China's Real-Estate Ponzi scheme, revisted

Mish did a pretty good write up on China's "Shark Loan" Ponzi scheme yesterday. Essentially is suggests that a great deal of China's internal economic growth has been fueled by a scheme where people take out Home Equity Loans against houses that have ballooned in value over recent years. They then loan that money back out to "Shark Loan" entities at higher rates of interest.

Much of this relies upon China's "shame" based culture, where severe loss of face (and maybe limbs/digits.. ;0) is incurred when a loan is not repaid.

This also corresponds when one of Mish's articles discussing the pressure Chinese men feel in buying their own homes. It seems that Chinese women won't date a man who doesn't have the "nest" already lined up for their future spouse. What incredible pressure these poorly paid men must be feeling in a country where men already outnumber women.

Chinese gold diggers say "show me the house"

Be sure to check back later.. I may add to this post.

Aug 2nd, 2010 EDIT:

Interesting new reports of growing civil unrest in some Chinese cities over the collapse of Real Estate Ponzi Schemes:

Chinese gov't fear civil unrest over collapsed Ponzi schemes

Scrutinizer