TOP CONTRARIAN INVESTOR JIM CHANOS LOSES TASTE FOR CHINESE *** Jai Maharaj posts
and/or www.mantra.com/jai
By Ed Liston
Benzinga
Friday, January 8, 2010
Contrarian investor Jim Chanos, known for his short selling prowess,
has now made it known that he is betting against one of the biggest
stars of today: China Inc.
Chanos and his aptly named fund, Kynikos (Greek for �cynic') earned
their stripes in Wall Street by foreseeing the problems of Enron,
Tyco (NYSE: TYC), Boston Market and other corporate megastars. Chanos
warns that China's economy is hyperstimulated by credit excess and
headed for a spectacular crash. He even suspects that the growth rate
of 8% is cooked. Chanos doesn't seem to be bothered by the fact that
he is betting against the collective wisdom of the likes of Warren
Buffet, George Soros, and Wilbur Ross, among others.
Chanos is focusing on infrastructure-related commodities like copper
and iron ore in his bet against China. A point to be noted is that he
excludes gold from the list as it not an infrastructure commodity.
According to him, the main risk is that China will overproduce and
end up with a surplus that it cannot sell.
It is widely believed by analysts that a lot of speculative foreign
inflows are doing the rounds in China's real estate sector, leading
to potential asset bubbles. Popular opinion is that China's growth
will sustain its momentum with what remains from the $586 billion
government stimulus program for exports and consumption. What also
goes unsaid is that most of the world is betting on China to lift the
global economy out of recession.
In the meantime, other strategists like Robert Griffith of Cazenove
Capital have gone on record to say that India and Brazil present
safer options compared to China.
US companies like Ford (NYSE: F), Microsoft (NASDAQ: MSFT [FREE Stock
Trend Analysis]), Google (NASDAQ: GOOG) and others that are heavily
invested in the Chinese shangri-la may want to take note of the
billionaire investment wizard who once foretold the fall of Enron.
More at:
http://www.benzinga.com/general/81518/top-contrarian-investor-jim-chanos-loses-taste-for-chinese
Jai Maharaj, Jyotishi
Om Shanti
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