)  - explicitly causing debt minimzation as opposed to profit maximization - seems to be taking hold. However, it appears this death-knell for credit-created growth is now being seen in China - as AlsoSprachAnalyst interprets "people are not borrowing, but selling assets to pay down debts, and/or holding cash". What is most worrisome is that while the focus of the world has been on European bank runs (for fear of bank failure and redenomination risk), 21st Century Business Herald now notes that these bank runs have spread to China's industrial and construction-heavy city of Wuyishan. Queues were seen on various branches of China Construction Bank, Agricultural Bank of China, and Industrial and Commercial Bank of China.

 

more from AlsoSprachAnalyst:

The reason which triggered the bank run was that there was a company that has just gone bust, with the founder and other executives ran away, brining probably RMB1 billion or more away with them.  The company in question looks like a Ponzi scheme.  It has set up an online shopping site which, on top of selling stuff, asks people to sign up and pay a certain among of money (e.g. RMB1,600), then the company will pay people back at a rate of RMB20 a day (a fee of 5% out of this RMB20 is deducted).  It sounds like a pretty good deal for the members, as far as it is working.  Based on the bank statement of the members obtained by 21st Century Business Herald, the company did pay back quite a fair amount, but, of course, the company has sucked up more than it has ever had a chance to pay back.

 

As the company went bust and the boss disappeared, the members of the website who have paid quite a lot of money in hope to be paid back even more became rather angry, and went to the office of this company in Fuzhou (which is actually not at all near Wuyishan) to protest and smash things.  However, as a lot of members of the website came from Wuyishan, people are worried.  On late 30 May, there was apparently some chatter that the government is dealing with the case, and will need to freeze personal bank accounts (presumably for investigations).  As a result of this, people started queuing up at virtually all banks the next day.  One local resident told the reporter that the city “has gone crazy”.

 

Now the boss is arrested, charged with taking deposits from the public illegally.  But victims of the scheme are still counting, and the exact count of the victims of the scheme is not known.  What is known is that because the website was so popular all over, the victims of this scheme will not be limited to one city of Wuyishan.

and from 21st Century Business Herald (via Google Translate):

Empty.

 

May 31, the edge of the Fuzhou West, Fauci Lake Garden north-floor six-story is a mess, the whole layer of the huge office space only a few grid, ceiling air-conditioning, including all items have been looted. about 300 square meters of space can be seen everywhere damaged ceiling and scraps of paper waste, and even the Office of the Chairman of the glass door was smashed.

 

"In the middle of the night on the 28th, happened here the mob looting took indoor items is a member of the full mall, an angry crowd smashed the decoration." Fauci Lake Garden security told this reporter.

 

This is where many members had placed 100% of fortune dream mall stronghold. This reporter saw a full-affected member notice pasted on its door bearing the words: you full members and the victims go to Fuzhou Economic Investigation Team focus, and discuss funeral.

 

"Full mall claimed more than 20 million members, covering 23 provinces and cities." Member surnamed Chen, told this reporter, "the causes of things heard the full mall owners Yao Jianqing and senior have escaped more than 10 billion Pao Lu. "

 

On the evening of May 31, the reporter learned from the Fuzhou police, Yao Jianqing was the same day was five brigade of the Fuzhou Public Security Bureau of Economic Investigation Detachment from the field and arrested and brought to the suspected charges of illegal deposits from the public, within a short time the police have registered the cheated amount of tens of millions million.

 

Involved in this case the number and amount, is still the legend diverse. Since the filing due May 29, made a report people are doing it, has not yet specific statistics on the amount involved and the victim number.

 

May 28 night in Fuzhou, looting, and has rapidly spread to northern Fujian Wuyishan City.

 

The Wuyishan banks a run

 

Hundred percent rebate comes from Fuzhou mall collapse event, but soon make waves in Wuyishan City, 356 kilometers away.

 

"In the evening of May 30, there are rumors that the relevant state departments to rectify rebate network, it may freeze the personal bank account." Number of Wuyishan local residents confirmed to this reporter, "so people flocked to the bank teller, 31 withdrawals crowd formed the climax, are overcrowded urban areas, Construction Bank, Agricultural Bank of China, ICBC even Wuyi University, backdoor teller machines. "

 

"Wuyishan public Ma told the reporter, the evening of May 31, downstairs are loud call notification queue to take money out noise, thunder kept the motorcycle on the streets," Wuyishan crazy, "she said, her husband is 100% rebate mall members.

 

"Rebate network the country's most active areas of Wuyishan." A local source revealed to him every day to listen to friends and colleagues talk about rebate network, earn money to buy a car also. March to April this year, most people throw money to rebate network, buy tens of thousands of people, or even hundreds of thousands of millions to buy. "

 

Many local people said hundred percent rebate mall development in the Wuyi mountains of many shops and became an "investment" for quick profits, and slowly evolved over time and some people operating mode, to attract more to the more ordinary citizens to join.

 

The reporter learned from multiple sources, Following the Wuyishan whole city crazy, Jian'ou, Shaowu, Shunchang, Pucheng counties belong to northern Fujian, a variety of names, "Money begets money" rebate "riches" game the same hot.

 

But because of a sudden the same thing, and increasing number of withdrawals and report the number of people involved and the amount of these places is also not specific statistics.

 

"Money begets money" riches game

 

In, Fauci Lake Garden looting has been the passage of time, but until the afternoon of May 31, not when someone thirty-five together to come here to find out the full rebate mall situation.

 

While in front of a piece of paper "announcement", said the arrears of rent, the landlord has the right to use recovery.

 

Property of the building told reporters the full rebate Mall to move into here at the end of the original tenants of the housing Yao Yuan, Fujian Jianou.

 

The reporter learned that operate 100% rebate Mall enterprise Fuzhou Yi Health Science and Technology Development Co., Ltd. (hereinafter referred to Yi Johnson).

 

Trade and Industry data show that Yi Health was founded on December 23, 2011, 10 million yuan of registered capital, is the software industry, business scope is very heterogeneous, including daily necessities, building materials, dozens of industries. The legal representative of the company for the original Yao Jianqing, March 31 and May 24 this year has changed to Feng tour wang, Weiping. The shareholders have also gone through two changes the Yao Jianqing, how to spend months changed to swim Wang, Feng, Fan Baoyu, and then change Weiping Gao and Ke Qimin.

 

The reporters found that the friendship born on December 25 last year, the Company changed to its present name by the the Jian'ou full E-Commerce Co., Ltd. ", founder of Yao Jianqing Department of Fujian Jian'ou, aged 39.

 

May 7 to 8, Yi Johnson was held in Fuzhou West Lake Hotel a national dealer meeting, a member of more than 500 from all 23 provinces and cities, agents, distributors attended the meeting. A percentage rebate mall dealers said.

 

According to its disclosure, in the so-called National Dealer Meeting

 

Publicity, only the 8th to the 14th week of May, Yi Johnson absorption member of several hundred million of funds. The same month on the 14th, the old site of the "100 per cent rebate of friendship Johnson Close, 18, named the" 100 per cent Mall new website, suction gold numerous two-day promotional activities.

 

The reporter learned from more than members mouth, Yao Jianqing began in May 2011 through the network of shopping malls full, to receive a 5% fee the way development agents and franchisees, and to absorb the member funds, commitment to 100 days back to this, net profit in 400 days of high returns, "Money begets money" profit mode.

 

The Fujian rebates network collapse scam involving 23 provinces and cities

 

The initial approach, Member Shopping 1 million in the franchisee, to pay 1600 yuan Yi Johnson, Yi & Johnson $ 20 per day rebate to members, for a total rebate of 500 days. With a membership of more and more, later converted to 1600 dollars you can get $ 20 per day rebate paid directly to the friendship Johnson, Yi Johnson received from members daily 20 yuan rebates 5% fee.

 

Yi Health want only take the model of development of the regional agency "offline" to grow the membership team. "Agents of the initial fee is $ 10,000, and promotional activities during the price is 5000 yuan, Fujian Province, one agent said. According to the odd members, full mall agents to join more than 6000 in the country.

 

The reporter May 31 the bank bills and customer information display, Yi Johnson call the members of the rebate a few hundred to several thousand dollars, the amount of remittance Join majority for a few thousand to several million .

 

More involved in the amount of Fuzhou, Fuqing City, under the jurisdiction of, a few people together tens of millions of dollars. "A member said," after the outbreak of the fuse is also a few people be informed of the change of friendship born shareholders. force new legal representative Weiping return of investment funds, resulting in the collapse of 100% rebate Mall. "

Not good, not good at all.

 

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Fri, 06/01/2012 - 15:30 | 2485519 kato
kato's picture

Realize that the vast majority of you who post here repeatedly are one step removed from the citizens of Rock Ridge. Or worse. Still, you are useful in increasing ZH’s page view count. Now back to your Bud Light and Axe body wash for the week-end.

Fri, 06/01/2012 - 15:33 | 2485535 fonzannoon
fonzannoon's picture

Is that you Brian Wesbury?

Fri, 06/01/2012 - 15:41 | 2485577 Colombian Gringo
Colombian Gringo's picture

What do you call a Chinese 69?
Two Can Chew!

Fri, 06/01/2012 - 15:43 | 2485584 kralizec
kralizec's picture

phuc mei, dat rotsa raughs!

Fri, 06/01/2012 - 17:20 | 2486036 AldousHuxley
AldousHuxley's picture

Chinese will push FXI down to $30 at EMA....

 

then QE will come from Chinese banks

Sat, 06/02/2012 - 01:43 | 2486834 Oh regional Indian
Oh regional Indian's picture

I wrote this in May 2008:

v China is staggering under its own curious set of circumstances of a large population set “herded” into rapid “development” mode, much like India.  Most of the “gains” are hype. Credit, cheap and plenty until recently (private equity had moved it into the right hands in preceding years), being the sole driver (flogger?) of growth.

 

v The sub prime mess (and all its attendant tentacles of cause and effect in the world financial systems) is scary with just the lit fuse sparking.  When it really goes off, all bets are off.  Talk of lack of understanding of higher order cause and effect.

v Energy prices are reset in the public mind at dizzying rate (12 dollars a barrel of Brent Sweet Crude is not such old memory), currently 130 dollars a barrel.  Associated inflationary impact is hitting the majority of the world’s population.

 

v On a similar somber note, a discussion on our world’s geo political situation. Every major war in history was a resource war as is every major conflict today. There is a relentlessly hawkish bias in the global dialogue, with too many vested interests in the war – pie.  Oil, minerals, territory / markets and now water. Also, in large theatre wars, multi-generational trauma creates multi-generational conflicts.  Grim but true.

 

v An increasingly nuclear world adds the requisite potential for a runaway reaction!  Our world is ever increasingly polarized with ever greater potential for conflict.

1460-days-ago-ensign-principles-world-view/

Some of us saw it coming..... long ago. That was when I verifiably put it on paper. Have been saying it since 2006.

ori

Sat, 06/02/2012 - 11:37 | 2487205 dracos_ghost
dracos_ghost's picture

then QE will come from Chinese banks

 

Yeah, from the direct line to the US Treasury recently announced. China has a liquidity problem like everyone else. Their peg is killing them. It's a great mercantilist weapon when money is flowing like Big Gulps in Manhatten but they need to float the yuan immediately. It's a "take some bad medicine now" or life support not much later decision.

It seems the Chinese gubmint would rather avoid social unrest at all costs instead of fiscal responsibility. They have become fully westernized.

Fri, 06/01/2012 - 15:44 | 2485590 montana1978
montana1978's picture

I find your comment to be totally unacceptable!

 

-John
Brand New (Non-Titled) 2013 Ford Mustang Shelby Cobra 2 Door Convertible
http://cgi.ebay.com/ebaymotors/?cmd=ViewItem&_trksid=p3984.m1555.l2649&item=190685701637&sspagename=STRK%3AMESELX%3AIT

Fri, 06/01/2012 - 15:47 | 2485602 Colombian Gringo
Colombian Gringo's picture

This Chinese chap goes into a bank to change some currency. After receiving his money he asks, "How come I came in here with same amount of money as yesterday but today I get less Yuans in return?"
The banker says, "Fluctuations."
The Chinese guy replies, "Fluck you Blitish too."

Fri, 06/01/2012 - 15:56 | 2485637 in4mayshun
in4mayshun's picture

Global Bank runs... all part of the plan. Now the world governments can unveil an all-electronic currency and blame it on the people for hoarding physical currency.

Assheads.

Fri, 06/01/2012 - 16:09 | 2485681 Poetic injustice
Poetic injustice's picture

Is AnAnonymous standing in bank queue already and so missing this topic?

Fri, 06/01/2012 - 16:20 | 2485738 Ms. Erable
Ms. Erable's picture

Naw, he's practicing his roadside-shitting skills as part of his Chinese Citizenism training.

Fri, 06/01/2012 - 17:41 | 2486095 DosZap
DosZap's picture

Global Bank runs... all part of the plan. Now the world governments can unveil an all-electronic currency and blame it on the people for hoarding physical currency.

If that happens, gonna be a lot of smelting, and new jewelry being worn.............and multiple boating accidents.

ZH folks need to stay off boats, bitchezz cannot operate boats,esp with their stashes on board.

Reality, I do not see that yet,too many folks demand tangible money, and not all have or use banks...............and never will.

And, backed by full lack of faith in the uber successful Soverigns?

Fri, 06/01/2012 - 23:47 | 2486720 Estrella
Estrella's picture

Cash continues to be king in the world where I exist. Perhaps my world is unique. I don't think so. I pay my subs and my customers pay me (and I dutifully report it all to the King's tax men) in cash. Seriously, my little business is almost all cash. (And I DO report it, because, I am scared to death of the King's thugs.) But, that is just what I see.

Fri, 06/01/2012 - 19:42 | 2486392 JohnKozac
JohnKozac's picture

I once saw people get this angry when Popeye's ran out of chicken legs.

Fri, 06/01/2012 - 16:36 | 2485841 Peter Pan
Peter Pan's picture

Or a meal for two with a terrible view.

Fri, 06/01/2012 - 23:30 | 2486706 Shazam342
Shazam342's picture

only if they are cannibals

Fri, 06/01/2012 - 15:36 | 2485537 Clueless Economist
Clueless Economist's picture

STFU...who are you, one of those trained seals serving as wallpaper at O's speech today?

Fri, 06/01/2012 - 15:41 | 2485571 slaughterer
slaughterer's picture

It looks like the syndicate bank goons monitoring this site have decided to break company rules and post their frustration here.  Where are you from JPM, GS, WFC?

Fri, 06/01/2012 - 15:46 | 2485593 CommunityStandard
CommunityStandard's picture

Warning: don't feed the trolls.

Fri, 06/01/2012 - 15:34 | 2485544 ArrestBobRubin
ArrestBobRubin's picture

Not now Kato!

It's Freaky Friday.

 

Fri, 06/01/2012 - 18:43 | 2486247 Ineverslice
Ineverslice's picture

Does your dog bite?

Fri, 06/01/2012 - 15:36 | 2485555 Conman
Conman's picture

Why i never...  you are completely wrong i only drink Zimas and use Old Spice. Now wherss my ammo and bucket food.

Fri, 06/01/2012 - 15:38 | 2485557 xtop23
xtop23's picture

Don't hate the player hate the game friend.

The loss of confidence in the banks around the world is hardly the ZH readerships fault.

Look to your politicians who pretend to run the world as enlightened elders, but couldn't run a lemonade stand properly.

Fri, 06/01/2012 - 17:21 | 2486042 DosZap
DosZap's picture

Look to your politicians who pretend to run the world as enlightened elders, but couldn't run a lemonade stand properly.

IF they were honest they could.But if your guaranteed no loss, why be honest, Snatch n Grab.

Fri, 06/01/2012 - 17:54 | 2486126 michael_engineer
michael_engineer's picture

Or practice IBGYBG (I'll be gone, you'll be gone)

Sat, 06/02/2012 - 19:11 | 2487940 Winston Churchill
Winston Churchill's picture

Dom't know about the lemonade stand.

The state of every country in the world is beginning to

make Zimbabwe look good.At least you know your

fucked living there.No more extend and pray.

Fri, 06/01/2012 - 15:40 | 2485564 EscapeKey
EscapeKey's picture

Oh I see, we should all be over commenting on the Keynesian boards, about how great a job Bernanke is doing, how the US Dollar has "historically" been the safest asset, and how every problem can be solved through large injections of liquidity.

Fri, 06/01/2012 - 16:05 | 2485670 Stimulati
Stimulati's picture

The policies you speak of and which are underway are the policies of Milton Friedman, and not Keynes.

Fri, 06/01/2012 - 16:06 | 2485674 EscapeKey
EscapeKey's picture

Yes, of couse, because Keynes said something about countercyclical public spending, which is about as likely to happen as the tooth fairy arriving on christmas eve.

Fri, 06/01/2012 - 16:10 | 2485683 Stimulati
Stimulati's picture

Do you remember Al Gore and his lockbox?  Just because the voters don't get the policy right doesn't mean Keynes is wrong.

Fri, 06/01/2012 - 16:13 | 2485697 EscapeKey
EscapeKey's picture

Yes, and if we attempt to introduce communism just once more, it'll definitely work.

Fri, 06/01/2012 - 16:16 | 2485711 Stimulati
Stimulati's picture

That's just ignorant

Fri, 06/01/2012 - 16:17 | 2485726 EscapeKey
EscapeKey's picture

Exactly. And despite that, we still have people thinking that Keynes's countercyclical theories actually work in reality, when it should be obvious to everyone that no-one would ever vote in a politician who'd actually carry out his policies.

Fri, 06/01/2012 - 16:29 | 2485775 Stimulati
Stimulati's picture

Modern Keynes - you only apply fiscal stimulus (government spending) at the zero lower bound.  Flooding the banks with money is Milton Friedman.  Just asking for you to get your economic theories right.  Believe what you want.

Fri, 06/01/2012 - 20:04 | 2486433 Kayman
Kayman's picture

Stimulati

And which economic philosophy espoused theft ? The Chicago School and Keynes' disciples simply provide cover for the criminals in charge.

Fri, 06/01/2012 - 16:26 | 2485778 BigJim
BigJim's picture

Mind you, if we only go for policies that our sheepy fellows will vote for...

Fri, 06/01/2012 - 19:51 | 2486405 marxist
marxist's picture

Communism can't be introduced. It will arise naturally as material circumstances dictate, as did capitalism at the collapse of feudalism in England. With the exhaustion of the value from land and the enclosing of common lands within private title, it was natural that these developments would extend themselves to greater and greater commodification of the rest of the commons as well as intangibles. America and the other colonies of England opened up the rest of the world to this system. As we approach full globalisation of capitalism, the bubble and bust nature of the system will increasingly pauperise the mass of the population...the material dialecticism that Marx spoke of....or the unseen hand of the material world which dictates the course of humankind and the civil systems that we order our affairs under. Incidentally, the paradoxical nature of capitalism will increasingly test the best of most analysts abilities as we alternately lurch between deregulation and interventionism in a bid to ensure that the periods of bust do not overwhelm the process of accumulation.

Eventually this will give way to a systemic cataclysm...which will either see a descent into terminal barbarism or the rise of a system that is antithetical to capitalism. However, this is not the end as this period will be a transition to one that finally synthesises both capitalism and its antithesis.

Sat, 06/02/2012 - 22:13 | 2488214 ffart
ffart's picture

The people of Washington state voted for the privatization of liquor sales. Now I can go to Costco and buy enough vodka to fill a bathtub for $30. How's that for a communist victory.

Fri, 06/01/2012 - 22:55 | 2486675 dougngen
dougngen's picture

winning....

John Maynard Keynes

/sarc

Fri, 06/01/2012 - 15:40 | 2485567 LFMayor
LFMayor's picture

Where is this Rock Ridge you speak of, shit bird?

Fri, 06/01/2012 - 15:46 | 2485597 Nordberg
Nordberg's picture

Just past the Gov William J. Le Petomane Thruway.

Fri, 06/01/2012 - 16:11 | 2485686 brooklynlou
brooklynlou's picture

Make sure you bring a shitload of dimes. It don't take EZPass ...

Fri, 06/01/2012 - 15:42 | 2485573 Dr. Engali
Dr. Engali's picture

We welcome strangers like yourself here. You have a purty face. Bend over and squeel like a pig boy......you are a boy aren't you?

Fri, 06/01/2012 - 16:18 | 2485728 ITrustMyGut
ITrustMyGut's picture

w00t!

*squeal*

*shifty eyes*

Fri, 06/01/2012 - 15:44 | 2485586 LawsofPhysics
LawsofPhysics's picture

...says the anonmous blogger posting on ZH.  Thanks for the tremendous insight Kato.  

Fri, 06/01/2012 - 15:45 | 2485596 the 300000000th...
the 300000000th percent's picture

you cant co-op me mr sneaky pants!

Fri, 06/01/2012 - 15:48 | 2485608 chump666
chump666's picture

marketwatch told you to go long right?

dumb a-holes missed the meltdown in China.  

ZH didn't.  

I drink quality Tequila

Fri, 06/01/2012 - 15:59 | 2485653 JohnG
JohnG's picture

Fuck you kato, just fuck you.

Fri, 06/01/2012 - 16:04 | 2485665 debtor of last ...
debtor of last resort's picture

ZH is going to NYSE next month. Buy some stocks?

Fri, 06/01/2012 - 16:07 | 2485673 debtor of last ...
debtor of last resort's picture

you bet they are doing better than facialbook ......

Fri, 06/01/2012 - 16:10 | 2485682 ImnotPOTUS
ImnotPOTUS's picture

Beg all you want but we are not taking in the Irish.

Mr. Johnson don't you agree with Geoffery Lebowski?

Fri, 06/01/2012 - 16:31 | 2485806 Ms. Erable
Ms. Erable's picture

We definitely need a better class of troll around here - this kato troll is stuck on full retard.

Fri, 06/01/2012 - 18:03 | 2486146 NotApplicable
NotApplicable's picture

Currently, over half of the thread is people taking his troll-bait, so I'd say he's found a seat in first class.

Sometimes, it makes me wish I'd payed attention in school.

I could'a been a contender!

Fri, 06/01/2012 - 22:17 | 2486645 Buck Johnson
Buck Johnson's picture

Listen, the Chinese economy is a big ponzi scheme and it's about to come apart real soon including India.

Sat, 06/02/2012 - 01:06 | 2486804 Oh regional Indian
Oh regional Indian's picture

Iz tru.

ori

Sat, 06/02/2012 - 13:27 | 2487373 dracos_ghost
dracos_ghost's picture

Yup, in fact I'd say the world is shitting a BRIC.

Sat, 06/02/2012 - 00:57 | 2486798 WallowaMountainMan
WallowaMountainMan's picture

"Realize that the vast majority of you who post here repeatedly are one step removed from the citizens of Rock Ridge. Or worse."

who u callin a 'citizen' ?

sure 'Or worse' is ok, cause 'citizen' aint that low a standard. i.e. use politician instead.

 

"Now back to your Bud Light and Axe body wash for the week-end."

man i gotta say...." Now back ' is a tad optimistic. i could barely get thru one bottle of the bud light/axel body wash combo, let alone consider 'back" as the next step.

Fri, 06/01/2012 - 15:42 | 2485532 Dr. Kananga
Dr. Kananga's picture

"As the company went bust and the boss disappeared, the members ... became rather angry, and went to the office of this company in Fuzhou to protest and smash things."

Gives new meaning to the phrase "Chinese Take-Out" eh?

Fri, 06/01/2012 - 18:51 | 2486261 Ineverslice
Ineverslice's picture

Currently in full Ponzi mode....this one will get Hot n' Sour.

In all seriousness, massive amounts of very hard working Chinese will get stir fried, and it will leave a mark.

Fri, 06/01/2012 - 15:33 | 2485533 ArrestBobRubin
ArrestBobRubin's picture

Chop chop!

Fri, 06/01/2012 - 15:35 | 2485536 eclectic syncretist
eclectic syncretist's picture

And we have been thinking that China would have the resources to come to our rescue.  Hmmmm.... might have to re-evaluate that presumption now.

Fri, 06/01/2012 - 15:40 | 2485565 Rainman
Rainman's picture

Larry Lang called it 7 months ago.

" EVERY PROVINCE IN CHINA IS GREECE " !!

http://www.mining.com/2011/11/16/every-province-in-china-is-greece-larry-lang/

Fri, 06/01/2012 - 15:35 | 2485538 midgetrannyporn
midgetrannyporn's picture

Not trusting banks is "crazy?"

Fri, 06/01/2012 - 15:35 | 2485548 PicassoInActions
PicassoInActions's picture

Chna will move soon to use us $. Than they won't need to peg.

Fri, 06/01/2012 - 15:46 | 2485599 xtop23
xtop23's picture

Yeah, that'll happen

Fri, 06/01/2012 - 15:36 | 2485549 carbonmutant
carbonmutant's picture

Do they have ATMs on the Wall?

Fri, 06/01/2012 - 17:49 | 2486119 fnordfnordfnord
fnordfnordfnord's picture

yup

Fri, 06/01/2012 - 15:36 | 2485554 Let The Wurlitz...
Let The Wurlitzer Play's picture

Soon the Chinese will be selling their gold, copper and ore stockpiles to pay debts.  They will be doing it at a loss.

 

Fri, 06/01/2012 - 15:41 | 2485576 EscapeKey
EscapeKey's picture

Yes, they will DEFINITELY not just start selling their $1tn worth of US Teasuries if it comes to that.

Fri, 06/01/2012 - 15:53 | 2485630 xtop23
xtop23's picture

Can you say bond market implosion?

Fri, 06/01/2012 - 15:55 | 2485632 LawsofPhysics
LawsofPhysics's picture

...and the Fed will DEFINITELY not buy those treasuries up either.

Fri, 06/01/2012 - 16:03 | 2485660 EscapeKey
EscapeKey's picture

Of course they won't. The Primary Dealers will, and then engage in repo's with the Federal Reserve in exchange for cash.

You see, DEFINITELY not the Fed buying the treasuries.

Just like adding to the reserves of the PDs is DEFINITELY not the equivalent of printing cash, because there's no physical pieces of paper involved.

/John Law was way ahead of his time.

Fri, 06/01/2012 - 16:17 | 2485707 LawsofPhysics
LawsofPhysics's picture

same as it ever was.  Well, at least until the supply chains break and real things are no longer being delivered.  Then, and only then, will things get interesting.

 

With the taxpayer  still paying for the Fed's repo.  Awesome, banks win again.

Fri, 06/01/2012 - 16:25 | 2485773 EscapeKey
EscapeKey's picture

Ah, don't worry. The Fed will deliver some speeches, throw in the word "sterilized" to make it all sound better, and claim innocence when it inevitably breaks down.

See, because it's all the fault of those Austrians, who are in no seat of power.

Fri, 06/01/2012 - 23:29 | 2486703 Demonoid
Demonoid's picture

Not a problem. When it comes time to bluntly speak Truth to Power, remember that our man in the White House knows more than a thing or two about the Austrian language.

Fri, 06/01/2012 - 16:22 | 2485757 chump666
chump666's picture

and the yield return is...? whilst the USD is bid.  The Fed will struggle if China liquidates and it looks like they are at the cusp. It was coming.  Commodities were being dumped 3mths back and Asia started selling and buying USDs.  Why? Mostly on inflation fears, that and they have a huge indust complex which is stuggling with higher operational costs and demand destruction.  This has bad as you could imagine.

The creditors of the world are in trouble + EZ bond/credit markets a total mess = major pain trade ahead

Fri, 06/01/2012 - 15:42 | 2485578 Cranios
Cranios's picture

IS THIS THE FINANCIAL EQIVALENT OF A CHINESE FIRE DRILL?

Fri, 06/01/2012 - 15:46 | 2485595 barliman
barliman's picture

 

No ...

... this the Chinese equivalent of  FINANCIAL fire drill.

You SHOUTING, wacist plick!

;->

barliman

Fri, 06/01/2012 - 20:44 | 2486499 Matt
Matt's picture

Chinese FIRE drill.

FIRE = Finance, Insurance, Real Estate.

Fri, 06/01/2012 - 15:42 | 2485579 LFMayor
LFMayor's picture

Hey AnAnon, what inside scoop you got for us on this one?  It's gonna be a hell of a scrabble score if you can weave "US AMERICAN COSUMERISM" in with this shit.

and p.s.,  stop spreading lies about Tianamen square to your relatives.  you wouldn't want the authorities to find out.

Fri, 06/01/2012 - 16:31 | 2485803 BigJim
BigJim's picture

"Pyramid ponzi schemes are hallmark of US Citizenism, which is everywhere and eternal, even in China" - AnAnonymous, chief Zerohedge US Citizenism expert, and all-round douchebag.

Fri, 06/01/2012 - 15:43 | 2485583 barliman
barliman's picture

 

Today China ...

... Monday, Germany ...

and the only thing that would stop those folks from cashing out?

Tuesday ... Germexit*

(* another trademark from Barliman Buggers Bernanke, Inc.)

barliman

Sat, 06/02/2012 - 18:38 | 2487902 Winston Churchill
Winston Churchill's picture

Or Spexit.

Fri, 06/01/2012 - 15:45 | 2485592 williambanzai7
williambanzai7's picture

Sounds like a classic social media Ponzi to me.

Fri, 06/01/2012 - 15:46 | 2485603 barliman
barliman's picture

 

SavingFaceBook?

barliman

Fri, 06/01/2012 - 16:01 | 2485657 onebir
onebir's picture

Yep - & unfortunately also a fairly typical Chinese investment fraud.

But the bank run is not what's typically meant by bank run. (ie it's motivated by fears regulators will freeze accounts, rather than fears wht bank is bust...)

Fri, 06/01/2012 - 15:47 | 2485605 Sudden Debt
Sudden Debt's picture

It happens to the best of banks...
Already more than a few times....
But taxpayers will pay the bill in the end... They always do.

Fri, 06/01/2012 - 15:52 | 2485628 Jonas Parker
Jonas Parker's picture

I dunno how the American taxpayers will be stuck paying for this one... but I'm sure we will!

Fri, 06/01/2012 - 16:50 | 2485913 ebworthen
ebworthen's picture

Currency swaps to keep the Renminbi (Yuan, whatever the fuck they call it) low relative to Dollar so flat screens and plastic crap stays cheap at WalMart.

Sat, 06/02/2012 - 02:13 | 2486849 Sudden Debt
Sudden Debt's picture

On a long enough timeline, you will pay for it.

Fri, 06/01/2012 - 15:47 | 2485611 Stackers
Stackers's picture

Blackened Peking Duck ?

Fri, 06/01/2012 - 15:47 | 2485612 jimmyjames
jimmyjames's picture

"people are not borrowing, but selling assets to pay down debts, and/or holding cash"

************

Sounds like a spoonful of deflation to me-

Fri, 06/01/2012 - 15:49 | 2485616 Pairadimes
Pairadimes's picture

This is priced in, I'm sure.

Fri, 06/01/2012 - 16:00 | 2485655 EscapeKey
EscapeKey's picture

In fact, it's strongly bullish!

Fri, 06/01/2012 - 15:50 | 2485621 Quinvarius
Quinvarius's picture

If you don't have gold yet, you are probably screwed.

Fri, 06/01/2012 - 16:19 | 2485704 ArrestBobRubin
ArrestBobRubin's picture

Naaah,, there's still time and the price is still a joke. But folks better get a move on.

Silver is what you should be thinking about in terms of true scarcity of above-ground stocks. And talk about a JOKE of a price? Who cares if it goes lower... Just buy as much as you can afford, month in and month out.

When you buy silver and gold, remember that you're just swapping some paper "money" for some of the Real kind. Do it for the long term, while you can. The lower the price, the more ya get in return for your trash cash.

Fri, 06/01/2012 - 15:52 | 2485623 Jayda1850
Jayda1850's picture

now boss is arrested, charged with taking deposits from the public illegally.

kinda fucked up that china actually prosecutes this type of fraud while in the US, corzine walks around free as a bird. what a great country I live in!

Fri, 06/01/2012 - 16:15 | 2485708 onebir
onebir's picture

If the boss was as connected Corzine, he'd be just as free.... 

Fri, 06/01/2012 - 17:33 | 2486083 DosZap
DosZap's picture

now boss is arrested, charged with taking deposits from the public illegally.

And they mete out Western (Old West Justice) there......7.62 Tok,to the back of the head.

We no pway awound hewe!!!!!!!!!!!!

Fri, 06/01/2012 - 17:42 | 2486099 TimmyB
TimmyB's picture

This type of fraud in China gets you executed. 

 

http://www.reuters.com/article/2009/12/08/us-china-execution-idUSTRE5B71VC20091208

 

Fri, 06/01/2012 - 18:06 | 2486154 NotApplicable
NotApplicable's picture

You mean publicly getting caught in this type of fraud. Mafias know nothing but fraud. Occasional executions are just the price they have to pay to maintain the facade of credible government in the eyes of the sheeple.

Fri, 06/01/2012 - 15:51 | 2485624 Your Creator
Your Creator's picture

Wait til earnings(losses) hit next quarter. what red flags?

Fri, 06/01/2012 - 15:56 | 2485646 kalasend
kalasend's picture

Yawn. Non-news. 

Wake me up when this does lead to a bigger run.

Fri, 06/01/2012 - 15:59 | 2485652 JLee2027
JLee2027's picture

Well the banks are all Ponzi schemes aren't they?

Fri, 06/01/2012 - 16:01 | 2485659 ArrestBobRubin
ArrestBobRubin's picture

The Chinese have figured it out for 3500 years, they'll figure this out too.

Meanwhile, ya better make a run on physical silver over here. Hopefully you have lots of rice, too.

Silver Manipulation- This Too Will Pass
Fri, 06/01/2012 - 16:11 | 2485672 ebworthen
ebworthen's picture

"Give me my cash now and shove your casino markets and corrupt banks up your asses!" seems to have international appeal.

Bullish for Gold and Silver.

Fri, 06/01/2012 - 16:06 | 2485675 Ned Zeppelin
Ned Zeppelin's picture

No 3 pm ramp job today.  PPT left early. Way in the red.  Monday, hmmmmm. . . . . . Need some kind of rumor Sunday night.  Some sort of new E (add capital letters of your choice) program to dice, split and otherwise candowntheroadittize this whole unfortunate Euro sovereign and bank debt problem.

But how?

Fri, 06/01/2012 - 16:08 | 2485678 Debugas
Debugas's picture

looks like classic russian MMM ponzi

 

http://en.wikipedia.org/wiki/MMM_%28Ponzi_scheme_company%29

Fri, 06/01/2012 - 16:12 | 2485692 EvlTheCat
EvlTheCat's picture

While sad.  It is nice to see that when the Chinese get shafted they loot and burn the offenders.

The amusing thing is, I remember not to long ago, an article here at ZH where several Chinese patrons were bashing "Amercian's" about being to shortsighted to invest in gold, and they would laugh all the way to the bank when our economy collapses.  I suggested that maybe they were assuming to much about their fellow countrymen and women.  Where I was promptly down voted into a blood red sea of ignorance.  It seems after all, that there is a level playing field, when it comes to bad choices in fruit machine investments, across the world.

In American terms this is called an, "I told you so".

Fri, 06/01/2012 - 16:14 | 2485699 Temporalist
Temporalist's picture

"and discuss funeral"

That is what ZH has been doing for years but the bitch won't die!

Fri, 06/01/2012 - 16:20 | 2485739 BudFox2012
BudFox2012's picture

Wonder how long before the Chinese have to print up rickshaws full of cash, just like the "enlightened" western countries...

Fri, 06/01/2012 - 16:36 | 2485847 combatsnoopy
combatsnoopy's picture

They can always back the value of the Yuan with Jimi Hendrix chips.  

Fri, 06/01/2012 - 16:22 | 2485753 Lionhead
Lionhead's picture

"As a result of this, people started queuing up at virtually all banks the next day.  One local resident told the reporter that the city “has gone crazy”."  Yes, the greatest fear of central bank planners everywhere can be summed up in two words, "Currency Backwardation."  Paper in hand is worth more than thousands in digital format & we know there isn't enough "paper" to satisfy the bank customers.

Fri, 06/01/2012 - 16:47 | 2485909 jimmyjames
jimmyjames's picture

Paper in hand is worth more than thousands in digital format & we know there isn't enough "paper" to satisfy the bank customers.

*********

Absolutely and if there isn't enough paper to find its way into the peasants grubby little hands--will they print it and bail them out?

I doubt it--

Fri, 06/01/2012 - 16:30 | 2485784 ThisIsBob
ThisIsBob's picture

Reminds me of  recent advice from El-Erian:  "If you see a line at your bank, get in it."

Fri, 06/01/2012 - 18:31 | 2486212 machineh
machineh's picture

"If you see a line at your bank ... CUT INTO IT!"

Fri, 06/01/2012 - 21:01 | 2486522 Matt
Matt's picture

During a real panic, cutting in line might get you killed.

warning: violent.

http://www.youtube.com/watch?v=9IdM84YVmV0

Fri, 06/01/2012 - 16:30 | 2485801 Morphine Drip
Morphine Drip's picture

In breaking news the Chinese government has decided to relax media censorship and let in American Idol and porn.

Fri, 06/01/2012 - 16:34 | 2485829 combatsnoopy
combatsnoopy's picture

Their banks should've put Remnibi slots in the lobby.  They say that Asians are the best and the brightest, but I've been forced to question that.  

Fri, 06/01/2012 - 16:57 | 2485947 falak pema
falak pema's picture

bank runs now are very much in fashion; its like a louis vuitton plastic suitcase; a must! If you don't have a bank run in your country your are out of fashion! 

Fri, 06/01/2012 - 16:56 | 2485950 q99x2
q99x2's picture

Madoff's demons must have escaped prison and set up camp across the world.

Fri, 06/01/2012 - 17:02 | 2485976 Infinite QE
Infinite QE's picture

You really get to now see why people have been panic buying gold in China. Imagine a department store in America selling bullion with customers three to four deep in numerous lines. 

Fri, 06/01/2012 - 17:30 | 2486076 mliu_01
mliu_01's picture

Come on this is not a bank run!!!

it is madoff event. someone played ponzi on those people. That is all. Not a bank run.

Fri, 06/01/2012 - 21:05 | 2486530 Matt
Matt's picture

Did you read the article?

There was a ponzi. it failed. then the government announced it would freeze the bank accounts of everyone involved so they could investigate.

This triggered a rush for all the people to take their money out of the banks.

While the cause is different than everyone fleeing a collapsing bank, the result is the same.

Fri, 06/01/2012 - 17:30 | 2486077 mliu_01
mliu_01's picture

Come on this is not a bank run!!!

it is madoff event. someone played ponzi on those people. That is all. Not a bank run.

Fri, 06/01/2012 - 17:43 | 2486104 roadhazard
roadhazard's picture

"No mow sweet tea fo you !"

Fri, 06/01/2012 - 18:11 | 2486161 oldgasII
oldgasII's picture

Things could get very bad in China if there is a perception of the loss of the Mandate of Heaven.  The various groups in the government could use financial unrest as an excuse to take power, the PLA vs the Princes vs new Cadre and etc. (See Warring States Period). 

Oh well, TIMMMMBBBEEERRRRRRR.

Fri, 06/01/2012 - 18:27 | 2486204 jonjon831983
jonjon831983's picture

Wow, this is sad.

I'm sure if people thiought it to be legit, they were able to secure a good return on their cash... terrible... if many lost life savings.

Heard there is one in Russia that specifically says they are a pyramid, and uses Paypal - it's turned into... Russian ... (thinking of Roulette, but that's already taken).

Fri, 06/01/2012 - 19:09 | 2486305 HungrySeagull
HungrySeagull's picture

That pleases me, if the Chinese are getting out of Debt...

It matches what I and wife are doing.

Ya know.. that would be a Historical Change in our World History when we refuse to play the debt/credit card/student loan/borrowing game no more.

No cash so solly. Here is your internet account kit.

Fri, 06/01/2012 - 19:26 | 2486345 slewie the pi-rat
slewie the pi-rat's picture

i read every word

hopium delayed is hopium denied

talk about fungibility, tho:  timmah and christineL go to madrid and when they split, there's a bank run in china

"we want our pictures ofMao!"

theParty, involved in transmission of power and bag-manBingo, must be pleased at the demand for the fiat coupons, comrade BiCheZ!

Fri, 06/01/2012 - 19:38 | 2486387 gwar5
gwar5's picture

Chinese can stop the runs with tanks and guns while they load up on more of the global gold still available. 

 

 

 

Fri, 06/01/2012 - 21:43 | 2486594 Ned Zeppelin
Ned Zeppelin's picture

Same as will happen in the US - no gold owners will be allowed to win this game, and the power of fiat will be enforced at gunpoint if need be for those who doubt it.   If you own gold, and plan on that being your way out of this mess, better load up on that other precious metal, lead.

Fri, 06/01/2012 - 19:49 | 2486398 John Wilmot
John Wilmot's picture

The economic miracle in China is exactly like the economic miracle in the Soviet Union, or NAZI Germany for that matter - they were all basically inflationary booms brought about by massive central planning, and or pure propaganda divorced from anything resembling reality, and the socialist fellow-travellers in the Western media duly lapped it up like the useful idiots they were/are.

Eventually the Chinese boom will bust, maybe we're seeing the start of that now. I'd sure love to see all the China boot-lickers in the media eat shit for their years of shameless propaganda.

Fri, 06/01/2012 - 21:41 | 2486590 Ned Zeppelin
Ned Zeppelin's picture

Exactly. Thank you.  I listened to some a-hole from HSBS practcially cum over the arwaves on Bloomberg earlier this week waxing poetic on how the Chinese are freaking geniuses at central planning, clearly intimating jeez why don't we all get on board this totalitarian f-ing train.  A- hole.

Sat, 06/02/2012 - 08:13 | 2487033 Bogdog
Bogdog's picture

It would be effing awesome to see China implode RIGHT now, ahead of Europe, ahead of Amerika. It would buy us some time to get our shit in order. FLIGHT TO THE ALLMIGHTY DOLLAR. T-bills to the stars and beyond!!!!

Sat, 06/02/2012 - 08:08 | 2487030 Bogdog
Bogdog's picture

Looks like a combo pyramid and ponzi scheme. The chinese did Madoff better than Madoff. It's Madoff 2.0. And with that better scam will come the better punishment, a 7.6x39 through the skull. 

Sat, 06/02/2012 - 08:47 | 2487051 RoadKill
RoadKill's picture

I've said this before but one of the Black Swans we are going to see in he next few years is China waking up one day and finding put $1 trillion of their foreign reserves are missing.

Political corruption is rampant there. Every local mayor has stuffed $50mm into offshore accounts. The land men are making fortunes by stealing land from peasants and selling it to developers.

This will likely be discovered right at the same time as the housing market implodes AND the banks discover how bad their industrial loan book is.

The collapse of China will be EPIC. Central planning at it's maximum for over 50 years.

Sat, 06/02/2012 - 09:15 | 2487073 Flying Tiger Comics
Flying Tiger Comics's picture

This is what I love, and by love I mean hate, when the lapdog media propagandise about some third world dictatorship or kleptocracy being the next big thing or the next tiger economy etcetera.

China is Nazi Germany redux, and like Nazi Germany it's a creature of foreign bankers, created to provide the Hegelian alternative to the US. Puppet shows. Shadows on the wall.

Remember when Japan was the big cheese? All on borrowed money? Hm, very convincing. Here we are again.

Countries that can't eradicate leprosy, cholera and slavery are not the equal let alone the superior of any anglosphere nation. They are reversionary pod people farms.

Sat, 06/02/2012 - 10:09 | 2487101 Dre4dwolf
Dre4dwolf's picture

Soon the govt will make it illegal to pay down debt, with the goal in mind of keeping everyone in debt forever, o wait .... its pretty much like that now.... for a good portion of the population.

Sat, 06/02/2012 - 13:40 | 2487400 dracos_ghost
dracos_ghost's picture

It may not be illegal to pay down debt, but if you pay down debt, it is NEGATIVE on your credit rating. Seems to me to be a textbook definition of indentured servitude.

Sat, 06/02/2012 - 10:52 | 2487153 El Yunque
El Yunque's picture

All your jars are belong to us.

Welcome bank Sealy, Simmons, and Kerr.

Free beach towel are every withdrawal over 1000 chicken feet.

Fuckit, pass the Huy Fong.

Sat, 06/02/2012 - 18:22 | 2487875 Winston Smith 2009
Winston Smith 2009's picture

The most relevant portion from my quick scan of the Google translated Chinese web page seems to be the following passage:

"In the evening of May 30, there are rumors that the relevant state departments to rectify rebate network, it may freeze the personal bank account." Number of Wuyishan local residents confirmed to this reporter, "so people flocked to the bank teller, 31 withdrawals crowd formed the climax, are overcrowded urban areas, Construction Bank, Agricultural Bank of China, ICBC even Wuyi University, backdoor teller machines."

Below is the Google translation of the entire Chinese article linked to above.  Perhaps "rebate network" and "Mall" have some other meaning in Chinese?:

The Fujian rebates network collapse scam involving 23 provinces and cities 21st Century Business Herald looked Fuzhou reported 2012-06-01 01:05:50 Comments 0 read the news anytime, anywhere Core Tip: "100 per cent Mall claiming more than 20 million members, involving 23 provinces and cities. One surnamed member said," started when I heard the full mall owners Yao Jianqing and senior have escaped more than 10 billion Pao Lu. "

Empty.

May 31, the edge of the Fuzhou West, Fauci Lake Garden north-floor six-story is a mess, the whole layer of the huge office space only a few grid, ceiling air-conditioning, including all items have been looted. about 300 square meters of space can be seen everywhere damaged ceiling and scraps of paper waste, and even the Office of the Chairman of the glass door was smashed.

"In the middle of the night on the 28th, happened here the mob looting took indoor items is a member of the full mall, an angry crowd smashed the decoration." Fauci Lake Garden security told this reporter.

This is where many members had placed 100% of fortune dream mall stronghold. This reporter saw a full-affected member notice pasted on its door bearing the words: you full members and the victims go to Fuzhou Economic Investigation Team focus, and discuss funeral.

"Full mall claimed more than 20 million members, covering 23 provinces and cities." Member surnamed Chen, told this reporter, "the causes of things heard the full mall owners Yao Jianqing and senior have escaped more than 10 billion Pao Lu. "

On the evening of May 31, the reporter learned from the Fuzhou police, Yao Jianqing was the same day was five brigade of the Fuzhou Public Security Bureau of Economic Investigation Detachment from the field and arrested and brought to the suspected charges of illegal deposits from the public, within a short time the police have registered the cheated amount of tens of millions million.

Involved in this case the number and amount, is still the legend diverse. Since the filing due May 29, made a report people are doing it, has not yet specific statistics on the amount involved and the victim number.

May 28 night in Fuzhou, looting, and has rapidly spread to northern Fujian Wuyishan City.

The Wuyishan banks a run

Hundred percent rebate comes from Fuzhou mall collapse event, but soon make waves in Wuyishan City, 356 kilometers away.

"In the evening of May 30, there are rumors that the relevant state departments to rectify rebate network, it may freeze the personal bank account." Number of Wuyishan local residents confirmed to this reporter, "so people flocked to the bank teller, 31 withdrawals crowd formed the climax, are overcrowded urban areas, Construction Bank, Agricultural Bank of China, ICBC even Wuyi University, backdoor teller machines. "

"Wuyishan public Ma told the reporter, the evening of May 31, downstairs are loud call notification queue to take money out noise, thunder kept the motorcycle on the streets," Wuyishan crazy, "she said, her husband is 100% rebate mall members.

"Rebate network the country's most active areas of Wuyishan." A local source revealed to him every day to listen to friends and colleagues talk about rebate network, earn money to buy a car also. March to April this year, most people throw money to rebate network, buy tens of thousands of people, or even hundreds of thousands of millions to buy. "

Many local people said hundred percent rebate mall development in the Wuyi mountains of many shops and became an "investment" for quick profits, and slowly evolved over time and some people operating mode, to attract more to the more ordinary citizens to join.

The reporter learned from multiple sources, Following the Wuyishan whole city crazy, Jian'ou, Shaowu, Shunchang, Pucheng counties belong to northern Fujian, a variety of names, "Money begets money" rebate "riches" game the same hot.

But because of a sudden the same thing, and increasing number of withdrawals and report the number of people involved and the amount of these places is also not specific statistics.

"Money begets money" riches game

In, Fauci Lake Garden looting has been the passage of time, but until the afternoon of May 31, not when someone thirty-five together to come here to find out the full rebate mall situation.

While in front of a piece of paper "announcement", said the arrears of rent, the landlord has the right to use recovery.

Property of the building told reporters the full rebate Mall to move into here at the end of the original tenants of the housing Yao Yuan, Fujian Jianou.

The reporter learned that operate 100% rebate Mall enterprise Fuzhou Yi Health Science and Technology Development Co., Ltd. (hereinafter referred to Yi Johnson).

Trade and Industry data show that Yi Health was founded on December 23, 2011, 10 million yuan of registered capital, is the software industry, business scope is very heterogeneous, including daily necessities, building materials, dozens of industries. The legal representative of the company for the original Yao Jianqing, March 31 and May 24 this year has changed to Feng tour wang, Weiping. The shareholders have also gone through two changes the Yao Jianqing, how to spend months changed to swim Wang, Feng, Fan Baoyu, and then change Weiping Gao and Ke Qimin.

The reporters found that the friendship born on December 25 last year, the Company changed to its present name by the the Jian'ou full E-Commerce Co., Ltd. ", founder of Yao Jianqing Department of Fujian Jian'ou, aged 39.

May 7 to 8, Yi Johnson was held in Fuzhou West Lake Hotel a national dealer meeting, a member of more than 500 from all 23 provinces and cities, agents, distributors attended the meeting. A percentage rebate mall dealers said.

According to its disclosure, in the so-called National Dealer Meeting

Publicity, only the 8th to the 14th week of May, Yi Johnson absorption member of several hundred million of funds. The same month on the 14th, the old site of the "100 per cent rebate of friendship Johnson Close, 18, named the" 100 per cent Mall new website, suction gold numerous two-day promotional activities.

The reporter learned from more than members mouth, Yao Jianqing began in May 2011 through the network of shopping malls full, to receive a 5% fee the way development agents and franchisees, and to absorb the member funds, commitment to 100 days back to this, net profit in 400 days of high returns, "Money begets money" profit mode.

The Fujian rebates network collapse scam involving 23 provinces and cities

The initial approach, Member Shopping 1 million in the franchisee, to pay 1600 yuan Yi Johnson, Yi & Johnson $ 20 per day rebate to members, for a total rebate of 500 days. With a membership of more and more, later converted to 1600 dollars you can get $ 20 per day rebate paid directly to the friendship Johnson, Yi Johnson received from members daily 20 yuan rebates 5% fee.

Yi Health wantonly take the model of development of the regional agency "offline" to grow the membership team. "Agents of the initial fee is $ 10,000, and promotional activities during the price is 5000 yuan, Fujian Province, one agent said. According to the odd members, full mall agents to join more than 6000 in the country.

The reporter May 31 the bank bills and customer information display, Yi Johnson call the members of the rebate a few hundred to several thousand dollars, the amount of remittance Join majority for a few thousand to several million .

More involved in the amount of Fuzhou, Fuqing City, under the jurisdiction of, a few people together tens of millions of dollars. "A member said," after the outbreak of the fuse is also a few people be informed of the change of friendship born shareholders. force new legal representative Weiping return of investment funds, resulting in the collapse of 100% rebate Mall. "

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