Wealth Management Products (WMPs) in China are used as investment vehicles by individuals, into assets like stocks, corporate bonds, derivative products and so forth

  • But now the WMPs are more and more investing in each other
  • Estimates of this are around $396 billion

Uh-oh. A bad investment by one WMP could now leach into and infect another one, or more.

The big risk is that:

  • In the event of widespread losses, cross-ownership will create more uncertainty over who's vulnerable -- a key source of panic in 2008 when soured U.S. mortgage securities triggered a global financial crisis.

In case you were having a good day, chilled out about the prospects for a resurgent China ... Bloomberg has more :-D

Haven't heard this for a while