Not Bearish Enough?

From Bloomberg:

Hedge-fund manager Jim Chanos said investors concerned that U.S. technology stocks such as LinkedIn Corp. are overvalued should turn their attention to China.

Chanos, the president and founder of Kynikos Associates LP, said his “dramatic” bet against Chinese real estate may not be sufficient. While LinkedIn, the first social-media company to go public in the U.S., traded as high as 31 times sales last week, overvaluation is more widespread in China, he said.

The bubble is really on the other side of the world,” Chanos said during a Bloomberg Television interview in New York today. “What my team found, they actually came back saying we’re not bearish enough, interestingly enough,” he said. “The signs of overcapacity were even much greater than their last visit which was late last year and increasingly the executives that they met with were sounding a little bit more uncomfortable about the current situation.”

The investor, who was among the first to predict Enron Corp.’s collapse, said Chinese developers have too much land on their balance sheets, similar to the U.S. before its housing market crashed. He has been forecasting a Chinese housing crash since last year. China’s economy expanded 10.3 percent in 2010 and the country has been aiming to curb climbing house prices.

“If you look at the balance sheets of the developers you’d be hard-pressed to see how healthy they are because they’re all loaded up with land just as our developers were at the top of our market,” Chanos said.


Bubbles, bubbles everywhere, which one will pop next?

The bond bubble in Europe and the US?

The real estate bubble in China, Canada and Australia?

Perhaps stocks are even a bubble as QE2 winds down?

In my experience, looking at the a company or nation's balance sheet reveals critical information. Too much leverage always ends badly. Sometimes it just takes longer to manifest than one expects.

My inverse copper ETF is a bet against China's crazed real estate market. As I anticipate demand for copper to collapse.

Am I right, wrong or just making a call too early?


  1. Fed Gave Banks Crisis Gains on $80 Billion Secretive Loans as Low as 0.01%

    Something to make you hurl PW

  2. Bill, that is one of the most disgusting things I have seen from the Federal Reserve. Not only do they meddle with US interest rates, they lend to foreign banks at zero percent while they common people are thrown under a bus.
    How long will we tolerate this?


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