Economist speak or cluelessness

I came across this beautiful quote the other day in Michael Pettis’ Blog:

Needless to say 80% is a pretty high cost of funding, and almost certainly requires rising real estate prices in order to be economically viable. In case of an economic contraction or declining real estate prices, I would assume that a lot of these real estate developers would face severe debt-servicing difficulties. We discussed what would happen in the case of a default – besides the proverbial visit by the man with a baseball bat he suggested, with a completely straight face, it was also likely that one of your kids might be kidnapped.

This kind of collection process strikes me as a reasonably strong argument for lower default rates in the Chinese informal banking sector

I must say, I had heard Pettis and other economists talking about the “informal banking sector” several times previously, and I never put together that I should replace term “informal banking sector” with “the mob.” I’m not sure if that’s personal cluelessness (what else could it mean?) or whether other people had a similar problems.

The Economist recently had a piece on the Japanese pseudo-formal banking sector, which has recently become formalized to prevent life insurance+suicide equaling debt repayment…

God..