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Yangtze River Port and Logistics: On-The-Ground Research Shows Assets Fabricated (hindenburgresearch.com)
111 points by ilamont 5 months ago | hide | past | web | favorite | 40 comments



In 2006, during my second of many trips to China, I had the chance to have dinner with a banker in Beijing. A quintessential 洋鬼子, I was stunned to learn at the time that many of the loans being underwritten were based on valueless collateral and I expected the correction and liquidation of the century to occur any day. Almost 13 years later and I am still waiting for the correction. I know its coming, and I know it will be epic, but I can't tell you when. I view recent disappearances in China and various crackdowns on dissent as indicators the time is near.


Or 洋人 、 洋大人

I think there's an important aspect of China is that the gov just has so many tools to sway the economy, and status quo will always be tolerated and supported as long as there are enough people are benefitting from it.

People has been worrying about the housing bouble for a decade now, but in China, the gov owns all city land, can dictate land price and supply,control condo price,it's like the perfect tool, it keeps enough people happy since the price is always rising at major cities, it keeps people loyal cause your fortune are on it, and it absords most of the money non-stop printed to prop up the Chinese economy.


which disappearances ?


https://www.nytimes.com/2018/12/08/opinion/sunday/lu-guang-p...

“For five weeks, the world has had no idea where Lu Guang is.”


The Interpol guy is a good example.


The company's response to this report: https://www.ajot.com/news/yangtze-river-port-and-logistics-l...

It's very vague and to me it doesn't inspire any confidence at all.


Stories like these are going to become increasingly common. Chinese companies are completely opaque and the SEC cannot easily audit Chinese companies. It's easy to rip off Western investors as the power structures lean towards Chinese citizens, always. Their entire business structure is built with the Chinese first and everyone else second.

SEC statement: https://www.sec.gov/news/public-statement/statement-vital-ro...


Is there any special treatment to allow Chinese companies doing this? If not, I'm afraid this kind of fraud would apply to many business across the globe. Proper conclusion drawn from this incident is that loophole revealed in such case should be fixed to protect investors.



Obligatory reference to The China Hustle, a documentary that won awards for putting the spotlight on this fraud being perpetrated at scale.

https://www.nytimes.com/2018/03/29/movies/the-china-hustle-r...


The Chinese feverishly discover and exploit every scammable niche imaginable, both illegal and legit. This appears to be key to their success. This scam will tank, but the mentality and culture that produces it drives the entire country forward at break-neck speed.


I wouldn't attribute to a population what can only be attributed to one individual, the company chairman. Does the Enron scandal prove all Americans are scammers for profit gain and will manipulate their values like Anderson's auditors? No it only proves that there exists some in American society.


I agree with your point but the Enron example contradicts it. One of the biggest lessons of Enron was that nearly every part of our financial system was complicit in the corruption.

There were all those things like Glisan's scheme to sell Enron assets to Osprey- all the credit rating agencies rated Osprey, and all the major institutional banks invested. I don't remember the names of the other shell company refinance schemes, but there were multiple.

Then there was the bragging in financial press how Enron could raise money using innovative financial vehicles that didn't issue stock or take debt in a way that had to be reported to the street.

Thats bad enough but the leasing shell game that was a part of that couldn't have worked without leasing the tankers to the banks.

Anyway, I think the majority of people are honest and hard working, but whole industries can definitely be corrupt and depraved.


On popular Chinese video sites, you can watch the pirated China Hustle, and the comments section is unsurprisingly almost all about blaming the Americans' stupidity.

American systems are just full of loopholes for Chinese, and Chinese will exploit every one of it for gains, and it's seen as deserved and normal in China, cos they are not taking from you, it's from "the system/pubilc/country", so it's non of your business and not yours to judge, if your are jealous then take it yourself if you are abled too.


If you can find a Chinese person that is willing to be open about the topic with a foreigner (no mean feat) you will find they almost certainly agree with what the person you are replying to is saying. It is not just this one individual... it is an endemic problem in China and is pretty much just as that person claims, sadly.


One of the many reasons I’d never invest in a Chinese company HQ’ed over there.


I did well with PetroChina when the bubble started, and everyone was enamored with China. But once I started seeing that local corruption and fabrication of manufacturing numbers was widespread, I bailed and invested in Europe and North America.

I'm too old to take chances with my money anymore.


Worked out for Yahoo and Softbank and their Alibaba investment.


The incredibly tight range over which this stock has traded, on low volumes, over the last 4 months is pretty suspicious.


yeah it sort of dropped from $13.xx to $10.xx up to $11.xx for a long time and now down to $8.xx and I suspect going lower.

There was another trend between 2015 and 2017 where it also was tight trading.

This was actually the reason why I bought stock was because I could buy when it went low, sell when it went up and turn around and buy again and again on the lows. Rinse and repeat this cycle. It worked pretty well until now.


This is the whole premise of the China Hustle: https://www.thechinahustlefilm.com/



So what's stopping someone from shorting YRIV?


Before? Nothing. Now? If you can find anyone who will let you enough shares to short in a meaningful way, you can do it. But you need someone betting the other way, which is not going to be that popular once the article is public.


Dammit. Could have sold them for ~ $8.75 when this came out. It is $4 now. :-/

https://finance.yahoo.com/quote/YRIV?ltr=1


Damn I own stock in them.


Out of curiosity...why? As part of an index fund or directly?


Vanguard is going to have to start conducting independent audits.


Why? The whole point of indexing is not to do that. Feel free to move your money to an active fund that tries to catch out companies with lies on financial statements.


Or perhaps an indexing that does.


That would be active management


Directly.


By choice? Did you do due digilence before deciding to invest?


It was sort of by choice at the time. My algo picked this out but at that time I was still manually approving trades.

I was buying and selling pretty quickly when the stock was doing good. (I back tested this before buying). Then the stock lost value to where I didn't want to sell anymore. Now it is down a lot. I may dump my position and now short the stock as I think after this news it is going to tank tomorrow morning.


Technicals work until they don't.


I would not be surprised if mortgages from Puerto Rico held by the US Treasury or on the balance sheet of banks were for homes that do not exist either. The government of Puerto Rico is known to be corrupt and has changed the measured distance of many roads on the island at least 2 times in the last ten years. This correlates with when the US treasury window was open to MBS paper exchanges at par value.


I know you're being downvoted for being off-topic, but I'd like to know more about this:

The government of Puerto Rico... has changed the measured distance of many roads on the island at least 2 times in the last ten years.

I ask as someone who has to sometimes locate addresses on maps of Puerto Rico, and occasionally has problems doing it.


Every public road in Puerto Rico is kilometre marked as highways in the US are mile marked. Addresses to property are then designated by the km sign they are nearest too. From what I can tell with my limited Spanish ability, the legal address of the property is based on this as well. The government here decided to remeasure and mark these roads twice in the last ten years, effectively creating an entire new set of legal addresses for many roads that cross the entire island.


And how is that corrupt? Renumbering happens a lot. Even a big city like Chicago was renumbered twice.


The simple act itself is not corrupt. Illinois' budget is also in a financial hardship, from what I have read. In my own reasoning to answer the question of, what is behind making a change to legal addresses like that. The only answer I have come up with based on the opinions I have heard of corruption in the government, is that it would be nessecary to fabricate entire MBS or parts of MBS, that then could have been sold to the treasury at par value. The address changes happened while they were accepting the 4 trillion plus, in mortgage backed securities that they now hold.




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