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Jim Chanos “China is on a bigger and faster treadmill to Hell”, Burton Malkiel Fires Back

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Jim Chanos "China is on a bigger and faster treadmill to Hell", Burton Malkiel Fires BackChina is on “a bigger and faster treadmill” than ever as property sales slow, said Jim Chanos, the hedge-fund manager who’s shorting banking stocks on a bet the market will crash.

Some quotes:

“The Chinese are beginning to realize that property prices can go down as well as up and this is going to be a very, very troubling development for the Chinese property market.”

“Most China observers were not talking about any landing three months ago and now they are confidently talking about a soft landing.”

Chanos said he takes the accounting of the Chinese banks “with a large grain of salt.”

“Western banks reported record profits in 2007 before collapsing.” “It’s all about credit. The last two banking crisis in 1999 and 2004, China banks had 40 percent non- performing loans to total loans and there were no recessions in those periods.”

“All the way down, there were 30 percent and 40 percent rallies from new lows, yet things kept deteriorating,” Chanos said, adding that he’s not covering his short positions in China as “the property slowdown has just started in the third quarter. Stocks are going to go up and down like yoyos. But we are keeping an eye on the fundamentals and they have just started to deteriorate.”

“The property slowdown or worse has started.” “The question is how it’s resolved.”

Burton Malkiel took a hit at Chanos in an interview with CNBC yesterday:

Makiel stated that “Chanos is just talking his book.”  Malkiel further stated that “These are the most attractive multiples I’ve ever seen.”

Full video below:

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