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Jim Chanos continues to short China as the bubble grows
Posted on 11 February 2011 with 1 comment from readers
The Chinese economy is not stable because there is huge hidden debt in the construction boom. The construction bubble was 16-18 per cent of Western economies before the global financial crisis while China is running at 60-70 per cent.
But the Chanos warning that China is Dubai x1000 is wearing thin as Chinese growth continues to astound observers. Credit is growing four times faster than GDP – it’s the old leverage problem. The boom-to-slump cycle is well known as are credit-driven investment bubbles.
The US will be affected least of all by the Chinese bubble bursting. Lower commodity prices would actually be helpful. It will be the commodity exporters who will suffer the most. Chanos will be right but when?
Posted on 11 February 2011
Categories: Banking & Finance, Global Economics, Hedge Funds, Investment Gurus, Video Channel
1 Comment posted by readers:
It looks like I will continue to sit on cash. China does have a major correction, and it will be look out below, big time. Everything could get cheaper. The bond market could get interesting. Maybe AT&T will be scared into finding a way to repair a DSL link in less than 3 days. Probably not. Trying to navigate their labyrinth of security checks to actually reach the web on a new computer actually gave me a headache. These telecoms should pay us! I finally figured out why they pay rather high dividends. It is to ease their conscience for torturing their customers.
We can’t say 2011 hasn’t been interesting, so far. It could be worse. We could all be living in Concepcion, Chile where 2 major earthquakes have hit within about a year. Bummer. I’ll bet the Chileans got the phones fixed faster than AT&T does in the USA.