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China’s Zhongzhi Crisis Underscores Risk Of Economic Collapse
An opaque Chinese conglomerate with a trillion yuan in assets spread across everything from real estate to private equity to mining rights. What could go wrong?
If you've never heard of Zhongzhi Enterprise Group, don't feel bad. It's not exactly a household name in the West, but it's a big deal in China's $3 trillion trust industry. On Monday, Zhongzhi was in the news for the wrong reasons.
Zhongzhi has ownership stakes in half a dozen licensed Chinese financial institutions, including Zhongro
Right around the time (years ago) you started sounding your EWS (early warning system) regarding China, I was about 3 weeks into holding a basket of 4 or 5 China stocks- mostly related to education. I immediately sold and retreated back to “my safe corner (SPY)”. Still there.
EM index funds are exposed to China. I had an impossible time picking through them to find one that wasn’t. Country specific indexes seem to be the easiest way to avoid China..
EMXC
The next Big Short, perhaps?
I learned the hard way a dozen years ago about investing in China…at first thought it might be primarily attributable to the venture / microcap sandbox we were playing in, but over time have come to realize the labyrinthine and opaque webs of fraud and deception exist at every level.
Definitely absurd, but definitely true!
The biggest take away: Ray Dalio tried to play us for idiots. Nice try with the pump and dump. no dice…..
Hmm…might we be in for an August 2015 China spooking markets / global economy redux…?