 Hey guys, it's MJ the student act tree and I've been studying for one of my fellowship exams And I see that one of the syllabus objectives is that I need to understand the Chinese market But I've just been thinking does anybody understand the Chinese market? I mean, I don't even know if the government there understand their own market. I mean China is huge But it's also quite secretive I mean they make it very very difficult for foreign capital to come in and they make it very very difficult for Domestic capital to go out and that might be one of the reasons why Bitcoin's value has gone so high is because people can buy Bitcoin in China Then leave the country and sell it offshore and you know beat that whole capital flight protection thing But what I want to talk about in this video are two crazy stories that I've come across while Researching China in an attempt to understand it for my exam And the one is of this businessman who paid some private equity company a billion dollars You paid them a billion dollars will invest a billion dollars with them Only to discover 14 months later When trying to contact them and say hey guys, how's my investment doing? They're like you you're not an investor and he's like no no I am I I gave you guys a billion dollars I did the whole little tour. I saw all your little projects Why are you saying now that I'm not an investor and they look also so on our records? You're not an investor, and I just think this is this is so crazy I mean imagine going into a deal for a billion dollars and not even getting like a receipt or Or anything to prove that you actually did invest in it So I thought that was quite crazy, but the other story The other story dwarfs that one totally and that is around the Chinese Corporate bond market. So corporate bonds are when businesses raise loans and debt and traditionally a corporate bond is a lot riskier than a government bond Specifically if it's a corporate bond of a very small company But now what some guys were doing were they were buying corporate bonds of companies that were unable to pay their debt So these are known as junk bonds but then what they do is they buy all these junk bonds and they Create a forgery of an embedded option or a credit Guarantee so what they do is they buy these bonds that aren't gonna pay back But then they forge a document saying that this other bank or this other institution will guarantee The payments if this company defaults So this is just like a little document. So forget going and trying to forge You know money where it's got all that difficult artwork and they print some weird paper You have to try get it's quite a big mission to do so These guys just forged one document and they go and they slap it onto the bond and they go to investors And they say hey listen here guys You can get a much higher return if you buy these bonds and the investors like oh, look they've got this guarantee So even if they do default, I'll still get my money and investors go and they buy Billions and billions billions of dollars worth of these these corporate bonds that are actually junk That have got these you know fake Credit guarantees and then you know what happens is that these bonds do default You know these companies they are junk so they can't repay it and then the investors come to the the company They're supposed to provide the credit guarantee and they're like No, we we're actually we didn't actually sign that document They're like no, but yeah, you did you did and they're like no, that's that's actually a forgery So I'm just amazed at I mean I've never ever heard of a forgery being done with a credit guarantee But if you think about it from a criminal's point of view, it's something so easy and simple to do But again, I'm surprised that these investors who are pumping billions and billions into these securities are not doing They do diligence to understand, you know, whether these bonds had it or not and a much of they sold these two International investors who then got like really excited They were like oh, this is our opportunity to get into the Chinese market because a lot of these businesses One you're getting to the Chinese market because China offers good diversification, you know They're not correlated to the rest of the world's markets So investors are almost too greedy to get their hands on anything Chinese That they're not doing the due diligence process and they're getting scammed on an epic scale But anyway, those are just two crazy stories that are highlighted or that I found I'm sure as I do more research I'll come a come across a few more But I thought no, I just have to share that with you guys But anyway, I'll keep you guys up to date and I'll be releasing a whole bunch of videos on the weird and wonderful things I find while studying for my financial fellowship and then once that exams done I'm gonna go back to the statistical and mathematical Subjects and I'll get those videos done for you guys But if you have any questions, please feel free to leave them in the comment section below and I'll do my best to answer that Thanks guys for watching. Cheers