Carson Block says he's certain China will face day of reckoning

(May 25): Carson Block said he will continue wagering against Hong Kong-listed companies on the view that a pullback in credit will send shock waves through the economy.

Block, the founder of Muddy Waters LLC, said in an interview that China’s credit problems since the global financial crisis will reach a breaking point. He blames this on Chinese officials cramming liquidity into the banking system, which allowed other players to pull their cash out, leaving the system increasingly vulnerable to collapse, he said.

"At some point, your past sins catch up with you," Block said in an interview on Bloomberg Television. "Ultimately, there will be a day of reckoning, and I know that. I just can’t tell you if that’s in two months, two years or 20 years."

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