I work online Miro...<quoted text>
You must be very busy washing dishes at that Dim Sum restaurant you work at in Richmond, now that it is New Year's.
Don't mind the laughter of the patrons you grovel before while cleaning up the garbage and bones from their tables! They laugh at you because they just can't help it....
you obviously dont... so it means you are not working right now...'
probably got sick of serving rich Chinese
The difference between U.S. and China's credit booms
By Scott Cendrowski, writer January 30, 2014: 1:00 PM ET
China's shadow banking complex is worrisome. But it compares favorably to the most recent U.S. credit boom in one regard.
FORTUNE -- Just before China shuts down for the next week for the Chinese New Year, independent research firm GK Dragonomics has released a fascinating report for people worried about China's latest shadow banking product. We're talking about so-called wealth management products, retail investments that pay higher yields than deposits. One of them was named Credit Equals Gold No. 1 and needed a state bailout this month after failing to repay loans to wealthy investors.
What Dragonomics' Joyce Poon observes is that U.S. and Chinese banks are quite similar in how they schemed to push lending off their books and avoid loan-to-deposit limits. During the U.S. credit buildup of the mid-2000s, the product was CDOs. In China, it's wealth management products, or WMP, which grew 40% to $1.66 trillion from late 2012 to Sept. 2013, says Poon.
Poon writes the key contrast between the booms in U.S. and China is as follows:
"The big difference between the two economies is that China's non-bank lending does not involve genuine securitization. In the U.S., risk got fully dispersed from bank balance sheets and collateral was used multiple times further down the securitization chain for funding. Of course, during the 2008-09 crisis, U.S. banks were forced to take many non-performing assets back on balance sheet. The difference in China is perhaps that banks have no illusions about the ultimate recourse to them. Measured in these terms, China's systematic risk remains within reasonable limits."
You can judge those reasonable limits for yourself:
Poon goes on to say that private sector credit in China is fully funded by domestic savings, which continue to grow. Compared to the leverage U.S. banks built up during the 2000s via securitization, not backed by adequate capital, China looks better.
The conclusion is that WMPs won't bring down the Chinese economy. But it is true that they are a symptom of a bigger problem: Banks are skirting the Chinese government's intentions to reduce risky lending. It seems the government still has a long way to go.