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Ghost collateral...Ghost inventories..
Topic Started: Sep 18 2012, 09:21 PM (216 Views)
LTC8K6
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Assistant to The Devil Himself
http://www.zerohedge.com/news/how-chinas-rehypothecated-ghost-steel-just-vaporized-and-what-means-world-economy

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Chinese banks and companies looking to seize steel pledged as collateral by firms that have defaulted on loans are making an uncomfortable discovery: the metal was never in the warehouses in the first place.


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As defaults have risen in the world's largest steel consumer, lenders have found that warehouse receipts for metal pledged as collateral do not always lead them to stacks of stored metal. Chinese authorities are investigating a number of cases in which steel documented in receipts was either not there, belonged to another company or had been pledged as collateral to multiple lenders, industry sources said.
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kbp

That's why it costs so much for an audit by CPA's; they're to verify assets and and insure their signature representing the accuracy of the accounting provided.

Of course China is a little more complcated. Who does the accountant work for, who owns the insurance company, who owns the bank....?
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Baldo
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EnRon paid a lot for their audits. Sometimes paying for audits is not what your paying for.

Hinky Dinky Accounting. The promotion of false information is a serious problem facing us. We have a US Govt that hasn't passed a budget for 3 years. We have a Fed creating money out of thin air to buy Treasuries because the world does not want them. But there is no independent audit on the Fed released to the public.

I expect no difference in China. We know Greece lied. The State of California lies.

It goes on & on.

Edited by Baldo, Sep 18 2012, 10:37 PM.
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