"Wealth management products" in China - long on promised returns, short on details - are showing...


"Wealth management products" in China - long on promised returns, short on details - are showing cracks, and given the mammoth size of the industry ($3.5T may be issued this year), it could have ramifications for the banking system and the global economy. "This is not fundamentally different from a Ponzi scheme," says BAML's David Cui.

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Comments (4)
  • Paulo Santos
    , contributor
    Comments (33733) | Send Message
     
    Whooo this is big!
    6 Aug 2012, 12:47 PM Reply Like
  • winningtrader
    , contributor
    Comments (2459) | Send Message
     
    Basically, this is very bullish for gold. The locals don't really have much else to invest in and they will buy precious metals. They are going to make money on this trade in my view.
    The one question is how the Western Bond Markets are any different. No country can pay its debt and earlier investors can only be paid with money from later investors ... this is the definition of a Ponzi scheme.
    6 Aug 2012, 01:01 PM Reply Like
  • Matt Ritter
    , contributor
    Comments (12) | Send Message
     
    They'll invest in precious metals... unless they lose money in these vehicles and start pulling money out of gold to regain a cash position, which will of course drive gold down.
    6 Aug 2012, 02:33 PM Reply Like
  • Matt Ritter
    , contributor
    Comments (12) | Send Message
     
    So how do I go about shorting this Chinese shadow banking system? Hmm...
    6 Aug 2012, 02:30 PM Reply Like
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