Chanos vs. China

The influential short-seller is betting that China's economy is about to implode in a spectacular real estate bust. A lot of people are hoping that Chanos - who called Enron right - is wrong this time.

finance.fortune.cnn.com...

Very informative article. Be sure to watch the short video interview at the bottom with Mr. Chanos

If this unfolds, China has very stormy days ahead. I guess only time will tell. But what he is saying makes alot of sense.

reply to post by Tinman67


An excellent read.

It sounds as if the ChiComs have essentially stolen a page from the american playbook - self deceit, get rich quick, buy what you can't afford, expect indefinite growth and returns, and %$#@ the future.

When it all turns to crap, folks are gonna harp about how "the capitalist system failed us."

reply to post by MMPI2


You know that if a tree grows too fast that the top has to be cut off or it will collapse???
I could see alot of Chinese millionaires being "removed" if things go sour.

China's real estate will never, ever implode.

The people of China have ZERO right to declare bankruptcy. The Communist Regime can keep them in their homes and pay 75% of whatever wages they make....until they die.


Unlike our economy where HUD reported +10 million illegal immigrants alone already walked away from mortgages leaving us to pay that $4 Trillion debt alone.

There will be no housing collapse in China. They can't walk away from their mortgages.

It could also be a case of preparing for after-a-war. If I remember US history correctly after WWII there was a big problem with tons of G.I.'s returning home but not enough places to live for all of them. The solution was found in the invention of the Suburb, and rapid development was put into full force. Maybe this time, someone has figured out how to avoid the homeless soldier problem before the fighting actually starts.

I have to admit though that the article argues against this, as most of the overdevelopment and empty homes are upperclass. So it can't be housing for future veterans. . . . unless . . . Unless, it's a plunder based war.



Fascinating article.

Lot of juicy details and historical comparisons.


David Grouchy

I don't think the collapse will be in defaulted loans. It will be in a massive down turn in housing starts and a massive reduction in pricing. People who bought there houses/flats/condos....etc. and paid maximum dollar for them will find that they are worthless (or worth a lot less). This huge down turn would make a ripple throughout the world.

It's not a good thing.

On a side note, the Chinese can own the structures on the property but they cannot own the land. The state/country owns the land....if I read correctly. Bankruptcy does exist in China.

reply to post by Pervius


what happens to all those buildings, houses, etc. if no one takes possession and takes responsibility for the upkeep and maintenance?

Wouldn't the "owner" take a bath because of those losses?

reply to post by MMPI2


Good point. And we all know the quality of Chinese workmanship Add in the tendency for earthquakes and such it would be a huge mess.