Saturday, February 6, 2010
Chanos on China
"James S. Chanos built one of the largest fortunes on Wall Street by forseeing the collapse of Enron and other highflying companies whose stories were too good to be true. Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc. As most of the world bets on China to helplift the global economy out of recession, Mr. Chanos is warning that China's hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like 'Dubai times 1,000--or worse,' he frets. He even suspects that Beijing is cooking its books, faking, among other things, faking, among other things, its eye-popping growth rates of more than 8 percent. ... As America's pre-eminent short-seller--he bets big money that companies' strategies will fail--Mr. Chanos's narrative runs counter to the prevailing wisdom on China", David Barboza at the NYT, 8 January 2010, link:
Was Michael Boskin in China recently? I'm with Chanos. China looks like an overbuilt disaster waiting to happen.