It’s Official: China’s Collateral Rehypothecation Fraud Is Systemic – Everyone’s Involved!

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–  China’s Collateral Rehypothecation Fraud Is Systemic (ZeroHedge, June 14, 2014):

It’s official – everyone’s involved! According to the 21st Century Business Herald, at least 17 financial institutions involved in copper, aluminum and other nonferrous metals financing business face losses of almost 15 billion Yuan (not including the contagious rehypothecated collateral chains involved) due to the over-invoicing of the Qingdao port. Crucially, it appears that the evaporation of collateral (i.e. multiple loans secured by the same collateral) has been confirmed officially and banks such as Standard Chartered have already ceased any new business via this supposedly secured channel.

Via Caijing (via Google Translate),

According to the 21st Century Business Herald, Qingdao, where at least 17 banks involved in copper, aluminum and other nonferrous metals financing business, which 17 banks, including China Eximbank, the establishment of diplomatic five rows of workers and peasants, China, Minsheng, Industrial, Investment, CITIC five medium-sized banks, also includes Prudential, Qilu, Rizhao, Weihai, Weifang, Shandong and other local financial institutions, coupled with a remote city in Hebei banking firm.

Informed sources said 17 financial institutions involved in the financing amount Qingdao Port trade finance business in non-ferrous metals 14.8 billion yuan from top to bottom, including single-family Eximbank in 4 billion and down, accusing him of involving an amount of more than 1 billion are down.

At the end of the first quarter of 2014, the outstanding loans in foreign currencies, Qingdao 998.46 billion, of which the balance of the manufacturing sector was 228.53 billion; 15 billion equivalent to 1.5% of total outstanding loans to local financial institutions, manufacturing 6.5% of the loan balance .

Qingdao Port nonferrous metals repercussions in the financial institutions financing fraud also caused the divergence. Next, the bank is bound to tighten credit financing, a thorough investigation of existing financing facilities of collateral, which will further exacerbate the bad debt exposure process.

As early as the end of April, the CBRC supervision quarterly meeting, the China Banking Regulatory Commission had warning, “the steel industry trade violations financing model has been copied to sign the copper, coal, iron ore, soybeans and other commodities trade finance field.”

Commodity trade finance risks for the first time and industries with excess capacity, and real estate financing platform tied to become the focus of regulatory agencies in the field of credit risk prevention.

For a number of foreign banks involved in financing scam Qingdao Port nonferrous metals foreign banks, including Standard Chartered Bank, had previously announced a halt for some Chinese metal financing business from new customers.

The effects are already clear in Copper and Iron Ore prices.. next we see if the physical gold bid re-appears as CCFD unwinds continue and crediot contracts for all but the most creditworthy names in China (and there’s not many of them left).


3 thoughts on “It’s Official: China’s Collateral Rehypothecation Fraud Is Systemic – Everyone’s Involved!”

  1. So much for China being the #1 economy by 2020.
    The idiots followed the West.
    Wait until it unfolds in the Euro and the US as well.
    Look how long Germany has to wait for their gold stored in the US and in France……….years. The question is why. The answer is far more to the point, they don’t have it.
    Gold has been oversold for years, along with silver, platinum and other precious metals, far more than what actually exists.
    I once read all the gold in the world could be put into two Olympic swimming pools. If that is true, it has been gravely oversold.

  2. Pssst, wanna buy some gold?

    I know a geezer who says he can get it on the cheap…..

    I think Marilyn is right. It has been filched by the banksters. Now they are being exposed as the thieves we have now grown accustomed to.

    Unfortunately, our entire society and livelihood , dependent on the system these thieves set up, looks doomed as their thievery becomes exposed.

    Joe Numbskull won’t join the dots, but the small minority who study reality, won’t be surprised when everything starts to disintegrate.

    The writing really is on the wall, we must forward plan even though it is probably futile. At least it gives us hope, and that is essential.

  3. In response to Squodgy: I don’t see how anyone can plan for something that has not ever happened on a global scale before. Countries have endured national economies that have collapsed, but it has never happened on an international scale before… least when we have any written history on the subject. I don’t like saying never, because much of our histories have been destroyed by wars, fanatics, collapse of empire. We would not have what history we have in the Great Books were it not for the Irish monks who saved what they could after the fall of the Roman Empire. Were it not for them, we would know nothing of earlier days.
    I remember going to Washington DC and thinking the capital building a copy of Ancient Rome……the domed building, the columns, beautiful architecture…….Ancient Rome as it must have looked in it’s glory days.
    Nothing is new, not even architecture.
    I am sure there were financial collapses that went along with the fall of Rome, but it happened over hundreds of years. In our case, it is happening in hundreds of weeks…..much faster, and covering the entire world. Rome ruled the world as they understood it, but there was much land unknown at that time, there were places yet to go and pioneer. In our case, we have nowhere to go…..greedy guts have swallowed up so much, they are now feeding on themselves.
    Corporations have replaced career based economic growth. They have bought congress, and gotten all the truth in advertising, and monopoly laws repealed. So, they have swallowed up all competition, and there is nothing left to eat up but each other. The selection has gotten very small, and it cannot continue much longer.
    Over the last 90 days, the entire US market has been supported by FED QE of $45 billion a month (out of the people’s future that really doesn’t exist) and corporations buying back their own stock………nothing more.
    No fresh money, nothing new to invest in, just the same sorry, ugly corporations that usually screw their stockholders…….so all money is going east where there is opportunity…..east to Putin land.
    If I were 20, instead of over 60, I would emigrate, I would not stay here. As I have an illness that will soon end my life, it doesn’t matter much in my case. Unfortunately, there are too many “Joe Numbskulls” left……but with enough cracks on their heads, they might wake up. I call them full of Denial, but I like Squodgy’s term much better.


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