Either the renowned Jim Chano's has lost his mind or he is trying to push Chinese real estate stocks down so he could load up on them very cheaply. I vote for the later. He is no dummy and very shrewd!
His below comments over look one very big critical thing: the Chinese do not build for the present but wisley for the future. They have a population three times that of the US and even though they have moved hundreds of millions out of the rice paddies they still have a few hundred million more to go.
Now let me ask you this: if you have two working bain cells and you were going to move millions of people into a new location would you not LOGICALLY make sure you had a place for them to live with adequate water, sewers, power, roads, etc. etc.? Of course you would! The Chinese are wise and careful planners as witnessed by their stunning success in advancing their civilization. In contrast, we are idiots and decling!
Jim's comments from the Bloomberg wires:
"He said he analyzed Chinese government figures and concluded that China is on pace to develop about twice as much in the coming years as it had built in the past three.
"Avoid anything having to do with the Chinese property market — steel, cement, iron ore," he advised investors, saying that he's been shorting these sort of plays."
Sentiment: Strong Buy
You are a funny guy. The Chinese wise and careful planners.....that is so rich. Make sure there is water, sewer, power, roads, etc.... wow you are naive. The Chinese depend on lazy westerners who do not look or understand.
Chanos has been short china everything as far back as I can remember. And he has been losing his rear end. He is short chinese banks, and they have skyrocketed.
He has been short HPQ, which is a huge turnaround story. He is short Dell which is in leverage buyout. He was short Herbalife which Icahn has taken 15% stake.
Jim Chanos is applies conventional western logic to China which does not work because of huge social, cultural differences.
You're right. Building now serves two purposes. Creates jobs number one. Number two, the cost of materials will be higher in the future. So why not build those towns and cities cheaper now than wait and pay X% more?