Steve Posted January 10, 2010 Report Share Posted January 10, 2010 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. 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. "Bubbles are best identified by credit excesses, not valuation excesses," he said in a recent appearance on CNBC. "And there's no bigger credit excess than in China." He is planning a speech later this month at the University of Oxford to drive home his point. As America's pre-eminent short-seller -- he bets big money that companies' strategies will fail -- Mr. Chanos's narrative runs counter to the prevailing wisdom on China. Most economists and governments expect Chinese growth momentum to continue this year, buoyed by what remains of a $586 billion government stimulus program that began last year, meant to lift exports and consumption among Chinese consumers... more Link to comment Share on other sites More sharing options...
Gadfly Posted January 10, 2010 Report Share Posted January 10, 2010 I read the same article. Fascinating. I don't know much about China so it's hard for me to comment on the specifics, but I'd say there is ample evidence to establish that when economic growth is built of a house of cards of corruption and phony accounting (say, Thailand before the 1997 crash), it leads to a big time crash. If that happens in China, I wonder if they will, as happened in 1997, blame it on George Soros, etc., rather than stepping up to the plate and taking responsibility for the corruption that caused the crash? Link to comment Share on other sites More sharing options...
Steve Posted January 10, 2010 Author Report Share Posted January 10, 2010 If China collapses and like you I don't know enough about it all to say for sure, America will be broght down with it. They are buying our debt. They are financing us right now. If they stop buying we are in deep doo doo. And I mean, fertilizer shoveler deep. We goout of jail when the Chinese took over from Japan, whom was buying our debt in the '80s and '90s and then couldn't afford to because of their own collapse. China took over and if they are out, I don't know who will. Link to comment Share on other sites More sharing options...
sanddawg1 Posted January 10, 2010 Report Share Posted January 10, 2010 If China collapses and like you I don't know enough about it all to say for sure, America will be broght down with it. Along with the rest of the world; the 2 biggest economies in the world crashing would be the end of the global economy as we know it. The biggest atvantage countries like the USA and Thailand have is thier ability to produce FOOD at least they can feed them selves. Other countries don't have that atvantage. S1 Link to comment Share on other sites More sharing options...
bangkokrover Posted January 10, 2010 Report Share Posted January 10, 2010 There's plenty of anecdotal stuff suggesting that China has been fiddling its data. For example (I can't remember the exact figures without searching). In early 2009 the Chinese government targeted 8% growth as a requirement for absorbing new job seekers. At the next GDP release they suspiciously came up with 7.9%,but electricity generation was down for the same period. During last year they announced that several million cars had been sold, but petrol consumption had not increased. Did the car buyers not use their millions of new cars? or perhaps were they paper sales by government agencies? Australia's success story is very dependent on China's, so if Mr. Chanos is right, perhaps the best and easiest way to profit would be to short the Aussie Dollar. Link to comment Share on other sites More sharing options...
Old Hippie Posted January 10, 2010 Report Share Posted January 10, 2010 If China collapses and like you I don't know enough about it all to say for sure, America will be broght down with it. Along with the rest of the world; the 2 biggest economies in the world crashing would be the end of the global economy as we know it. The biggest atvantage countries like the USA and Thailand have is thier ability to produce FOOD at least they can feed them selves. Other countries don't have that atvantage. S1 SO is the "Global economy" really a good thing then? many have said no, for this very reason. Regarding China, I know nothing about the place at all. From what I have been told by experts is "...Even the Chinese have no clue, they are a mystery wrapped in an enigma, surrounded in riddles..." Which basically, I take to mean they have no clue about themselves. But, I have also always been told 1) they can't feed their own people (not sure I buy that, though they did get creative with rat meat and card board recently) 2) Their economy is built on oppression, forced or dirt cheap labor 3) the people by and large are still uneducated and poor, living at or below the poverty level. All of which, IF true cannot last forever. What I have seen from working with these people here is, they are big on having more than the other guy, doesn't matter if they rob cheat lie, swindle etc to get it as long as they have it. They love standing on others and oppressing them, even/especially, their own people. Said that to say this, I thus don't see where all the hype comes from, I am certain they lie and "cook the books" but then I am sure all economies do. I really trust no one when it comes to money and or world domination. Link to comment Share on other sites More sharing options...
Steve Posted January 10, 2010 Author Report Share Posted January 10, 2010 What I have seen from working with these people here is, they are big on having more than the other guy, doesn't matter if they rob cheat lie, swindle etc to get it as long as they have it. They love standing on others and oppressing them, even/especially, their own people. Said that to say this, I thus don't see where all the hype comes from, I am certain they lie and "cook the books" but then I am sure all economies do. I really trust no one when it comes to money and or world domination. Its an Asian thing. As we all know all the Asian countries are different and have their own unique characteristics but there is an overriding Asian culture that they all share. They all do some sort of bowing to some extent, wether its a wei or as in Japan and Koera a formal bow. They also have a strong concept of 'face' and I think that concept makes them want to seem they have more than the next guy. Worst bosses I've ever seen is an Asian boss. Doesn't matter the country. They treat their employees like shit, including and even moreso their own kind. Korean shops at LA swapmeets employ largely latinas as they are bilingual and being women are pleasing to male shoppers and can help women shoppers with size, advice, etc. I've noticed they don't give them a moment's rest. They are also scrimping on breaks, lunch, etc. Very overbearing bosses. When I worked in Japan, I had a western boss. I was in management. My Japanese counterparts weren't as easy going as the gaijins. Asian bosses have far more say and control over their employees. Things that a western boss wouldn't or couldn't do to their employees, (up to and including actually hitting in some cases) asian bosses by and large will do to their employees. Link to comment Share on other sites More sharing options...
Gadfly Posted January 10, 2010 Report Share Posted January 10, 2010 Asian bosses have far more say and control over their employees. Things that a western boss wouldn't or couldn't do to their employees, (up to and including actually hitting in some cases) asian bosses by and large will do to their employees. I have seen Thai management here hit employees and do worse. I am trying to imagine what would happen if I, a Farang manager, pulled a stunt like that. Perhaps that is the difference: I cannot do this kind of stuff in my own country or here (the consequences are unimaginably bad), and so I know not to do it. Not so with local management. Link to comment Share on other sites More sharing options...
USVirgin Posted January 10, 2010 Report Share Posted January 10, 2010 Worst bosses I've ever seen is an Asian boss. Doesn't matter the country. They treat their employees like shit, including and even moreso their own kind. Don't even get me started! We're straying from topic and I'm drunk at the moment, otherwise I've got some stories to tell involving the local Asians being mistreated compared to their round-eyed counterparts. Link to comment Share on other sites More sharing options...
USVirgin Posted January 10, 2010 Report Share Posted January 10, 2010 Gaddy: I once worked for an Asian company that was forced by court order, as a result of sexual harassment lawsuits in the US, to have all local management undergo training, myself included. These guys completely laughed the training off as if, as expats, local laws didn't apply to them. (I'm in my 20s witnessing managers in their 50s giggling when hearing words like vagina and penis). Link to comment Share on other sites More sharing options...
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