The Jordan Harbinger Show - 476: Dan David | Putting Muscle on the China Hustle

Episode Date: March 2, 2021

Dan David (@Dan_David44) is an investor, activist short-seller, and whistle-blower. He is the founder of Wolfpack Research, host of the I Hung Up On Warren Buffett Podcast, and is featured in The China Hustle documentary. What We Discuss with Dan David: Dan defines what it means to be an activist short-seller, and how his research discerns between legitimate but worthwhile risks in the market and outright criminal fraud. How Chinese companies use reverse mergers to trade on US markets without oversight and siphon hundreds of billions of dollars from the economy without accountability or criminal consequences. Why the US government allows this legalized corruption to continue (with the blessing of investment banks). In the end, who really suffers in the fallout of these reverse takeover (RTO) scams. The long-term dangers of allowing this fraud to continue, and what Dan sees as our way out of this mess. And much more... Full show notes and resources can be found here: jordanharbinger.com/476 Sign up for Six-Minute Networking -- our free networking and relationship development mini course -- at jordanharbinger.com/course! Like this show? Please leave us a review here -- even one sentence helps! Consider including your Twitter handle so we can thank you personally!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Coming up on the Jordan Harbinger Show. So we hired our own team to go look at 30 companies to prove that the short sellers are lying and are wrong. And our team came back after like, you know, two months looking at 30 companies. And they said, yeah, the short sellers are wrong. They're understanding the problem. Fraud is pervasive. It's out in the open. So we went to the banks.

We said, look, this is what you're missing. We can ramp up a robust due diligence team to vet any of these deals because I'm sure you don't want to sell these deals to the market that are frauds. And they're like, hold on a second. You want us to pay you not to represent these companies. Because if you come back and say they're a fraud, we can't collect transaction fees. Welcome to the show. I'm Jordan Harbinger. On the Jordan Harbinger show, we decode the stories, secrets, and skills of the world's most fascinating people.

We have in-depth conversations with people at the top of their game. Spies and psychologists, astronauts and entrepreneurs, even the occasional four-star general Russian spy or economic hitman. each episode turns our guest's wisdom into practical advice that you can use to build a deeper understanding of how the world works and become a better critical thinker. If you're new to the show or you're looking for a handy way to tell your friends about it, we now have episode starter packs. These are collections of some of your favorite episodes organized by popular topics to help new listeners get a taste of everything that we do here on this show. Just visit jordanharbinger.com slash start to get started or to help somebody else get started. and of course, I always appreciate that. We do work hard on the show, and the more that listen, the merrier.

Today, my friend Dan David, he is an activist short-seller. We're going to blow the lid off one of the most insidious investment scams around right now, the reverse merger. Turns out billions of dollars in values being stolen from you, from me, from everyone you know, by overseas companies who merge with a shell company here in the United States and then trade on our stock exchanges. Today, activist short-seller Dan David joins us to a commercial. explain how he's exposing fraud in the market, what these frauds look like, how they operate,

and explore the damage they're doing to the U.S. economy and mom-and-pop retail investors, just like you and I, all across the country. If you're not interested in investing, I get it, no worries. This is more like a true crime episode than a technical investment show. There's something in here for everyone. I think you're really going to dig it. And by the way, yes, the perpetrator is the Chinese Communist Party, so it's a little bit anti-Chinese Communist Party, but it is not anti-Chinese.

and I always want to make that distinction. Many of the shows we do here, point the finger at one country or another, including the United States, but don't email me about how I'm racist or something. You're going to lose that battle. This is about the Chinese Communist Party, so the government, not the people.

People are always just as much victims of their government as anyone else. Again, I think it's a fascinating case study. Don't push it aside just because of wokeness or a misunderstanding. By the way, if you're wondering how I managed to book all these great authors, thinkers, and creators every single week, It's because of my network. I'm teaching you how to build your network for free over at Jordan Harbinger.com

slash course. And by the way, most of the guests on our show, they subscribe to the course and the newsletter. Come join us. You'll be in smart company where you belong. Now here we go with Dan David. I'm curious, and a lot of people don't know what this is. I worked on Wall Street. I sort of know what this is, but I'm not super familiar other than watching the occasional Netflix

or watching the China Hustle on Amazon Prime, which is how we met in the first place. and I'll link to that in the show notes. But what is activist short selling or an activist short seller? What is this? Well, you know, that's a very good question that almost nobody has asked over these past two weeks during this GameStop saga. And it's a super relevant question because you look at Melvin Capital that lost $3 billion on the GameStop fiasco.

And are they a short seller? I don't know. They're long and they're short. They do both. most hedge funds are long short. It's the nature of a hedge fund to arbitraised risk, although inarguably, Melvin Capital did not do that. An activist shortseller like myself is somebody that really focuses in on one company generally at a time and then goes public with my findings. So it's not as if I have $10 billion across 15 companies that are short and then a long book that hedges

that. I'm going all in after generally a fraud and I'm getting loud about it and releasing my research because, you know, the history is, and I think you saw from researching me, I was lied to throughout the early 2000s by investment banks without knowing it. The only real research that was available is collusive research through the investment banks that have a vested interest to say positive things about a company so that their bank will get the financial services. Now, that's supposed to be illegal, but it's the biggest joke on Wall Street. Of course, the analysts are in on it. So we do our own research, often spending months, sometimes years, tens of thousands, if not hundreds of thousands of dollars, finding out what's going

on in whatever country it's going on, getting inside the factory. I mean, something you're never going to hear from an investment bank analyst. Where did you find that document in a landfall in Kuala Lampore? that only an activist shortseller will say. That's how far we go. So these banks, and I used to work as a real estate finance attorney, so I kind of get it, right? Like we're securitizing subprime mortgages, creating investment vehicles that people can buy securities in, and the investment bank that's my client at that point isn't going to go, yikes, man, look at all these bad mortgages that are in these loan pools. This is a real liability. We should disclose that in the report and make sure that that is something that everybody knows about when they're buying these securities. They say, yeah,

there's probably a lot of risk in there. But let's talk about how much upside there is. Let's talk about how it's probably impossible to fail because there's literally like millions of mortgages in here and they're not all going to fail because that would just take an act of God. So let's just not even worry about that. And hey, lawyers, can we kind of get away with doing that? And then the legal guys, the compliance guys say, yeah, I mean, the chances are really slim. So we can just either not say that or we can say the chances. are almost impossible that this will fail. And then people will ignore it. And then they'll buy this security. And then when they buy this security, the whole economy will crash. But you know what?

We don't really have to, we don't really have to focus on that. Right. And you're saying, your job is to do a bunch of extra research and go, hey, by the way, the odds of this failing, while they said it's slim to none, it's not really because like two thirds of these mortgages, the people who have the mortgages, they can't afford these mortgages, not even close. If anything happens, if some, if the economy sneezes all the, people are getting sick and it's a critical mass inside the securities vehicle that people buy, and the price is going to crash, which is going to take down the investment bank, which is going to take down the economy with it because it's more than one investment bank,

which is exactly what happened in 2008, kind of a super summary there. And you're finding out this information that people don't want to hear, right? Down came the hand of God. Right. In 2008, you know, it's an act of God, sure. No, it's an act of Congress, actually, and it's an act of our policy and our policy makers that made that happen from straight from the repeal of Glass-Steagull in the late 90s. But, you know, we digress. What I do is even more focused than maybe looking at the credit derivatives market, which for banks, that was always a way of winning on both sides. I mean, they love that scenario of a can't lose, right? If it goes down, I win. If it goes up, I win. It's just that those wild swing.

one way or another will get the banks and that's what happened. And then we took banks too big to fail and made them bigger. So, no, I'll take one company and say, okay, this is what you disclose that you do in your filings and your press releases and really just go sit on it, right? And film their factory for months at a time, as I think you might have seen. And if you say you have 50 trucks a day coming in and out, well, we're counting. Do you have 50 trucks a day coming in and out. And what we found in some cases, especially with a China-based company, where it's not illegal to steal from a U.S. citizen. Amazingly, after 10 years of working with Congress trying to point this out, it's still not illegal for a Chinese citizen to steal from a U.S. citizen.

And now we have like $1.5 trillion worth of their companies listed on our exchange, any of their CEOs committing a crime. It's not a crime where they're at. And we'll see that there's five trucks coming in and out of these facilities in seven weeks. And what happens? Well, eventually the stock's going to crash, but nobody goes to jail, nobody pays a fine. You can't get your money back out of China. There's no clawback provision between our countries, no reciprocity, and money's a one-way ticket there. It just goes and it's gone. And this has cost us hundreds of billions of dollars and still does. So we'll get to all that and unpack all that. So if people are like, wait, what? You know, don't worry. We're getting there. I want to know how you got interested in China.

the first place. I mean, what was the first red flag, no pun intended, that something was not right and that the emperor had no clothes with some of these Chinese companies that you were looking at, or these American companies that had merged actually with Chinese companies? Well, a lot of them were American just shells, right? The RTO process you're talking about, the reverse takeover where there's an empty shell of a company and the China-based company will just merge into it, sure. So let me sort of explain that for the listener. So basically, I have some T-shirt company that is traded on the stock exchange, I'm retiring or out of business for the most part. The shares are two cents each because I still own a bunch of stuff. And then a Chinese technology company that has nothing to do

with T-shirts necessarily might be a coal mine says, hey, why don't we merge? And that way our Chinese coal company can be listed on the stock exchange as Jordan Harbinger's T-shirt Co. And then suddenly my stock starts going crazy because investors get wind of it and go like, hey, this company's there. And What the reverse merger does is instead of this Chinese coal company coming in and saying, hey, SEC, we need you to look at all of our disclosures and documents and make sure that this is legit so you can list us. You just merge with my T-shirt company, which has already passed all of the disclosures and everything. I'm already listed. I'm already trading. So nobody's really looking at this, except the problem is the coal company in China is basically just a bunch of

BS. And my T-shirt company has taken on all of their assets that don't exist, except investors in the U.S. don't really know that. So it looks like I'm this big coal company that's listed on the stock exchange and it's safe to invest in because the SEC must have looked at it and the broker must have looked at it and the bank's must have looked at it and the law firms must have looked at it. But the truth is, I just took on a bunch of hot air and bullshit from overseas and now you're buying into that bullshit thinking it's an American company. Is that kind of what's going on? I mean, yeah, in a way. And I would say that the law firms, the banks, these are just fee collectors. They're not looking at anything but collecting their fees.

the SEC tries its level best, but when you've got the markets and trading division has got 450 employees handling 20 trillion in transactions. I mean, it's just, they're outmatched and they can't be blamed for everything. And when you talk about the T-shirt companies, really kind of what happens is there's two T-shirt companies, right? They're both listed on the exchange. One buys out the other. So now you have one company. What's left over is the shell, the trading shell of the acquired company. And it's dormant. And it's kind of sitting there. And that shell, that trading shell, is worth like $200,000 or $300,000, something of that effect. And you can, yes, you can inject your coal mine from China right into that shell,

and boom, you're a trading company the next day, rather than going through the IPO process, which is, you know, supposed to be more rigorous. You know, I can make arguments for the Jobs Act watering that down or the new thing you hear about SPACs, the special acquisition company, I mean, blank checks. They're just, you know, they're another way of doing the RTO without using that name. But that's kind of how it happened. They just reverse merge into this empty shell. Okay. So bring Chinese company to the United States, list company on United States stock exchange using the reverse merger to essentially avoid scrutiny from the SEC. Pump the stock. The banks will, you know, the law firms, all these companies, the investment

bank will pump the stock, sell it to their network of investors. And then I, I, they divest their own interest once it's inflated and just leave all the investors holding the bag. Is that kind of the rest of the model? Yeah. I mean, getting back to your earlier question, how do you, I'll answer that at the same time. How did I get interested in this? Well, you know, in 2008, you know, September, October, that was, it was a tough time you might have heard. And, you know, we'd lost quite a bit of money. And, you know, we decided that this was an anomaly in the market and that value investing was the way to go, right? The Buffett thing, you know, you just find value and you invest in it. By 2009, the best values were China-based U.S. listed companies.

I mean, you looked at 100 of these things, and they're showing year-over-year growth of 100% revenue growth, EPS growth. They have margins that are 20% better than competitors around the world. And I'm just, you know, you're just so impressed. We put everything we had into China stocks long. and we're down like 80% going into 2009 from just those two months in September and October of 2008, got it all back within a year, picked up 229% in 2009 long China stocks. And then some people started to say, I would go to these investment conferences. You saw some of them, you know, in the China Hustle movie. And it's funny because you asked me, when did I really catch wind of this?

And people would kind of always talk about this being too good to be true. Right. But I remember going to one investment conference, and they have this big picture. It's at the fountain blue in Miami. You know, great hotel, great entertainment, first class stuff. And you have this IR guy bringing this China-based CEO over to you and say, hey, look, Dan, you got to invest in this company. The barrier to entry on this investment or anybody else competing against this company is huge. They're the only licensed online education company in China.

They're the only one that has a license to do online education in China. So, like, you can't lose money because nobody else can do this. I'm like, wow, that sounds great. Let's set up a one-on-one tomorrow. Let me pause you right there. If there's one thing China doesn't give a crap about, it's who's licensed to do what and who's got the copyright on what. And, like, no shade, that's one of the reasons they're able to, like, innovate and do things

so fast is because they don't care about that sort of stuff. It's bad for us, but I get why it's good for them. but thinking that you can go into China and be like, I'm the only one that has permission to do this. It's like, you better have permission from Xi Jinping because if that's not who you're talking to, you ain't got shit. Well, you have to take yourself back to this being 2009, too, where not as much as has been matriculated to the market about the knowledge of how this happens. But I'm telling you, I'm like, I'm like, this is great.

Because we had done so well in so many of these companies, I thought, okay, here's the next five bagger. This is going to be great. I didn't even walk 10 feet away. And some guy comes up to me and says, I want to introduce you the CEO. He's got this great business. He's got the only online license for selling education in China. And I was like, oh, no, no, no, no.

I've already got a meeting set up with them tomorrow. I've already met them. And he's like, really, I haven't talked to you. And I said, no, I just, this company over here. And I said the name of the company. He's like, oh, no, no, no, they're a fraud. We're the real thing. Come talk to us instead.

And I was like, what just happened? like openly at this meeting. No, no, no, no, no, no. They're a fraud. We're the real deal. We've got the only license. It's like, and you want to grab the two of them and set them in a room and say, which one of you is lying?

Right. But they're not going to go in the same room, and they'll protect each other in the end. That's the way it works in China. They will not rat on each other for the benefit of American investors. But one-on-one, they'll do it because they want your money. And it turns out they're both frauds. Right, yeah. Surprise, surprise.

Right. Yeah. that's scary and kind of funny that that happened within such a short time span because if two guys selling the same thing were in the same room at the same time imagine how many other people there are doing the exact same thing and the exact same niche at different times in different rooms all over the world in different countries I mean this doesn't just happen in the United States right I assume that they're doing this to everyone that they can was circa 2009 and 10 very very few but China-based U.S. listed companies were legitimate.

Like wholesale, everything was on the up and up. And, you know, I make this point to people that one of the companies that we exposed was it was a huge chicken farm operation, think Tyson's or whatever. Like, it's not small. But a Chinese chicken farmer doesn't wake up one day and know how to defraud the U.S. capital markets. They just, they just, or coal mine operation. We taught them how to do it. So it was our people over there, our law firms, our PR firms,

Our auditors in some cases that are directing them how to stay out of it, out of trouble, or to not be so obvious about their fraud, showed them how to do this. And they just thought they were doing the right thing. Sure. And by the way, when I say they, I don't mean like Chinese people. I mean criminals in the United States and in China. Well, when I say they, I usually mean the China Communist Party. Sure.

Look, the CCP is no friend of this show. That's for sure. But I just want to keep it real because I get email from Chinese show fans and they're like, dude, why do you hate us? And I'm like, whoa, whoa, whoa, my wife is Chinese. I want to be real clear here. Chinese people are the top victims of the CCP's bullshit in the first place, right? Well, I mean, as I said, we taught them, the China-based CEOs, how to commit fraud.

But on the other hand, we couldn't expose that fraud over there without the help of the people. The average everyday citizen in China who help us expose these frauds put a lot on the line to do it as well. So you're absolutely right, Jordan. There's a huge distinction between their government, our government, neither one of them worth much. I mean, ours much better, but they're still not representative of the people I can make the point in both cases anymore. Yeah, definitely. All right. So tell me what happened when you went to visit or when I guess muddy waters and other.

folks go to visit China, these factories in China that are supposedly getting millions of dollars a year in revenue. And one shows up in the China hustle. And this is kind of like, I'd say a typical example. You don't have to use that same example if you went to visit your own factories or landfills in Kuala Lumpur, whatever the example was. But I'm curious. And I don't know many people understand that this is like real diligence that's really happening, but nobody's doing it. Well, that was our footage from an investigation we did in the China Hustle on that factory. Yeah. Oh, okay. That was a real example of ours. This was, you know, amazing.

Like, so we filmed this factory that says they, you know, they make liquidified gas and energy. Then we're filming them for 30 days, as you saw, and nothing is happening. And then one day, lights start to come on. And the next day, smoke starts coming out of the smokestacks. And then the third day, two busloads of American investors show up and take a tour of the facility with a bunch of rented employees walking around in uniforms. and they get back on the bus and leave the next day, everything shuts out. That's happened many times in the past.

You know, now the frauds are getting a lot smarter. They're going online, which is a lot harder for us because, you know, we can't breach somebody's server. We can't, we don't break the laws here in the United States. I don't necessarily familiarize myself too much with the laws in China because that's a floating, moving target on a daily basis. So, but I do follow our laws. And breaching their server there here or anywhere else is not something we can do. So we spend a lot of time with computer engineers figuring out how some of these online frauds are perpetrating fraud today.

They're doing a lot of it. You're listening to The Jordan Harbinger Show with our guest, Dan David. We'll be right back. And now back to Dan David on the Jordan Harbinger show. So this factory, the one in the movie, for example, it's a paper factory. They said they had $5 million in raw material, right? And it was like the raw material was, I guess, this rotting pile of cardboard out back. that was literally garbage at that point. And there were country roads leading to the factory that

couldn't support the trucks. The roof was leaking in a paper mill. The assets were at least 10x overstated. I think you guys had said the revenue was 27x overstated, I think was the conclusion in the report. It's cool because in the China hustle, in the movie that you guys have, you're showing footage of, I guess a camera aimed at the factory entrance. And there's nothing happening. It's like sunup, sundown, sunup, sundown. And it's just, that and there's like a guard walking around smoking that's the only activity yeah and you're right like then they turn on the fountain they turn on the lights they open the gate there's a bunch of trucks they parked the trucks in there the lights are on in the factory they're i don't know using forklifts or

whatever to move stuff around and then these investors go in and then they drive away and it's like the lights out fountain off yeah gate closed it really is just like you said and that's happening so that they can show i guess a potemkin village to these investors that says hey yeah we went to the factory. They're doing a lot of work there. And it's kind of, it's tragically funny because when you look at the footage, you're just like, how easy is it to turn on the freaking lights and turn on the fountain and like open up the front gate, sweep a little, and you're fooling these billionaires. I mean, what kind of idiots, you know, are we? Well, most of those people on that bus were investment advisors as well. So, like, they have clients that they put in this. And when we

put that out, I mean, I'd say half the people on those two or three buses. called me, well, first of all, every name in the book. But they were just, I mean, live it. One of them actually went to the Looney Bit. I mean, he just like went nuts trying to defend this for three or four months because it ends up being a running gun battle with this company, right? They put out a press release. We put out more footage.

And it's this fight and then a lawsuit. And the investors are so hopeful that we are wrong. And I feel them. I really do. And all, every press release that company will put out. They're like, yeah. Now they're going to. stocks can go right back because the decision I made to buy this stock must have been the right

decision. It's rationalizing their behavior. They can't say I wasted $100 million or $10 million. They have to go, no, you're wrong and you're just an activist shorts. You're just trying to damage this poor company to screw up my investment. And you're like, yo, I'm filming the factory that you said is making paper. They're not making paper. I had a guy who lost $3,000 show up in my house. That's scary. Well, it's not the people that lose $100 million or a billion. I mean, there's been over a dozen companies that have been delisted from our exchange based on our reports in China. So billions of opportunity dollars have been lost by them. But they didn't have paying any of the money back and they still have billions. They're not going to ramp things up by

coming here to likely off me. Now they hack me and they do other things. But like, yeah, that guy who lives near me and finds that he lives near me lost $3,000 and that means everything to him and his family. I mean, I felt terrible. The conversation ended up being okay. The first 10 minutes were tense, but you just, you really feel for that investor because they want to talk to somebody at the company. They want some kind of, they want some kind of justice. And then they find out that the SEC can't do anything because they're in China. The DOJ can't do anything because they're in China. They're really beyond the law. And that individual is just like beyond his breaking point. And I'm the only person they can find. So it's got to be my

fault. It's sad. And honestly, I don't know what you think, but these types of investments should only be open to accredited, well, they shouldn't be open at all. But like risky investments like this that are speculative should not be open to a retired auto worker who's got $3,000 of social security slash pension money left over under his mattress and he's trying to turn it into 30 grand. Like, that is, he's being victimized by anybody who's allowing him to buy this in the first place. And it's not the Chinese companies or the CCP that's doing that to him, it's his investment advisor at fricking wherever brokerage that wants that money and goes, eh, screw it. That's who's really on the front lines of screwing this guy over, in my opinion. Well, I can make the case that the CCP

sponsors this. I mean, this is a... Well, they do, but they don't care where the money comes from, and that is criminal. Look, don't get me wrong. I will never, you won't find me defending the Chinese Communist Party once again. But the investment advisor, They're the person that knows that this guy doesn't have a lot of money, and they know how risky this can be. They just don't give a shit. The CCP's happy to take $100 million from the pension fund of a national foundation or something that can unfortunately afford to lose $100 million and not go belly up.

They're not saying, find these little retail investors, these old retired people, and take their money. That's what his investment advisor is actually doing. Yeah. I mean, in 2009, 10, 11, 12, you could kind of make the case. that, look, they're doing the same diligence there that they do here in the United States, interviewing the CFO, the CEO. They didn't realize that it, you know, that it was sport and not illegal to steal from U.S.

citizens. They should know better now. But, you know, Jordan, you look at the state of things today. That retiree from General Motors or anybody else with $3,000, it's all in the market. Where are you going to put your money? Our government has made sure that you don't put it in the bank, right? because at a 2% cost of living and you maybe get 1% back on your investment,

you're losing 1%. So everybody is in the stock market. 80 and 90 year olds are in the stock market, which is why it's so high. And once this thing comes back, it's going to kill generations. I mean, from seniors to the young people

who are just now getting involved in it, who have never really seen a bare market like 2008. There's a whole generation of investors that really don't know what happened in 2008, and that it can happen again in a much bigger way, and it will, because all of our monies in the market right now. How did these companies hide their poor finances? In the China Hustle, you guys mentioned that the big four accounting firms that are supposedly auditing this, what are they actually doing? Because clearly they're not really taking a good

look at anything. Well, any big four auditing firm, if you press them just even a little and ask this direct question, they will tell you, it's not their job to catch fraud. That's not their job. Okay. I mean, that's, people will say, wow, I didn't know that. I thought it was. But it is not. It is their job to check the financial filings and the veracity of the financial statements

that are prepared by the company. There are some people that think that auditors prepare the financial statements for companies. They do not. They check these financial statements. And then they list like 30 pages of disclaimers saying, if anything we didn't find or anything goes wrong, it's not our fault. So, I mean, I don't know that they're, you know, any more relevant than an H&R Block tax preparer. You know, Jim Chanos, one of the most famous contrarian investors in the world, you know, broke Enron and whatever else, anybody asks him a company

that he's looking at who's the auditor, he says the same thing every time. Who cares? Yeah. It doesn't matter. So these companies, when it says this is audited by Pricewaterhouse Cooper's. It's not even PWC. It's PWC China, which is not the, and this surprised me, because I didn't even know this even after Washington. This isn't PWC, but they're partners in China. This is a company in China that said, huh, we don't want to just be like Wong Hong audit company. Let's license, let's pay a company that has a brand and license the name. And then suddenly they are PWC, China. That would be like Apple saying, yeah, we don't make anything over there in Saudi Arabia. So we're just going to say, if you want to be Apple, Saudi Arabia, just give us a million dollars a year.

We don't need to look at your products. You're not going to sell Apple products. You're just going to sell the crap that you make. And we're not even going to pay any attention to it. And this seems like what they are doing. They're just licensing the name out because it's a revenue stream for them. It's worse than that. They not only license the name out, but the price waterhouse, you know, China, Shanghai, or wherever is chartered. So they're walled off against liability to the parent company. That's been successful so far. And what the big four, you know, are saying is, we used to be the big five. Remember Arthur Anderson? Yeah, yeah. And they're like, well, that shit's not going to happen to me. So now I'm going to charter all these different organizations

throughout the world that are walled off from the parent company. And that's what we've allowed them to do. And Arthur Anderson, I can't remember exactly what happened, but basically they got busted fraudulently, just making shit. And Ron. And Ron. Okay. Okay, that was in rent. Okay, that's what I thought. So they got caught rubber stamping fraud, and the whole ship got taken down. So now it sounds like what you're saying they've done is they've said, hey, every other office everywhere in the world. If you do something bad, we don't want to pay the price.

And if we do something bad, you shouldn't pay the price. So let's just create legal structures that are basically pretend where if you do fraud, we can say we didn't know you're just licensing our name. Exactly. Yeah. And in China, you have to be predominantly owned by Chinese citizens. You know, it's not even just that. You can't even be predominantly owned by foreign citizens to be an auditor in China. They take their auditing very, very seriously in China in that they don't allow you to do it

or take that audit paperwork outside of the country, which is the new bills and laws that have finally started to make their way through Congress, that if you don't allow that audit work to come to the United States once it's challenged by a company listed in the U.S., then you can be delisted. That's one step in the right direction. But the reality is, until you make it a crime to steal from foreign investors, you know, the China Space CEO will continue to do it because it's an asymmetrical proposition. If they steal from us, even if they get caught, they don't get in trouble, but they can keep the money if they don't get caught. But if they steal from a fellow Chinese citizen, they can get the death penalty, which somebody got last month.

I believe it was a banker, so I wasn't all broken up about it. But, you know, I mean, that's what happens in China. The monetary crimes can get you the death penalty. And when you tried to warn the banks when you find these frauds, I assume they just told you to get lost because you're damaging their investment vehicles, right? No, well, they told me they'd sue me. I mean, our first. Even worse.

Yeah. Well, and they did. I mean, like, they were part of getting their clients to sue us. So our first tack, like we weren't, we never sold a shares short in 2009. And when we saw that muddy waters and some of the others and that paper. company was the Muddy Waters company. And that was the first one I remember really coming out was Orient Paper. And I thought, wow, this guy is just lying through his teeth. I worked for a publicly traded company for 13 years and we would never lie like that. We've got Sarbanes-Oxley.

We've got all these compliance issues. They've got auditors that are looking at this, right? So we hired our own team to go look at 30 companies to prove that the short sellers are lying and are wrong. And our team came back after like, you know, two months. looking at 30 companies, and they said, yeah, the short sellers are wrong. They're understating the problem. You know, fraud is pervasive. It's out in the open. So we're here like, what do we do now? We don't want to sell shares short. We want to continue to invest. That's the American way, right? Not to bet against, but to bet four. So we said, okay, well, obviously the banks are collecting 10% transaction fees here, and they're not doing their due diligence like they say they are, because

the banks would always tell investors, oh, we went over to China and kicked the tires. So we went to the banks, we said, look, if this is what you're missing, we can ramp up a robust due diligence team to vet any of these deals because I'm sure you don't want to sell these deals to the market that are frauds. And they're like, hold on a second, you want us to pay you not to represent these companies. Because if you come back and say they're a fraud, we can't collect transaction fees. But if we don't know, we have plausible deniability, that we can collect as much as we want. So how about you get out of here before we sue you and have everything. every one of these guys sue you at the same time. And yeah, I mean, by our second or third report we

put out, we were getting sued. And the first two reports we put out, I'll point out that we didn't even take a short position it. We just said here, we spent $50,000 buying grave plots in China, just to prove this company didn't own the graveyard that said they own and published this report and nobody cared that we said we weren't short. They still called us short sellers. This is who you are. If you're going to be critical, you're a short seller. That's all there is to it. And we just lost $50,000 in due diligence. So from then on, we started shorting.

And, you know, five or six lawsuits later, there you go. We haven't lost any. We never will. But, yeah, it's a nuisance. So what are they suing you for defamation or something like that? I mean, what's the cause of action? Defamation's always in there. Okay.

One of them referred to me as a financial terrorist. That's my favorite. That you frame that one, I assume. It's on the wall. I mean, just like looking at this thing. I'm like, I have parents, man. I mean, seriously, dude, financial terrorist. What does that even mean?

Yeah. So, yeah, it's defamation, tortious interference. It's, you know, slander, you know, all of these things that they can come up with. It comes down basically to defamation, product disparagement or things of this nature. And they lose over and over and over again. But the point is it costs them nothing to sue me, right? Because they're using shareholder money. That's the thing about any of these companies.

American or China base. Like when they sue somebody, you're never accusing a company of fraud. I've never accused a company of fraud in my life because companies can't commit fraud. People at companies commit fraud. I'm accusing management of fraud. So what management ends up doing is taking the company's money and shareholders money and filing a lawsuit and paying for it and screwing them twice. Once on the fraud and once on, you know, they're kind of a escape hatch, right? While the lawsuit's going on, they're closing out the rest of their position. and they're getting out of Dodge. If they had to pay for it themselves,

they wouldn't sue anybody. Yeah, no, that's interesting. That's really interesting and a good point. And something to be thought about from a legal perspective. It's like, if you have unclean hands and you are actually a bad actor, you should no longer be able to be protected

by shareholder money because you've already shown, or it can already be shown that you have committed, you're breaching your fiduciary duty to those shareholders in the first place. How dare you then reach back into their pocket and use their money to protect you to hide yourself from Alfacin's. Anyway, that's neither here nor there because that's just going to get us both infuriated. If I can just make one point, it proves one thing above all,

the death of corporate governance, because who is there to protect the investors and to advocate on behalf of the investors at any given company, and it's the board of directors, the so-called independent board of directors, that should stop the CEO from filing a lawsuit and should launch an investigation into our allegations. But there's really no such thing as board governance anymore. It's an old boys or girls club now. And same people, same circuit on five different boards, making a couple hundred grand a year, plus 10 million in stock options to just look the other way. And nobody ever holds anybody on the board accountable. And these enormous fees that these CEOs collect, I mean, anywhere from Jamie Diamond to anywhere else. I remember Jamie Diamond really

sticking it to AOC for a great question she asked about how much he makes compared to his secretary, and he's like, well, I don't set my salary. The board does. Now, you know, I wish she would have known to say, yeah, like, and they're all your buddies, and they're in your pocket. So that's how they set this fee. But it happens in China. It happens here. And there is no longer corporate governance. This is the Jordan Harbinger show with our guest, Dan David. We'll be right back. Thanks so much for listening to the show, for supporting the show. I really appreciate that you sit down and spend time, or walk around, and spend time listening to me have conversations with amazing people all over the world.

It really is my honor here. I do love when you support our sponsors as well, because that's what keeps the lights on around here, frankly. Go to Jordan Harbinger.com slash deals. That's a page where all of these discount codes and sponsors and everything you hear during the ad spots on this show, they're all in one place, they're all clickable. It's an easy way to see if somebody sponsors us. if you're looking to make a purchase, get a mattress or two.

So please do consider supporting those who support us. Don't forget, we also have worksheets for today's episode. If you want drills, exercises, takeaways that we discuss here on these shows during these interviews, those are always in the show notes at Jordan Harbinger.com slash podcast. Now for the conclusion of our episode with Dan David. Tell me about Alfred Little, because this doesn't just have financial consequences. Alfred Little and Kun Hong is kind of this tragic figure in the film, right? And this poor guy just walked right into this thinking he was doing the right thing.

And he did do the right thing. Koon Hong knew what he was doing. Koon was one of the most experienced investigators we had. It was a team leader, really. And Alfred and I, John Carnes, were working together in the beginning, mostly from my perspective, because, you know, look, if you're long, a stock and you have something to say about it and you're wrong, well, you were just optimistic and that's okay. But if you're short of stock and you're critical, well, somebody wants to charge you with a crime. So I was always wanting somebody with experience

and ability to vet my research and I would and I would do his as well. And Kuhn was part of a team. He didn't write the report. He didn't have anything to say. It was John Carnes, his boss, who wrote the report. But Kuhn was the only person they could get their hands on in China. and man, they just threw his ass in jail. I mean, like, tomorrow. And to understand the conditions that they didn't even really talk about in the movie, the guy spent two years in a cell the size of a drunk tank with 30 other prisoners. I mean, sleeping on a pallet, like laid across lengthwise, everybody just slept on that

palette for two years. And when we tried to complain about this in the media, I think the New York Times picked it up at one point. Tell you how concerned China is about, you know, what we're. think of them. They read this story in the New York Times, and they went to Kuntzell, they took him out of his cell, they took him to the infirmary, and they made him clean up after TB patients with no mask and no gloves. And they said, if we see another article in the newspaper in the United States about this, we're going to bring you in here and you're going to lick it up. So talk to your

friend. They were deadly serious, Jordan, and we could not say another word about his incarceration. at his trial, the lawyer for the offended company was prosecuting him with the state prosecutor. It's just like... Wow. So unbelievably corrupt and improper. So this poor guy, he was investigating this silver mine. The Communist Party didn't like that, threw him in jail, and this is what happened to this guy. And as he tried to leave the country because he was in danger, they just picked him up, threw him in jail. No real trial, obviously. Just, you know, officials didn't like him. And so he spent two years in jail. And he was a Canadian citizen.

I mean, he had been born in China, but yeah. Oh, wow. Yeah, he naturalized as a Canadian citizen. They don't care. They don't care. And Canada couldn't get them out. I mean, it's just like, that's all there is to it. So you've got to, the biggest frauds in China are state-owned enterprises, what they call

SOEs. And many of these are going to be listed on their exchange and they're going to want us to buy shares in them. That's coming very soon through Hong Kong Connect and elsewhere. And let me tell you something. If you come out and you talk about a state-owned enterprise being a fraud, they're not going to throw you in jail. They're going to throw the jail on top of you.

You're not going to make it out. So there are frauds we don't even talk about Jordan. I mean, are you worried about this personally? You live in the United States, right? No, I'm worried about my investigator. I can't do any of this without people on the ground in China. Okay. And I'm not going through that Kuhn thing again.

You know, I couldn't live with it. I mean, Kuhn had his chances. He had his chances to leave. He just didn't believe that the government. government would care. He just couldn't believe that they were going to pick him up and do what they did. And unfortunately, they did. But if you're talking about President Xi, his family, or a national championship champion that's a state-owned enterprise, they'll kill you. I talk about Huawei on different shows. You know, I immediately start getting hacked. So they're hacking your computers,

what tap in your phone line or whatever, things like that? Oh, yeah. I mean, in 2018, I think it was, The FBI calls me out of the blue and says, you know, we would like to talk to you about your compromised systems. And they wouldn't even talk to me on the phone about who they suspected. So, yeah, come on out, fine. They fly in from parts that I won't mention because they asked me not to. So I'm just saying this isn't the local regional field office, right, that's 10 miles away. They flew in and they're like, yeah, you know, you're absolutely being surveilled, you're being

tapped. And I was like, yeah, welcome to the fucking party. I mean, it's been that way for eight years. I mean, what are you going to do about it, though? And there's nothing they can do about it. They took our servers. They took our information, which is a very difficult thing for me to give up, right? For the business that I'm in, you know, and all the companies that I'm looking at that I haven't possibly gone public with yet, I had to just give it all up and trust in my government. But I did. I never heard anything back. But, you know, I know that we're constantly surveilled. So the SEC outmanned, outgunned, they've busted one or two of these frauds. Short sellers have busted at the time of the documentary, which is like 2016, 2017, have busted like 50 of these, right?

So that's interesting. I assume it helps stop the frauds because people who lose money and see the pattern and see the writing on the wall, they hopefully wise up and refuse to invest again, even when they, because when you use short something and then it gets exposed, if I lose a bunch of money, I'm not going to invest in these kind of shady companies anymore, in theory. You would think, but I mean, I'll be exposing a fraud for the next couple of weeks, China-based fraud. One of the biggest frauds on the market today, you know, Carson talks about all the time. You can go on Twitter and see GSX is, funny enough, an online education company 10 years later.

It's now worth like $30 billion in market cap because of the squeeze. I mean, if you take it at face value from not only his research, but like three or four other experts that have looked at this, the thing's a zero, but nobody's able to do anything about it. And now it's worth $30 billion. And we're talking passive investments in these companies like Fidelity, Vanguard, BlackRock. All of them are invested in these companies because there's so much liquidity in the market right now, Jordan. They have to put their money in everything. Right. So everyone is losing. And what that means is everyone is losing money. So if you're thinking, well, hey, look, I'm a teacher. I don't invest in this. It's interesting.

this is your money. This is in your pension fund. This is your uncle, the firefighters pension fund. This is your husband, the police officer's pension fund. This is your money. It's your parents' money. It's the money that is in the investment vehicle for your kids' college fund that grows over time. You are invested in these. You don't have to make dumb, greedy decisions to be invested in. This is already happening to you. Almost every fraud that we exposed Calpers was invested in, California's retirement fund, one of the biggest in the world. Almost every one of them Calpers was invested in and still invested in. And when we called Calpers on it, they're like, you know, but we're up this much last year

and some of them are on our Asia investments. So does that mean you can bet on, you know, 5, 10, 20, 50, just salacious frauds and be cool with it? I guess so. What about people who think like, oh, look, fine, we owe China like a trillion dollars? What if we just don't pay them back? Right? You and I talked about this on our call before the show, and I said, you know, what if we just

say like, hey, a lot of this is fraud, ill gotten, let's do a calculation and say, like, you're not getting this back. And you said, yeah, that's not going to work. And here's why. Well, yeah, it's not even a trillion anymore. But, like, I mean, we're now on our way to 30 trillion in debt. So what is China's $800 billion in our treasuries really mean anymore? Not very much.

Who do we owe this money to, this, you know, other $29 trillion? We owe it to ourselves. We owe it to unfunded pensions, Social Security, unfunded liabilities that we borrow from. This is money. 80% of our debt, we have borrowed from ourselves and our future. That's what people mean when they say they're taking from our future. There's not being clear enough that, like, the money that we are printing, we are not selling to other countries because they're not buying it.

They're smart enough. We're buying it. And that's the reason that we can't put money in the bank right now because we can't raise interest rates. So, you know, way back when, we can get 3% in the bank and that's a pretty good little investment for some of your money or 6% in a CD. Now, if we're paying 3% interest on our government debt, that'll be more in interest than we spend on our military.

That'll be a trillion dollars a year in interest alone. So interest rates have to stay low or we're. are screwed. And if we don't pay back this money, we're not paying ourselves back. And who are we going to see about that? Yeah, that's a good point, right? So is there any way out of this? It sounds impossible and very depressing. Well, I mean, look, the way out of this, we needed to end quantitative easing back in at least, you know, Obama's second term. And, you know, I remember, you know, Trump, like criticizing the hell out of Obama while he was campaigning about not ending, you know, quantitative easing. And he was, he happened to be right about that one. And then he gets into office and

It's like, well, you know, I'm just going to print more money, too. I'm not going to take the hit. And then we have the pandemic. So I don't know what I can say about the new administration and the pickle they're in. But when we talk about the toolkit, whatever the Treasury says, the toolkit of how to deal with these issues, the toolkit is only printing money. That's all we have anymore. And when you think about it, Jordan, look, all empires fail generally on the crushing weight

of debt, not in men. military conflict. And if you don't think the United States is an empire, I would ask you why our militaries in 80 countries, but that's beside the point. But you look at Rome, I mean, is Italy still there? Sure. They make great shoes and dresses, but they're not Rome. You know, you look at Great Britain. Does, you know, does the sun set on the British Empire today? It sure does. England's still there, but like, that's the way we're headed because of the debt. And it probably is not going to be all in one catastrophic moment, but a build on what we're doing to ourselves and not being able to pay ourselves back at some point. So how much stock in the U.S. from, let's say, retail mom and pop

investors or U.S. investors in general might just be worth zero because of this sort of fraud. Do we have an estimate of how much money we actually stand to lose here? Because of China-based fraud? Yeah, just this type of fraud. It doesn't have to be China-based, but we're talking about China-based here on the shows. Are they the majority of this type of fraud? I mean, look, Jordan, we are in the golden age of corporate fraud. So, I mean, if you're asking me how much of our markets are frothy with fraud, I would say more than ever in the history of markets, I don't know that that's a huge percentage relative to that comment. But in a situation where people are no longer charged with fraud, but corporations pay huge fines and nobody goes to jail, then it's baked into the P&L, right? There is this, this arithmetic that these companies do that say, okay, you know, if we do this, we're going to run a foul of this regulation or this law or whatever, and what are we going to gain and what are we going to lose, potentially in a fine? Somebody going to jail is just like off the table. Fraud is a crime for the poor

and the middle class, which are increasingly becoming the same thing. But it is not a crime for corporate America. So it's just a bigger problem really here. I could make the case as it is China-based companies listed here. So essentially what you're saying, what it sounds like you're saying is, since there's no jail time for anyone involved, big banks, big companies, investment vehicles, things like it, they can simply take their budget and say like marketing, Christmas party, salaries, insurance, oh, fraud will account for that.

And then when they get busted or if they ever get busted by the SEC or anyone else, they just go, well, that just comes out of the fraud budget. So just go ahead and pay that. we already saw this possibly coming. Since there's no jail time, they're not actually trying to avoid it. They can simply plan around it. Yeah, I mean, you could look at examples over and over and over again. It's, you know, Wells Fargo paying $250 billion for committing fraud against its own customers.

So, like, what did they do? They screwed their own customers by committing fraud against them, right? They screwed their own shareholders with the headline risk of having fraud and being brought in front of Congress. And then how did they pay this money? It's shareholder money. Right. It didn't come from the people committing the fraud, and nobody went to jail.

Yeah, you go to Wells Fargo, and you go, hey, there's no lines because they don't have any customers because of the fraud. And then you're late with a check or you bounce something, and they say, hey, that's $35. That's where they're getting the money to pay for the fraud. They're getting it from you. Shareholders and the customers. And it's every bank. I mean, every bank has paid that fine.

And you look at HSBC, who regularly it's written, like, you know, and proven, they fund has law. They fund drug cartels. what's HSBC stand for as far as a bank? Hong Kong, Shanghai Banking Corporation. Of course they do. And they will make more money committing the fraud or the crime than they have to pay in the fine almost every time.

You look at a household name like Walmart who just got slapped with a federal corrupt practice violation for what they did in Mexico, opening up stores all through Mexico, right? Well, yeah, they had to pay a really big fine. But guess what they have? A lot of stores in Mexico now. It's going to be fine for them.

Again, I want to sort of clarify that this isn't a Chinese thing, by the way, this is an incentive structure that just begs for fraud without any accountability. There's nothing, I always have to say this like five times during a show that this is not Chinese people bad, Americans good. This is humans with unchecked power to lie, cheat, and steal from others bad, and people will do that with reckless abandon unless there are rules in place that can actually be enforced, e.g. are not overseas in a place where it's legal to steal from other people in other countries. And that happens to be the way that things are set up in China right now because rule of law is much weaker over there. And I don't know if we have a whole lot of room to point the finger at this point

here in the United States. But I wanted to sound the alarm in any case because, you know, a lot of people listen to the show that are in positions to maybe possibly do something about this, where at least know what's going on so they can avoid running headfirst into this into trouble here. At least we have independent courts. And I say that with a straight face. I really feel like our court system is still like the branch of government that works. The legislative branch doesn't work at all. The executive branch, oh my God. I mean, like, I mean, it's ruled by executive order. But the independent courts really make us a very, very different thing. And in China, there's absolutely no independence to the courts, right? So you're not going to go there and stand up to one of their

most favorite companies or a national champion. You're going to lose in court because that's by government doctrine. Here, I think it's good that way. that we still do have independent courts, we're just not bringing anybody to court for criminal prosecution because you go back to the example of the bank that committed fraud on his customers and paid $250 billion in a fine. What are they really saying there? What they're saying to the SEC and government agencies is this is how much we will spend fighting you. That's more than your budget for the entire year. By far, any of these banks makes more quarterly profit than the SEC division of enforcement has in their budget. So if you try to put somebody in jail, they'll spend a

half trillion dollars fighting you. That shouldn't be an option, right? But it is. Well, thank you very much. Super interesting story. The China Hustle will link to it in the show notes. I'll also link to your podcast, which is the I Hung Up on Warren Buffett podcast. Is that actually what it's called? Yeah. Well, that's easy to remember, isn't it? Yeah, it is. It's a Wolfpack Research website, Wolfpackrearchrearch.com and Wolfpack reports on Twitter. No offense. against Mr. Buffett. He's a great guy, but look, you know, at one point I hung up on him. So there you go. Why did you hang up on him? You know what? I've never told that story publicly. I'm going to hold on to it.

Okay, yeah. We'll keep in our back pocket for when I finally see you in person. We'll do that one. Yeah, it was for the best reason possible. I have the utmost respect for the guy. Okay. Perfect. Well, that's a nice way to hang up on somebody. Look, I respectfully am slamming the phone down in your ear. It was the best thing I could do in the moment. Great. Dan, David, thank you so much. As usual, I've got some thoughts on this episode, but before I get into that, here's a preview with a former undercover FBI agent who infiltrated the Gambino crime family in New York for nearly three years, resulting in the arrest and conviction of 35 mobsters. And get this, he's not even Italian. Here's a bite. Jordan, I've done everything. I mean, I have posed as a money laundry. I've worked as a drug dealer. I have worked as a transporter for drug dealers. I have worked as a warehouse. the whole gamut. My career was 24 out of 26 years,

was solely dedicated working undercover. If I wasn't working for the FBI, I would have been investigated by the FBI. Exactly, yeah. Now, I walk in, I'm in the bar. Now there's a barmate there, good-looking young lady. She's serving me a cheerleader. What would you like? I used to leave my drink was give me a kettle, one martini, three olives, a glass of water on the side.

I finished the drink. The guys come in. I'm going to go, go in my pocket, take out the big water money and not with the rubber band on it. Bam, give her $100. You're not a guy who takes out a little leather wallet and he's going through the chain or he's doing it. Can you imagine four gangs are sitting around going let's split it up?

I had the soup. He had to sandwich and french fries. What about the tech? Sometimes we get into bidding work. That goes, hey, your money's no good here. What are you doing? You're embarrassing me over here. What do you mean?

You paid the lad. Let me get it. Forget about it. You pay for it. If I would have gone in there and became a guy who had never a penny, never went into his wallet, never picked up a tab, never had a dime, never kicked up money, never gave tribute payments, that'd be on my ass, they throw me out. If you're with the mob, I say, hey, Jordan, you're on record with us.

That means we protect you. Nobody could shake you down. We can shake you down, but you're on record with us. For more, including tricks wise guys used to know who's legit and who's not, culture and the rules that govern the always upward flow of money and how Jack became so trusted by the highest levels of the organization that they offered him the chance to become a made man. Check out episode 392 of the Jordan Harbinger Show with Jack Garcia. Super interesting, really, really fascinating, guys. Studies a lot of things in-depth,

which I always appreciate. The film we referenced is called The China Hustle. It is on Amazon Prime Video. If you're a prime member, you've got that free. We'll link to that in the show notes. Now, there's a proverb in Chinese that says muddy water makes it easy to catch fish. And what this means essentially is that opacity or lack of transparency creates opportunities to make money. And that's exactly what's happening here in these reverse merger, sort of sketchy stock deals here. It is designed to suck money out of the system. There's almost no value to be had here.

There's a lot that can be discovered about this. In fact, Dan found that there are filings in China that have the real information about these companies. So one company might list in the United States and say, hey, we have $100 million worth of paper. When you look up the Chinese filings, which are actually quite tricky to get, apparently, it'll say, actually, we have $3 million in holdings and the companies in this kind of condition. Unfortunately, there's no way to find Chinese auditors to find the fraud because those folks would just get disappeared. They wouldn't be around after they did that once or twice.

And that's the way that things work over there, unfortunately. And a lot of you are probably asking, well, why can't we just change this and plug the loop? Well, the fight is not necessarily with China here. The fight is with the U.S. government. So before everyone says, man, Jordan really has it out for China. No, I'm not applauding this, of course. I think it's terrible. But the problem really is that nobody wants to kill the Chinese golden goose, right? There's tons of fees to be earned here by everyone along the way. Lawyers, auditors, financiers here in the United States, it's almost like legal corruption. So really, while we're pointing the finger at China, we should just be pointing, it's what's that a phrase, when you

point your finger at somebody else, there's three fingers pointing back at you. It's never been more true in this case. We are equally complicit in allowing this to happen. And as we mentioned on the show, it's public retirement pensions and retirement funds that lost approximately $14 billion just to these reverse merger frauds. These are mom and pop, teachers, ironworkers, police losing this money and putting it in the pocket of some chain smoking POS living overseas and pocket square wearing lawyers, just like I used to be, here in the United States, bankers, taken their fees out of that same cash in exchange for helping it out of the pockets of Americans and into the pockets of criminals.

It's just infuriating. Can't tell I'm getting a little worked up over here. The documentary I really enjoyed the China hustle. In fact, a few people storm out of the interviews on that documentary because they just realize they're going to look like greedy shits in the film. They just know it. They smell it coming after a while and they go, wait a minute, what's going on here? And they just bounce.

So that's kind of the mark of a good documentary. They push a little bit, right? There are over 100 Chinese companies trading in the U.S. markets with a total market value of $1.1 trillion as of 2017. So there's way more by now. And by the way, that includes perfectly legitimate Chinese companies as well. So I want to be clear here. It's not that there's $1.1 trillion in complete BS in the market from China. It's the BS is mixed in with legit Chinese companies. And that's bad for those Chinese companies too. Imagine if you play fair and you're working hard and you're crafting a really great enterprise and a bunch of your colleagues or countrymen

over there are just crafting garbage. It reflects poorly on you too. They should be equally mad about this. Again, I want to distinguish between China and the Chinese government versus the Chinese people. I love my Chinese listeners. I love my Chinese fans. Wherever you may be, I'm married a Chinese person. This is about criminals in your country collaborating with criminal assholes or pseudo-criminal assholes in my country. This is not about you. And I want to highlight that once again. Thanks to Dan David for coming on the show. His podcast is called The I Hung Up on Warren Buffett podcast, and he's over at Wolfpack Research.

That's his website. We'll link to that in the show notes. Please do use our website links if you buy any books or anything like that from the guests. This is a documentary, not a book, so I guess we don't have to worry about that here. But in general, please use the links on the site. It helps support the show. Worksheets for the episode in the show notes, transcripts on the show notes, video of this interview going up on our YouTube at Jordan Harbinger.com slash YouTube.

I'm at Jordan Harbinger on both Twitter and Instagram or hit me on LinkedIn. I'm teaching you how to connect with amazing people, manage relationships using the same system, software, and tiny habits that I use every single day. That's in our six-minute networking course. That course is free. It's over at Jordan Harbinger.com slash course. Dig the well before you get thirsty. Most of the people you hear on the show, they're a part of the course, either contributing,

helping out, or just taking it themselves. Come join us. You'll be in smart company. This show is created in association with Podcast One. My amazing team is Jen Harbinger, Jase Sanderson, Robert Fogart, Mili Ocampo, Ian Baird, Josh Ballard, and Gabriel Mizrahi. Remember, we rise by lifting others. The fee for this show is that you share it with friends

when you find something useful or interesting. If you know somebody who's into finance, financial crime, true crime, investing, short selling, please do share this episode with him. I think they'll find it fascinating. And sharing is what helps us grow. So please do share the show with those you can. care about and even people you don't like. You know, share it with them too. We could all use a little

Jordan Harbinger show in our lives, am I right? In the meantime, do your best to apply what you hear on this show so that you can live what you listen, and we'll see you next time. This episode is sponsored in part by Something You Should Know podcast. Finding a new great podcast shouldn't be this hard, so let me save you some time. If you like the Jordan Harbinger show, you'll probably like something you should know with Mike Carruthers. It's one of those shows that makes you smarter in a practical, useful way. Same curiosity vibe we go for here, just in a fast, format, Mike brings on top experts and asks the exact questions that you'd want to ask, and the topics are all over the place in the best way. Recently, they've covered things like why we care

so much what other people think, the benefits of laughter, why sports fans get so invested, and what makes people like you or not. The through line is always the same. Smart ideas you can actually use in real life. Something you should know has been featured in Apple's shows we love, and it's got thousands of five-star reviews because it's consistently interesting. So if you want another show that scratches that I want to understand how people in the world really work, itch, search for something you should know wherever you get your podcasts. Look for the bright yellow light bulb and start listening. You can thank me later.