Thread by @Michael7ucci

🚨Bridgewater Cashes Out of Communist China

The world's largest hedge fund just dumped their China stocks.

Bridgewater isn't just big. It's founded by Ray Dalio, who maintains close and cordial relations in China.

What might make them sell? 🧵
scmp.com/business/china…

For starters, China stocks have performed horribly.

Bridgewater sold the MSCI China ETF, which is down 17% over 5 years.

The US SP500 is up 90%+ in the same period.

2/

Bridgewater also sold over $1 bil in U.S.-listed Chinese stocks like Alibaba.

U.S. officials have warned they might delist these stocks for being shell cos that fail to comply with U.S. audit standards. The stocks would fall and be less liquid.

3/
wsj.com/finance/stocks…

There is also the risk of sanctions, civil actions, and other legal risks.

Bridgewater sold PDD (Temu), which is under investigation by NE AG @mikehilgers and AR AG @AGTimGriffin for data theft. There are also accusations of slave labor.

4/

wsj.com/opinion/nebras…

Another factor is that Ray Dalio has transitioned out of Bridgewater. He is one of the most prominent long-term bulls on China, and maintains close ties with CCP officials.

5/

marketsgroup.org/news/ray-dalio…

State AGs are also looking into the fiduciary malfeasance of pouring client capital into China.

This Feb, @MTAGKnudsen led 17 AGs in probing large US asset managers for their misrepresentations & mixed motives for investing client cash in the CCP.

6/

dojmt.gov/attorney-gener…

Perhaps Wall St. is finally getting religion on China.

@StateArmor's CCP Divestment Report concludes that fiduciaries cannot fulfill their duty of care wrt China-based investments.

7/

5zkb87.p3cdn1.secureserver.net/wp-content/upl…

Hayman Capital's @Jkylebass puts it best. Investing in China is investing in fantasy football shares.

"You have no claim on any assets. Just imagine owning a fantasy football share in an economy run by a communist gov't....in the end, you're going to lose everything."
/end