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China's local government debt is "out of control," says Zhang Ke, head of a top Chinese...

China's local government debt is "out of control," says Zhang Ke, head of a top Chinese accounting firm, and it could spark a bigger crisis than the U.S. property crash. He says his firm has mostly exited from the business of underwriting local government bond issues as the municipalities cannot service the debt they are taking on. "Things could become very serious."
Comments (8)
  • Tom Au, CFA
    , contributor
    Comments (6777) | Send Message
     
    Could this be one reason why Chanos is so bearish on China?
    16 Apr 2013, 04:23 PM Reply Like
  • fourchan
    , contributor
    Comments (80) | Send Message
     
    he has said as much.
    16 Apr 2013, 11:19 PM Reply Like
  • JohnPent
    , contributor
    Comments (3) | Send Message
     
    That's why you see China buying US government debt, and they typically let outsiders buy their municipal debt. Those at the top in China are not fools.
    16 Apr 2013, 04:52 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    China bought loads of FanFred debt - which is one reason they were sent into conservatorship. China will likely bail out their markets, just as the U.S. has.
    16 Apr 2013, 05:03 PM Reply Like
  • divinecomedy
    , contributor
    Comments (466) | Send Message
     
    Today's rule is the more you print, the more valuable your currency is. The most important thing is to keep enriching a certain number of people only.
    17 Apr 2013, 01:11 AM Reply Like
  • Petrarch
    , contributor
    Comments (782) | Send Message
     
    quick...call Meredith Whitney. Get her on the case.
    She understands muni debt...

     

    P
    17 Apr 2013, 03:01 AM Reply Like
  • HPBunker
    , contributor
    Comments (219) | Send Message
     
    Can't China solve this problem by just making up more optimistic economic data in the future? I mean, really, out of control municipal debt is nothing a little fraud can't take care of.
    17 Apr 2013, 04:27 AM Reply Like
  • User 353732
    , contributor
    Comments (4913) | Send Message
     
    As in Greece, Spain, New York, Illinois and California, so in China.
    The same model of deception and bad debt to create the illusion of prosperity; the same compression in the long term capacity to create real wealth and income.

     

    Collectivism based on bad debt and bad money is the dominant global model for now.
    17 Apr 2013, 05:18 AM Reply Like
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