What Philip R. Wood and Richard Werner can teach us about U.S. commercial real estate and China’s shadow banking collapse

By Taimour Zaman, Founder of AltFunds Global

Why Start Here?

Walk through downtown Washington, D.C., or Boston today and you’ll see a new kind of ghost town: half-empty office towers, dark windows, “For Lease” signs everywhere. Those towers have lost over half a trillion dollars in value since 2019, leaving city budgets scrambling for tax revenue.

Now compare that with Manhattan, where office attendance has roared back, banks are financing billion-dollar skyscraper loans, and investors are pouring money into commercial mortgage-backed securities.

Or look to China, where millions of middle-class savers are watching their money vanish as the country’s $3.7 trillion shadow banking sector implodes. Trust companies that once promised steady returns are defaulting, wiping out household wealth almost overnight.

At first glance, these stories feel unrelated—America’s empty towers and China’s collapsing trusts. But they’re not. Both are symptoms of the same invisible forces. To understand them, you need two unlikely guides: Philip R. Wood, a British lawyer obsessed with contracts, and Richard Werner, a German economist who uncovered the secret of money creation.

Philip R. Wood: The Lawyer of Last Resort

Wood believed finance is nothing more than law wearing a suit. Every loan or bond is just paper until a court enforces it. And when things go wrong—as they always do—the wording of a contract decides who gets paid and who doesn’t.

In New York, the reason billion-dollar skyscraper loans keep happening is not luck. It’s legal certainty. Contracts are enforceable. Creditors know where they stand. In Boston or D.C., weaker scaffolding leaves lenders exposed, so capital dries up.

Wood’s lesson: value doesn’t live in bricks or glass; it lives in enforceable promises.

Richard Werner: The Banker’s Secret

Werner discovered something equally unsettling: banks don’t simply move deposits around—they create money when they lend.

This means growth, bubbles, and crashes all depend on where banks choose to point their credit firehose.

In much of America, banks have pulled back from commercial real estate, and towers have become stranded assets.
In Manhattan, they’re still lending, conjuring billions into existence and “rescuing” skyscraper values.
In China, shadow banks created mountains of credit for speculative property bets. When the flow stopped, so did the illusion of wealth.

Werner’s lesson: credit is the bloodstream of economies. If it flows to speculation, expect collapse. If it flows to productivity, expect growth.

The Two Lenses Together

Seen side by side, Wood and Werner explain the news better than the headlines do:

• Wood (law): Finance collapses when contracts can’t be enforced.
• Werner (credit): Economies collapse when lending is misdirected or cut off.

That’s why Manhattan towers rise while others fall. That’s why China’s shadow banks vaporized trillions in wealth.

Why This Matters Now

We’re living in a world where:

• U.S. cities are splitting between revival and decline.
• Chinese households are losing savings once thought safe.
• Private credit, sovereign debt crises, and crypto innovations all test the same twin forces: law and credit.

If you only follow the loud conversation, it feels chaotic. If you listen to Wood and Werner, it starts to make sense.

Conclusion: Paper and Promises

Money isn’t steel or concrete—it’s contracts and credit, fragile but powerful.

Philip R. Wood shows us that law holds the financial tower together.

Richard Werner shows us that credit is its bloodstream.

Together, they reveal why skyscrapers in one city thrive while collapsing in another, and why trillions can vanish in China overnight.

Paper and promises. Law and lending. Fragile, yes. But powerful enough to run the world.

— Taimour Zaman
Founder, AltFunds Global