Growing up, I used to occasionally play basketball with a guy by the name of Eddie Stokes. Eddie was a few inches shorter than me, but a heck of a lot stronger and quicker and he used to give me fits. What particularly irritated me about him was that every single time he would score against me (or anyone else), he would point at me and say “money….so money” Though Eddie was a nice guy, every time he did that, I wanted to punch him. But seeing as how he was a golden gloves boxer (and apparently 1-0 as a professional), I was smart enough never to do that.
I thought of Eddie for some strange reason today when viewing the “China Money Podcast” site for the first time. I was directed to this site by a China Hearsay link-over to a podcast by China Hearsay’s Stan Abrams on Variable Interest Entities. The podcast is called “Variable Interest Equity is a Very Risky Structure” and it is excellent.
Stan knows VIEs and, even more importantly, he and I see pretty much eye to eye on them. To grossly summarize our positions, we are both wary of VIEs and particularly of the idea that they are risk-free. If you want to listen to Stan discuss VIEs and the risks (and rewards) inherent in them, I urge you to check out his podcast here, or go here for the iTunes version.
Stan has written extensively and well on VIEs, including the following:
- Reading the VIE Tea Leaves
- Buddha Steel, VIEs and Legal Ethics: Part I, the Internet Years
- Buddha Steel, VIEs and Legal Ethics: Part II, Man Discovers the WFOE
For even more on VIEs, check out the following CLB posts:
- Variable Interest Entities (VIE) In China. What Would The Buddha (Steel) Say?
- Gigamedia And The Perils Of VIEs. Dude, Where’s My Chop?
- Crouching Tiger, Hidden Fraud. Clear Speaking On VIEs
How do you feel about VIEs?