Contrarian Investor Sees Economic Crash in China

[caseymoz]

Source: New York Times


SHANGHAI — James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true.
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Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.

As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.

Read more: http://www.nytimes.com/2010/01/08/business/global/08chanos.html?scp=2&sq=china%20economy&st=cse

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This might be the Great Bubble of China?

Our economy has depended more and more on bubbles to drive growth since Reagan. The last three expansions have been due to bubbles. I begin to suspect that what he says is true.

For those not registered to the NY Times, here is Yahoo's link to the article:

http://finance.yahoo.com/retirement/article/108534/contrarian-investor-sees-economic-crash-in-china?mod=retire-planning

[AngryAmish]

1. If true, how many people do you think will die in the Chinese civil war?

[dixiegrrrrl]

2. I tend to trust more in what Jim Rogers says about it.

from the article:
"I find it interesting that people who couldn't spell China 10 years ago are now experts on China," said Jim Rogers, who co-founded the Quantum Fund with George Soros and now lives in Singapore. "China is not in a bubble."

edit to add:
Upon re-reading the article, I can see both positions can be accurate.
Rogers says China is not IN a bubble, and the other guy is predicting a bubble will happen.

[SpiralHawk]

3. China is following Republiconomic-Style Strategery toward Epic FAIL

Everyone on the planet should have been suspicious when...

Commander AWOL's itchy brother, Marvelous Marvin Bush (R) got all Intimate Chummy and ProfitEEry with the 'Godless Yellow Commies' (as republicon homelander cronies might say in one of their typical triple-mindf*ck rhetorical spins).

mYstEriOuS mArViN bUSh story: http://www.apfn.net/messageboard/04-10-05/discussion.cgi.55.html

BUSH BOYS - Commander AWOL (R) and Marvelous Marvin (R)
http://www4.pictures.gi.zimbio.com/Olympics+Day+1+Basketball+dd9C2FmY8RDl.jpg

[naaman fletcher]

4. The Bush's have always been in China.

GHWB helped open up China politically, and his brother Prescott was ultimately in charge of opening it up to trade.

[SpiralHawk]

5. ...and they screwed working men & women of America doing it...

...while enriching their fatcat republicon cronies...

[naaman fletcher]

6. to be fair..

when it comes to this sort of thing, there is only one political party, the rich and the corporations. Just look at the bank bailouts. There is no policy difference between the R's and D's. It's just looting the country for the rich. China is the same thing.

[golfguru]

8. +1

[SpiralHawk]

14. Nope. I don't buy that at all.

I just don't lump the Ds in with the Rs the way the R Fail Freaks would like everyone to do - spread the crap and blame around. Ds are not wholly innocent, granted, but the Rs and their perverse Family & Financial Values have flushed America's economy, environment, and honor down the planetary crapper for years to come.

No amount of spin -- and no attempt to pass some of the ugly buck to Ds and weasel out of responsibility -- will absolve Republicons of their moral, fiscal, and defense FAIL.

R's OWN the Epic FAIL.

And most Americans know it.

[Name removed]

7. Deleted message

Message removed by moderator. Click here to review the message board rules.

[high density]

9. As long as we continue throwing billions to China to our own economic detriment...

...they will be fine.

[Turbineguy]

10. Enron went...

so China is going?

Chanos needs 5000 years of civilization himself.

[caseymoz]

12. It's not the culture talked about, it's the economy.

An economic reversal in China could be a worldwide calamity.

[depakid]

11. China is the poster child for overshoot and collapse

and not just on the economic front.

[Strelnikov_]

13. Agree

The more they embrace U.S. style hyper-capitalism, the bigger the train wreck will be.

[bemildred]

15. Bubbles always pop.

That's how you know it's a bubble really. The timing is a different question. It seems clear already that the current global economic order continues because none of the large players has an interest in bringing it down, yet.