Best China Info is most pleased to be able to re-publish this perspicacious, thoughtful, insightful article by TrutherPandemic
China’s Cease and Desist order to IPO of Jack Ma’s Ant Group: China just deactivated a financial nuclear bomb by asking Jack Ma’s Ant Group to cease and desist its IPO plan, the largest IPO ever attempted.
Jack Ma has been playing the leverage game to the extreme. The Wall Street sharks only played the leverage game to the extent of lending 40 times beyond the bank capital but Jack Ma pushed the degree of leverage to 120 times at one time.
He is lending at the usury rate of 15-20% to the poorest people in China, mainly the young, ie, China’s Ninjas (No income, no job, no asset) who are unable to get a loan from traditional banks.
Normally this group of people are unable to pay back but nobody dares to default against Jack Ma, because he has a secret weapon the Sesame Social Credit System. There are lots of articles in Western press on China’s so called Orwellian Black-Mirror style Social Credit System which allegedly punishes those who criticise the government.
Once again western media are deliberately misleading its readers. China’s current main Social Credit system is operated by Jack Ma which he shares with the society at large. Those whose personal freedoms are limited, ie, forbidden to travel by luxury means and buy luxury assets are those who do not pay their debts, and in particular those who don’t pay Jack Ma’s debts.
Those who don’t pay Jack Ma’s debts are as well as socially dead.
They can’t use Alipay which belongs to Jack Ma as well, the most popular means of payment; they can’t make purchases on Taobao, can’t take out loans anywhere etc… They can’t even beg, because in China, nobody uses cash these days. If a beggar doesn’t have Alipay, he can’t receive alms! So Jack Ma confidently reassures his Wall Street investors, “As long as the borrower is alive, he/she will pay.”
So Jack Ma is lending out 300 bn US$ a year at the rate of 15-20% to the poorest people in China and the default rate is only 1%. Currently Jack Ma only puts up 1/50 of the capital. The rest of the money comes from ABS (Asset Backed Securitisation), ie, he sold the debt obligations to the society in the form of CDO (Collateralised Debt Obligation). He is doing exactly what the Wall Street sharks were doing leading up to the subprime financial crisis…
The odd thing is that no Western press is reporting on the immense financial risks of Jack Ma’s dubious operation. The Guardian article, (again written by the liar Lily Kuo who made up the story of the Uighur state orphanage which I debunked) is attacking the Chinese government for cracking down on China ‘s private business… But what kind of private business is that? Was the highly leveraged ABS/CDO business of Wall Street leading up to the subprime crisis private business which a responsible government shouldn’t regulate?
Even Financial Times, a supposedly serious financial journal joins the propaganda to blame the move on President Xi Jinping wanting to show Jack Ma who is the boss… So the order of cease and desist of Jack Ma’s IPO is the evil doing of a dictatorship. These newspapers are supposed to provide bona fide authentic information to investors to allow them to avoid traps but rather their role looks likely to deliberately mislead investors.
They failed to report on the danger of the Wall Street subprimes prior to 2008. This time instead of warning investors of Jack Ma’s unethical, extremely risky but wildly lucrative operation, they prefer to attack the wrong target: the Chinese government who is doing its job, ie, put a stop to Jack Ma’s financial nuclear bomb, and to protect consumers and investors, a perfectly legitimate move which shitty Western journals like Guardian and FT made into a crime.
The annual profitability of Jack Ma’s Ant Group achieved 200%, beats all existing businesses in the world… His investors include Sovereign Wealth funds of Malaysia, Singapore, and Canada, Wall Street banks… The funds Jack Ma received intended for the purchase of the shares of the IPO of his Ant Group is equivalent to one year’s GDP of Britain…
So much at stake yet no Western newspaper is reporting on the potential risks for the investors... There’s definitely some collusion between China’s oligarchs, Wall Street and the Western Media.
One wonders why Jack Ma is allowed to come this far. Obviously he has a very powerful lobbying group behind him and he’s obviously doing some high tech big data stuff which is supposed to be revolutionary which nobody really understands. He boasts he can reduce the risk to non existent by using big data in his possession to target with precision the extent a person can take on a loan at the usury rate and thus make his ponzi scheme sustainable.
The Wall Street sharks immediately realised that Jack Ma is a master blood sucker who plays at a much higher level than them. So Jack Ma has been given a pass in western media and his Wall Street shark bros are patting him on the shoulder. Jack Ma is undoubtedly the master con man.
Jack Ma kick started China’s E-commerce to the extent that 30% of a Chinese person’s social economic life revolves around his companies allowing him to collect vast amount of information on every individual which he uses to make more money… Jack Ma is running China’s widely publicised and decried Social Credit System, because only he and he alone has access to this kind of data. Chinese government also raised the issue of Jack Ma’s violation of personal data which Western press conveniently failed to mention because this doesn’t fit into their narrative.
Chinese government intends to enact a law to reign in Jack Ma’s online lending operation. He’s urged to put up at least 20% of the capital lent out and to further limit the risks, now every individual online bank’s business scope is limited to the province where it’s registered. Now each borrower can’t borrow beyond 30% of his/her income..
With all this, the volume of lending of Jack Ma will be cut to 5% of his former scale (hitherto lending to 500m poorest people in China) which is for the better. The potential risk of his operation is Wall Street subprimex3, not very sustainable. After the pandemic, the world can do without another 2008 style financial crisis.
China’s performance during the Covid19 was irreproachable but still the US/West wanted to hold China accountable. Imagine if a financial crisis happened because of the inaction of the Chinese government! Now all the Western press condemn the Chinese government for ‘erratic crack down’ on Jack Ma. When the crisis arrives, they wouldn’t hesitate to blame it on the Chinese government. They would run titles like :
“China’s dictatorship has unlimited power over its businessmen. China failed to apprehend its financial criminals due to government corruption and the world suffers. China must pay.”
One thing is sure. Jack Ma’s company has become too big to fail. If Jack Ma crumbles, the Chinese government will be hijacked into organizing trillion dollar salvage package to save China’s and the world’s economy.— @TrutherPandemic
With such a risk looming, Jack Ma’s vast conglomerate is preferably to be dismembered.
It’s not because Jack Ma threatens the CPC rule, rather his size and his way of operation have become a huge hazard to the society.