Korean Job Discussion Forums

[madoka]

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

Link has the full article from the NY Times.

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.

. . .

"In China, he seems to see the excesses, to the third and fourth power, that he's been tilting against all these decades," said Jim Grant, a longtime friend and the editor of Grant's Interest Rate Observer, who is also bearish on China. "He homes in on the excesses of the markets and profits from them. That's been his stock and trade."

Mr. Chanos declined to be interviewed, citing his continuing research on China. But he has already been spreading the view that the China miracle is blinding investors to the risk that the country is producing far too much.

"The Chinese," he warned in an interview in November with Politico.com, "are in danger of producing huge quantities of goods and products that they will be unable to sell."

[caniff]

This topic might stimulate more discussion over in the CE forum, I'd imagine.

[kinerry]

You need someone to tell you this?

They are growing because of cheap labor, but once growth hits a certain point the standard of living goes up and they need to pay their workers more. Eventually it all comes crashing down, they will become a service economy just like the US some day.

[Gibberish]

Yeah, it's coming, maybe not in the next year, but sometime soon. They're overdeveloping and it doesn't take much to see it. Their infrastructure is horrible and their valuations are bloated. Their capital is, as the article says, probably cooked, but the "eye-popping" growth is blinding too many small-time investors right now.

They probably won't completely crumble, but will suffer at least a recession. I'd say undersell China right in 6 months, or at least I would if I had any extra money to blow.

[Gibberish]

Also if it were me, I'd put money into India, not China. India has its head on its shoulders.

[kinerry]

[donducky]

Nonsense. The Chinese are already transitioning out of an export-based economy. They'll continue making all those goods and sell them to themselves!

It's utterly brilliant, what the Chinese have done, these past three decades or so--they've co-opted the capitalist, free-market, globalist system to their decisive vantage, while fooling lots of ignorant bozos into imagining that they'd abandoned their Marxist ideology. Didn't Karl Marx say that the capitalists would SELL the Communists the rope which they'd be strung up by? Isn't China now proving the prophetic truth of those words?

A simple formula:
Socialism = Planned economy, ie, order.
Capitalism = Unplanned economy, ie, chaos.

When strict order failed to work for the Chicoms, they submitted to a measure of chaos. They've now worked that chaos, that capitalist element in their economic mix, for all it's worth.

The coming years will prove China, the Chinese Communist Party, and Karl Marx, the victors.

Mass-murdering psychopath scum like Barack Insane Obama and his legions of pseudo-left, Satan-worshiping followers will be decisively defeated.

FORWARD TO THE VICTORY OF COMMUNISM!

[djsmnc]