liyeifiMuch feted Yifei Li is in police custody following rumours of malpractice in China

“Chinese investors and regulators are beginning to understand that actually a hedge fund is about hedging,” Yifei Li (left) chairperson of hedge fund Man Group Plc’s China unit, explained recently. Unfortunately, there seems to have been a breakdown on the ‘understanding’ dimension, as yesterday she was taken into custody by Chinese authorities, who allegedly suspect her of something profoundly illegal.

When I read soundbites like the one above from Ms Yifei, the scales fall from my eyes about how brave females smash their expensively coiffured heads through the Looking Glass ceiling. Because while most of you probably thought up until now that Hedge Funds might be about, say, funding, you’d be wrong. They are in reality all about hedging. And shorting, directionalising, carpet-bagging and then insurance-demanding.

Man Group is a corporate name associated in many minds with Bernie Madoff, who ran a scam for donkey’s years and then made off with all the money. In 2008, Man invested a third of a billion dollars in two funds exposed to Madoff Securities, and was thus a bit unhedged when it all went belly-up.

At the time, Man had signed up to the Hedge Funds Standards Board to encourage best practice, an outfit that must have spent hours debating the meaning of the word ‘best’ in the context of hedge funds. Given that Man had held the raped Madoff funds for some ten years, it rapidly became the epicentre of impertinent questions about duty of care to its investors.

But let us not knock Man Group, for it has an illustrious history. In 2006, Man Group PLC’s U.S. brokerage and seven of its employees were sued for fraud and racketeering by a court-appointed receiver seeking to take back investor assets lost in the collapse of a $230 million Philadelphia hedge fund. And as recently as May 2015, 42% of investors rejected the company’s remuneration policy, while 34% voted against its remuneration report and a further 2% abstained.

Ah yes, all the tell-tale signs are there: insider knowledge, fraud, massive salaries. I have to say, I am increasingly seeing the Chinese crackdown on shadowy banker folks enriching the already insanely rich as not so much repression as rounding up the usual list of suspects who perhaps should’ve been rounded up long ago.

Yifei Li, I am reliably informed, will face charges of ‘illegally directionalising’ already volatile Chinese markets in order to achieve client gain to the detriment of China. As long ago as 2001, Yifei Li was selected as one of 25 Rising Star Leaders for the Next Generation by Fortune and was on the cover of Fortune Magazine. From 2001, for four consecutive years she was selected as one of the 50 Most Powerful Women by Fortune magazine. She was also selected as one of Ten Women to Watch in Asia by Wall Street Journal in both 2005 and 2006.

And now she has been selected by the Chinese State Police. This lady is a big fish: one hopes that Beijing knows what it’s doing.


  1. @ Hieronnny. Yes very apt. She may ( or may not !) like it up her . But Fifi Yifei is much much more attractive than Fifi Lagarde….. perhaps she should take over as IMF head once out of choky.


  2. To understand the present reality, it’s imperative to understand the past:
    Google: Bill Still Money Masters
    A 3.5 hr documentary on the history of money, wars & politics, with particular focus on the Rothschilds.


  3. China is well p155ed because Washington won’t give them a bigger say in the IMF, particularly regarding SDR inclusion and has taken matters into its own hands.
    It has sold an estimated $100bn plus of US treasuries in order to weaken the Yuan. Another similar devaluation will boost the $ index further which will, in turn, in the short term, suppress the paper price of gold. (Buy?)
    China has also made a change in the accounting of their gold reserves by deciding to mark them to market so that their holdings will not be set by a government fix. For instance, the value of the gold at Fort Knox and elsewhere, is set by the Fed at roughly $42 per oz, and has been since 1973.
    It looks like the Europe and Asia agreement to form another world reserve currency may involve the yellow metal.
    The US will not like this at all. As John wrote, one hopes that Beijing knows what it’s doing.


  4. @KJH

    We are moving into surreal territory because if China accepts the current status quo then it does so as a subservient nation to the USA. So what we will see is China moving in ways to curb USA expansionism and aggression because to ignore it is to become that subservient nation.

    Can you blame China? Not really … Is it wrong? Nope …


  5. if you have 100 million pounds then the very best hedge funds will allow you to join. The are the best because they have the fastest computers the best programs and are located near(to trade faster) the stock exchange. These three factors can peel off millions as the market fluctuates.

    This has nothing to do with investing and should be banned.


  6. Yes, something going on here! Oil down 2.5% early on, then US markets open and the price ramps to 7.5% up as of now.
    A 10% move in one day has to be a near record, this smells of Central Bank or coordinated action of some sort involving $100s of Billions.
    John, what’s going on, please give us your thoughts?


  7. Breaking:
    Another huge blast at a chemical facility has reportedly occurred in the Chinese province of Shandong. The explosion, located in an industrial zone in Lijin, Dongying City, happened late on Monday, China’s People’s Daily reported.
    The blast was so massive it could be seen and heard from a great distance. A chemical factory is believed to have been in the area. According to People’s Daily, the blast happened at around 11:30pm local time (3:30pm GMT).
    Which prompts me to repeat a link from a few days ago from Caratacus


  8. It seems that numerous others have been arrested for ‘spreading rumours’. No doubt the Chinese politburo and others will find plenty of excuses to apply scape goat semantics in order to keep the global shell game rolling while it suits them. Whether or not this will have the slightest impact on the course of events is a very different matter: the emperor has been exposing himself for some time now, one would have thought he would realise that naked shorts are a very poor cover up.


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