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Jim Chanos Compares China's Stock Market To Pig On LSD, Fears "Lost Chinese Decade"
Over the past three months, there’s been no shortage of attempts to explain the wild gyrations in China’s equity markets by way of analogy and/or colorful metaphors and the same goes for efforts to analyze the country’s decelerating economy.
Take Horseman Global for instance, who, in a moment of nostalgia for classic 80s cinema, said the following earlier this month:
For bears, much like the alien in Predator, the Chinese government has continually used special abilities that were previously unknown. In my experience, in the mind of the international investment community, small devaluations tend to encourage even more capital outflow, which in turn leads to even larger devaluations. Or to borrow a line from Predator, "If it bleeds, we can kill it".
Now obviously, topping that is no small feat, but Jim Chanos took a stab at it during a panel discussion on China in New York on Tuesday.
“It’s like a pig on LSD. You don’t know which way it’s going to run,” Chanos said of China’s stock market, which of course is susceptible to huge intraday swings depending on what mood the PBoC’s plunge protection team happens to be in.
But on a more serious note, Chanos doesn’t think Chinese equities are the way to go when betting against the country as it attempts to mark a difficult transition from an investment-led economy to a model based on consumption and services and as Beijing grapples with debt legacy stemming from efforts to boost growth in the wake of the financial crisis. Here’s more from Bloomberg:
China is on a path similar to the one that preceded Japan’s lost decade in the 1990s as the country’s debt level grows twice as fast as its economy, according to Jim Chanos, the hedge fund manager who predicted the 2001 collapse of Enron Corp.
“We have an economy addicted to credit,” Chanos, founder of Kynikos Associates LP, said during a panel discussion on China in New York Tuesday. While the country doesn’t appear to be facing an “imminent collapse,” it is on a trajectory similar to the one Japan was on before its asset-price collapse in 1991 “but on steroids,” he said.
Chinese annual loan growth has slowed to about 15 percent from more than 30 percent in 2009, that’s still double the pace of expansion in gross domestic product. Total household and corporate debt surged to 207 percent of GDP in June, up from 125 percent at the end of 2008 when China embarked on a borrowing binge to stimulate the economy, according to data compiled by Bloomberg.
Japan’s total debt swelled to 176 percent of GDP in 1990 from 127 percent in 1980, according to JPMorgan Chase & Co. The burst of the housing and stock market bubble since then led to anemic economic growth in the following years, a period commonly referred to as a lost decade.
“It takes time to sort out” the debt overhang, said Chanos. The investor has forecast since at least February 2010 that the country’s property market will slump, saying that China is Dubai times a thousand and on a “treadmill to hell” because of its reliance on real estate for growth.
Even though Chanos is bearish on the outlook for China, he said he isn’t shorting the country’s stocks because the equity market isn’t a reliable gauge of economic activity. Instead, the slowdown will claim victims in global commodity and mining companies, especially liquefied natural gas producers in Asia, he said. Chanos said earlier this month that he’s betting against Cheniere Energy Inc., a U.S. natural-gas exporter.
Of course, as we've noted on numerous occasions when discussing China's massive debt load (and we're talking about so-called "augmented" debt here which takes into account off-balance sheet LGVF financing as well as corporate debt), deleveraging is complicated by Beijing's efforts to keep economic growth from decelerating further.
Here's a look at the problem via the IMF:
Efforts to effectively deleverage and re-leverage all at once have led to the adoption of a kind of schizophrenic approach to managing markets and the economy as China desperately tries to convince the world that somehow it can manage multiple competing goals if only Beijing can find the right mix of policies. As recent developments in both FX and equity markets have made abundantly clear, this simply isn't possible and Beijing is rapidly losing credibility. We close with what Chanos said last month with regard to China's mulitple spinning plates:
"People are beginning to realize the Chinese government is not omnipotent and omniscient. In fact, like many of us, sometimes they don't have a clue."
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Ms Piggy is back!
Um, you mean that one, the one that's floating?
A Pig on LSD? David Cameron would surely like to fuck THAT piggy! ;-)
Looney
http://www.theguardian.com/politics/2015/sep/21/conservative-sources-deny-david-cameron-pigs-head-allegations
Lucy in the Sky....with Diamonds.
Gotta read through the nuspeak.
Fear = Hope.
The thing that Western Economists really fear is that China will just ignore the stawks and continue to use their billion people in a productive, expansionist, Russia-helping manner.
this is directed to looney and his scurrilous slander of david cameron.
first, though it has been said many times that david himself is a big-time drug user, it has never been stated that he used drugs to facilitate his sexual relationships with barnyard animals.
second, it is widely known that it is irrelevant because the prime minister doesn't have sex with the living anyhow; he is a confirmed necrophiliac, restricting his bestiality to the dead.
and, finally, third, it is just wrong to indicate that his excellency is even interested in fucking pigs; all signs point to a clintonesque interest in having the excellent cock sucked exclusively.
p.s. this in no way implies that monica lewinsky (or any of the countless others) was/is either dead or a pig, nor that these chief executives' fixation on fellatio indicates latent homosexuality.
Was he on that website list? What was it? Ashley Madison?
That's DISGUSTING!
A live pig, on the other hand, seems far more reasonable.
I'm not sure how LSD would change things for the pig.
that dude Chanos is a sick puppy. How else would he know a pig on LSD? unless he has actually done such a thing.
was chanos ever in the cia? because you know the cia got the hogs tripping. if they would give meth to a sheep and tase it, they definitely would.
https://www.erowid.org/chemicals/lsd/lsd_history4.shtml
https://www.youtube.com/watch?v=EJEw3A_QO9o
http://io9.com/the-cia-once-ran-brothels-and-dosed-unsuspecting-custom-1...
http://www.popsci.com/science/article/2013-04/new-science-lsd-therapy
http://www.projectknow.com/three-of-the-craziest-government-drug-experim...
MS. PIGGY NEVER "LEFT"......
I think that's a fair comparison, but honestly, this is true about most economies around the world, they are bloated, inflated and sick.
http://ericsprott.blogspot.ca/
Another day, another picture of Janet Yellen on ZH
Pigs on acid. Yeah. How about people on acid?
Good to see the EU and US markets are up.
MOAR Chinese fear porn.
Says the genius who was shorting it before it ran to 5000, and is still 50% underwater in those shorts. Jim, the economy and stock market are two differnt things.
It should be obvious that no one knows what happens next. never has. But this is the premise of all bets...not knowing but thinking you know more or better than others. The "markets" are the pinnacle of hubris and fraud. What could possibly go wrong?
So homies how much money they lost for the past 2 days? 1-2 trillion? atleast. recon
Chanos is short the Chinese market. Perhaps, he is talking his book.
But the US market is fairly valued?
All stock markets are being manipulated higher including the Chinese and US markets.
But the US market is faily valued?
What the fuck is this "value" about? There is NO value beyond what deluded gamblers think other deluded gamblers will pay...pay in valueless trading script of central bank origination.
Value, my ass
Not only has the new leader cracked down on corruption, but has tightened the gubmint grip on their internet so more then 80% of the web sites are blocked and whatever does somehow get thru is promptly removed by thousands of hired trolls.
Control of information and freedom may be their bigger problem then their stawk market.
everything is FINE
BTFD
keep hope ALIVE
The brown acid is not poisonous.....it's just really bad acid.
Sit tight....we'll send you some granola.
BTW.....welcome to Woodstock.
"everything is FINE"
damn straight. and get some lipstick on that pig asap ffs.
How many of those Japanese loans paid for ghost cities?
name me a stock market that hasn't been scammed? We are looking at decades of pain
The Algos for the deep pockets will drive the market up and down to extract wealth from your account, and deposit said stolen wealth into the accounts of their owners.
We're all heading for a lost decade. China will emerge the strongest though.
Whoever can kill the most will emerge the strongest.
Hail Caesar!
Always ask:"What are we building?"
got this link from ZH comment a few weeks ago..........sure makes sense..........
''Even as they toppled the United States from the top of the tree the Zionists who control all Western nations are bringing millions of criminal, hopelessly uneducated and downright enemies of America across the now open southern borders and the borders of Europe to complete the destruction. This as the greatest white and Asian minds born abroad begin to emigrate not to the former land of the brave, but to grow the economy of the world’s new leading superpower China.''
https://endzog.wordpress.com/2013/08/07/financial-collapse-post-western-...
How many of these ME "immigrants" are the Chinese taking in? Chinese are balls deep in that area yet act like they are not involved.
the tribe will destroy china after they have 'properly fleeced it'......prolly take about 100 yrs..............there's lots of labor to be stolen in china........and the tribe wrote the book on parasitism........
China is not bombing the crap out of the ME.
Interesting analogy, lol. An entirely new take on the idea of crispy bacon.
-Argenta
wouldn't a pig on lsd be more likely to lie around the sty all day saying "oh wow" a lot?
Or it would freak out and start hurting itself.
Hmmm...maybe not a bad analogy after all...
Pig on LSD. Exactly describes, what Hillary Clinton looks like.
and explains her fugly daughter
Double burn! My eyes! Gaaahhhhh!!!! Why did you guys go there?! You baaaaasssstaaards!!!!
Deliverance.....That pig sure has a pretty mouth http://search.aol.com/aol/image?q=deliverance
lol
Pigs and LSD - sounds like and average night out for David Cameron.
The Pig ate all my acid.
What economy is NOT addicted to debt ?
Yingli isn't paying workers.
Solar "Reshuffling," AKA Bankruptcy, Accelerates in China; Late Wages and Disguised Layoffs at Yingli (YGE)Still waiting for Clowns on Acid to weigh-in on this one.
If I'm thinking of buying Chinese stock as an investment and they change the law to say that I'm not allowed to sell the stock, then my interest in purchasing stock evaporates.
Everyone knows that a pig on acid would just aimlessly walk around in circles, thinking through and fully examining which path to take, when to take it, how many boxes of Cracker Jacks to take on the trip etc. The better the acid, the longer the pig will contemplate each movement. Give the pig some good 4-Way Blotter, and the pig will circle for quite a while. Give the pig some liquid LSD on a sugar cube, that Pig will be tripping for days.
Now, a pig on PCP, you had better get the fuck out of the way. That Dust brings out the buck wild crazy shit in anything, animals included. Think Tequilla X 1,000. Yea, it's that bad.
Jeezus... When did getting high become so complicated...?
I liked the Blue Microdot lysergic acid diethylamid myself. Those were the days.
UK PM David Cameron: Did someone say pig, where!??
If China's stock market is a pig on LSD then the U.S. Stock market has to be a 2000 pound bull on LSD. In a crowded street. Shooting a machine gun.