Saturday, May 12, 2012

Waiting for the next capitulation

Ha! This article is brilliant. It is what Chanos has been saying for so long now... here, here and here.
Chinese banks are fragile and are hiding non performing loans; sure, they will be covered up by the Chinese government soon enough, but when that happens, investors will be forced to flock away due to distrust. Or so I hope.
I have not been able to figure out the repercussions of what is, in effect, loans made by the government itself to companies which don't deserve loans. Eventually, they would be NPAs/ NPLs but does that affect the printing machine?

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