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China's Ponzi Schemes and Poway, California

Joe 145 Wrote: Aug 12, 2012 9:10 AM
Centrally run economies are going to run into financial trouble. China may have eased its economic policies over the past few decades, but the economy is still basically run by the government. Stuff like this article points out are common and are to be expected.

Top Chinese banks are involved in Ponzi financing of investment deals, offering interest rates over 7% to depositors, to finance real estate projects gone bust and other projects whose assets are not even disclosed.

Banks label these schemes "Wealth Management Products" (WMPs) but any individuls foolish enough to invest in them are going to lose money, perhaps all of it.

Reuters explains in a special report China's answer to subprime bets: the "Golden Elephant"