Just after the Mid-Autumn Festival, another bond default shocked the market. The bond default of 2.23 billion yuan of Neoglory Group Ltd. has aroused great attention from the trade and market. In the past few months, in Zhejiang Province, where the private economy is developed, private enterprise bond defaults have occurred continuously.Private lending is usury. In recent years, many companies in liquidity dilemma often regard the so-called private lending as a life-saving straw. They use the so-called "bridge capital" to solve the problem. When the bank loan matures, they repay the loan through short-term private lending, and then borrow from the bank to repay the old, maintaining the operation of their own enterprises. The final result of extreme leverage is predictable, but the timing can never be predicted. Whether households, enterprises or financial institutions that seem to be great, if the leverage ratio is too high to exceed the margin of safety and rely too much on the false bubbles of prosperity, there is bound to be a crisis.
