"In fact, like many of us, sometimes they don't have a clue."
That’s from Jim Chanos, who sat down on Friday with CNBC’s Fast Money A-Team which, like the rest of the mainstream financial media punditry, can’t seem to figure why things unravelled so quickly last week.
Chanos was referring to the Chinese government and more specifically to their efforts to simultaneously manage a decelerating economy, a currency devaluation, and a bursting stock market bubble.
As we’ve said on too many occasions to count, the task is quite simply impossible, a reality which often manifests itself in contradictory policy initiatives and directives emanating from Beijing. Despite the plunge protection national team’s best efforts to channel some CNY900 billion into SHCOMP large caps, China’s stock market looks to be on the verge of an outright meltdown, and the effort to support the yuan after the devaluation is draining liquidity and tightening money markets, rendering policy rate cuts less effective even as further easing becomes more necessary with every FX intervention.
In short, the situation is, as Chanos puts it, "worse than you think," and because it’s sometimes hard to get through to CNBC’s Halftime crew, Chanos reiterated the sentiment: "Whatever you might think, it's worse."
See the interview below.