| By Matt O'Brien China's richest man lost half of his wealth in less than half an hour last year. It turned out that his company Hanergy may well just be Enron with Chinese characteristics: Its stock could only go up as long as it was borrowing money, and it could only borrow money as long as … | | |  | | | | The latest economic and domestic policy from Wonkblog | | | | |  iStock By Matt O'Brien China's richest man lost half of his wealth in less than half an hour last year. It turned out that his company Hanergy may well just be Enron with Chinese characteristics: Its stock could only go up as long as it was borrowing money, and it could only borrow money as long as its stock was going up. Those kinds of things work until they don't. The question now, though, is how much the rest of China's economy has come down with Hanergy syndrome, papering over problems with debt until they can't be anymore. And the answer might be a lot more than anyone wants to admit. Although we should be careful not to get too carried away here. Hanergy is now a nothing that used debt to look like a very big something, while China's economy actually is a very big something that is using debt to look even bigger. In other words, one looks like a boondoggle and the other a bubble. But in both cases, excessive borrowing — especially from unregulated "shadow banks," such as trading firms — has made things look better today at the expense of a worse tomorrow. In Hanergy's case, there will, of course, be no tomorrow. Read the rest on Wonkblog.
Chart of the day Legalizing marijuana could create $28 billion annually in state and federal taxes, according to a new study. Christopher Ingraham has more. | | | 
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