China == terrible credit situation.
China == 60 bil sq.feet in high rise construction going on, 30 billion of which was being used for for office and mixed use.
"So China to us started in an examination of the global iron ore companies and has morphed into a reasonably diversified portfolio of property companies, developers, cement companies, steel companies, as well as the original iron ore minors in Australia and Brazil. And now the Chinese banks too, because as we did more and more work we discovered that the Chinese banks are the nexus for what all of this credit driven investment is flowing."
china due to bad credit makes Greece and Spain child's play --
when you get to the micro of chunese individual companies, they look even worse(accounting is horrible, they all seem to have negative cash-flow, noncollectable receivables, they all seem to not earn their cost of capital )
So as you dive deeper and deeper into the individual ideas, they appear to be even better and better (for short selling)."
China == banning short selling.
"One of the new risks we have had to contend with is the short selling bans."
institutions that short the shares of banks and financial companies and purchase cds == are other banks and financial companies because of the interrelated nature of their credit risk.
stop the short selling == bad
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