Hedge Funds Short China

China is going through a property boom. The master of short selling, Jim Chanos, questioned China’s real estate investments and said he is now shorting China. Al Jazeera’s Melissa Chan reported from Ordos Shi in Inner Mongolia, a town of one million people built with stimulus money that has almost no residents.

Shorting China was one of Chanos’ favorite investments in 2010. Chanos didn’t explain how specifically he shorts China but he hinted at shorting companies and industries that are benefitting from China’s real estate bubble. Recently Jim Chanos raised $20 Million for an offshore hedge fund that would probably place short bets against China’s property bubble. When economists like Nouriel Roubini make contrarion and pessimistic predictions, we don’t really pay any attention. They have no skin in the game. Not many people remember pessimistic predictions that didn’t come out true in the past. For example, Roubini’s recession predictions in 2004 fell flat even though oil prices surpassed the $40 per barrel mark. Today we would love to buy oil at $40/barrel. Six years ago Roubini thought it is a huge concern for the economy.

Jim Chanos on china map

We don’t pay attention to contrarion economists’ predictions but we do pay attention to a multi-billion dollar hedge fund’s predictions. If Chanos’ predictions are wrong, he would lose millions of dollars.  Chanos isn’t alone in his pessimistic views about China, either. Other hedge fund managers are starting to short China as well. According to The Telegraph, Hugh Hendry of Eclectica Asset Management has launched a distressed China fund. Corriente Advisors‘ Mark Hart, who considers China as an enormous tail risk, also launched a China fund. Monaco based hedge fund, Pivot Capital Management, is also shorting China. The Telegraph reports that there is also a Mayfair hedge fund manager who is shorting China.

Most investors don’t agree with China bears. They don’t think China is on an “economic treadmill to hell”, as Chanos calls it. Harvard University’s Kenneth Rogoff disagrees. Last year, Rogoff predicted that China’s growth rate will plunge to as low as 2% after its bubble burst. His prediction isn’t as bold as Chanos’. Rogoff’s time frame for this prediction is 10 years. Insider Monkey, your source for free insider trading data, hasn’t made up its mind. We are waiting for Robert Shiller’s comments about China. Shiller is the ultimate authority on bubbles and if he calls China a bubble then it must be a bubble.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!