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Chanos On Chinese Overheating And Overindulgence
You hear the bull story every day on TV and from the likes of Tom Friedman. Michael Pettis and Chanos take the bear side. Below is a recent must-watch, hour long presentation by Jim Chanos, courtesy of Peter Schiff.
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(I assume that's "bull" as in BS)
ZH is notoriously bearish about obvious bullish trends.
If you stay around here long enough you will learn the most profitable positions are counter-parties to Tyler or Marla. There are few sites that are as predictable as this one.
But I love the wonderful stories they are sooooo great. Tyler is the man, Marla is the woman. Together they are preparing us for the big collapse. You guys are the best!
--Kissy
China and Obama are on the same page
Spoons to build a canal
GDP driven by government --- not by economic activity
China had the nerve to dump tens of millions workers on the street overnight. If Obama could have done the same to Detroit, Wall St., GE, F&F and so on.
Note: Pettis, in addition to his Bejing University gig also shills for Shenyin Wanguo, China's Goldman
This guy is a painful turd to listen to.
""China and Obama are on the same page""
US trillions DEFICET
China trillions surplus
How-ever that paper is bcoming more paper by the day...so Chinsese are dumping for stuff that will good for a LONG time...copper, gold, ect...
Did you watch the video..?
Among the best presentations I've heard in 20 years. Well reasons, supported, and at times, out of the box.
And if China is a bubble to burst, and if the US and the West goes into a double dip, what does that say for the debate between deflation and inflation?
Read Irving Fisher. And as Chanos points out, get a copy of Rogoff and Reinhart's 'This Time Is Different'.
Ooh-rah!
Monoki
So much for skipping deflation on the road to inflation.
did you guys see Dylan's bashing Barry today?? It's awsome! I'm surprised Tyler didn't report on it
Dylan's bashing, for your convenience:
http://www.youtube.com/watch?v=jnR6JU8Uehg
Excellent. He should have said Obamas trying to run a marathon while he is on a treadmill.
As many here know, China has a ticking time bomb as a result of the One Child Policy, the societal preference for males, and easy access to abortion. China now has 30 million more males than females in the hormone-critical years of 12-20. Even in China 30 million is a huge number. Romance will become a game of musical chairs, with women being the chairs (no offense meant; it's a analogy). Already this is evidencing itself in extreme selectiveness among Parents-in-Law of potential grooms, as in "How much money do you make, young man?"
I have it on good word that the Chinese Ministry of Information has a new campaign in the works, updating a phrase from the Deng Era which now goes:
"To bugger thy comrade is glorious"
I guess that's just the inscrutable East's way of saying "not that there's anything wrong with that".
Fixing gender imbalance is what North Korean mail-order bride, East European mail-order bride, and etc. mail-order bride are for. (no offense meant; just stating government policy)
Chindit,
Or there will be a huge Chinese diaspora...go forth young man..do you think they will go West?
The One Child Policy of old just meant that if you wanted more than one child you would have to pay a fee to the government.
Today in China the policy is being lifted. I thought you would know that Chindit...
This is the first time since 1979 that officials have actively encouraged parents to have more children. Think of how quickly your population can grow from 1.3 billion to 2.6 billion.
Can the "bubble" be serviced by 2.6 billion people?
TPC had a nice post on this same subject.
http://pragcap.com/an-interview-with-a-chinese-real-estate-insider
So picture this, Chanos the man, part of the President's Working group--along with all the other chosen ones, with such high integrity that they can make decisions about how to "help" the capital markets without "using" that info for their own gain--OOPS, sorry, that isn't something that can possibly be fathomed, nevermind.
Good Comment Agrotera
A great presentation; while I question his motives as it is part of any due diligence, I don't think the facts presented here can be easily disputed.
Michael Pettis writes a nice blog most weeks -
http://www.mpettis.com
good presentation, but the dude need some new glasses! did you see how he keeps bending down to see his laptop?
You can add Faber to that list of China bears:
"At some point in 2010, stocks will likely be down between 20% and 40% from their recent highs (emerging markets with a large China exposure would seem to be particularly vulnerable). During this decline the US dollar and US government bonds should continue to strengthen"
"But as soon as the S&P drops to around 950 and as soon as the Chinese economy weakens visibly, policy makers and central banks around the world will implement additional coordinated fiscal stimuli and more money printing." Faber today
The best line from Chanos, "China & the US are mirror images of each other...In China, they've adopted Capitalism, to keep the Socialists in power. In the US, they've adopted Socialism, to keep the Capitalists in power. Think about it."
brilliant point
chimerica: anatomy of a dysfunctional marriage
nice presentation. in a nutshell- china has been putting their wealth into: (US treasuries, he didnt talk about that), and fixed assets - factories and houses and commercial real estate, and they overbuilt. there's enough office space to put every man woman and child in china into an office, housing prices are 1/2 of income for typical chinese in large city etc etc.
here's one factoid that caught my eye: chinese government in deficit for first time this year? this is interesting because.... if chinese real-estate melts down like US, china will likely do US-like response- bail out the banks holding the underwater mortgages, encourage them to let RE prices be undiscovered by delaying forclosures on households, etc. so chinese government must borrow a lot. natural collateral? their big pile of US treasuries. or will they be tempted to sell the above? ah.
Still not that much new. maybe if the US can wait it out till the same thing happens to China, it will all cancel out- the whole world can then safely inflate together without harmful cross-border effects... well except for non-militarily-dominated resource-rich countries like canada or australia.
The guy needs to get stronger glasses...
or bigger printed words ... it was distracting from his presentation!
The podium lamp was dead.
Great post! Any idea where we can find Chanos' slides?
china is a sovereign wealth engine with latent power. no debt huge creditor nation. 40 year plan..
the sleeping giant .. labor, land, resources, those who think china is range bound by the fiat dollar are chasing hoops threw a maze of confettie
this engine of growth will surprise to the upside .. as power shifts from the west to the east.
bend over america grab your ankles , and watch the game from the cheap seats at the roller derby ,
If you keep talking sense like this you will get banned from this site by Tyler.
But I love this site. Tyler is the greatest and Marla is.... well she's just hawt. Like totally. This website is hawt too.
What does courtesy of Peter Schiff mean?
Mish
Schiff uploaded it on his YouTube channel. I was curious to see if Schiff had any commentary on it - is he changing his tune on China or just presenting a counterpoint to his bullish position?
Is he talking about the U.S or China? No answer necessary
What comes out of Chanos' presentation for me is the fact that the Chinese are looking for a store of value that is not fiat currency. The fundamental motive is a distrust of fiat.
It will be unfortunate for those Chinese that choose real estate. There were no really helpful hints as to how or what to short, but it is obvious if you believe what he said that there are mining companies supplying to the construction industry, and the ones that stand out are cement and steel. Thailand and Australia in particular will be badly affected..
The Chinese Govt has been encouraging its population (including TV ads) to acquire gold and silver. They are doing just that.
It is obvious how to structure your investment portfolio accordingly. No need to go short selling which requires skills I don't have.
Temperature rising back above 3000 in Shanghai
my vote for best quote:
(chinese) socialist elite turning to capitalism vs (western) capitalist elite turning to socialism
From "50 facts about China's Bubble"
7.The international media has been following reports of record commodity imports by China. The surge is being portrayed as reflecting China's recovering economy. Indeed, the international financial market is portraying China's perceived recovery as a harbinger for global recovery. It is a major factor pushing up stock prices around the world.
8. For four decades before 2003, fine iron ore prices fluctuated between US$ 20 and US$ 30 a ton. As ore was plentiful, prices were driven by production costs. After 2003, Chinese demand drove prices out of this range. Contract prices quadrupled to nearly US$ 100 per ton, and the spot price reached nearly US$ 200 a ton in 2008.
9. China's steel production capacity has skyrocketed, even though capacity is fragmented.
http://israelfinancialexpert.blogspot.com/2010/01/50-facts-about-chinas-bubble-economy.html
Interesting talk
2nd - slides would be nice
anyone know when this was given?
Slides! We demand the Slides, or we will continue to say KnEEEEK!
The weakeninng copper chart tells us where the economy is headed.
http://www.zerohedge.com/forum/market-outlook-0