November 11, 2009
Billionaire hedge fund investor Jim Chanos believes mainland China's economy is on the verge of collapse.
Another data point cited by the bears: overcapacity. For example, the Chinese already consume more cement than the rest of the world combined, at 1.4 billion tons per year. But they have dramatically ramped up their ability to produce even more in recent years, leading to an estimated spare capacity of about 340 million tons, which, according to a report prepared earlier this year by Pivot Capital Management, is more than the consumption in the U.S., India and Japan combined.
This, Chanos and others argue, is happening in sector after sector in the Chinese economy. And that means the Chinese are in danger of producing huge quantities of goods and products that they will be unable to sell.
Posted by Ghost of a flea at November 11, 2009 07:51 AM
The cement's easy to explain: it's for the bridge to Taiwan once President Zero throws them under his bus.
So, time to buy put options for almond cookie futures.