China's Wealth Management Products

[Der Amf]

I heard of these about five minutes ago. Here's the Wikipedia page:

A wealth management product is an uninsured financial product sold in China by banks and other financial institutions. Typically they offer a high rate of interest, and, sometimes, guaranteed return. As of 2016, $2.8 trillion had been sold by banks during the previous 5 years. While the government sometimes intervenes to prevent losses by investors, some have failed.

Financial experts such as David Daokui Li of Tsinghua University, a member of the Chinese central bank’s monetary policy committee, believe wealth management products pose a substantial danger to China's financial stability.

Wealth management products grew rapidly throughout 2015 and 2016. Chinese households, companies and banks held a record balance of $3.9 trillion (26.3 trillion yuan) of wealth management products as of June 30, 2016.

Here's a NYT article on them: https://mobile.nytimes.com/2016/08/1...wikipedia.org/

What might not go wrong with them?

[crazyp]

The TT Horological clinic just recommended them to me as the next CDO, best go all in

[Ribena36]

Very interesting! Keeping an eye on these could provide a good warning signal for next downturn....


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