"banking/accounting/legal firms behind them" "Hard to understand"
Years ago I wondered how these tiny US CPA firms audited Chinese stocks when the US firm had no Chinese language employees. The 10Ks never explained how that worked.
Only years later -- and partially thanks to Muddy Waters type shorters -- did the truth come out. The US CPA, sometimes even Big Four, partnered with Chinese firms that they often knew nothing about. An utterly flawed arrangement.
As for banks "behind them" we've seen a number of cases where Chinese bank statements have been faked by slipping a bribe to a teller in a tiny rural branch. It's gotten so that smart US auditors now only accept account balance information from an executive in the bank's HQ.
We've also learned that there's no effective legal remedy for US investors who lose money due to Chinese fraud. It's simply impossible to collect a court judgment against assets in China.
"Fear and loathing" Nah, these are stinkin' scams, When exposed, most pack up and are never heard from again. Sure there's fraud among US stocks (although almost never on the NYSE post-Enron), but the real firms bounce back.
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The beauty now is that the big shorters have created networks of researchers (or spies) inside China to detect shams.... often years before the SEC would pick up on the problem, and usually only from an investor complaint AFTER money was gone.
Can you point me to a Chinese stock you've made money in over a long term?
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Because the Good Life is Just a Pump or Two Away
