The Chinese banking system is built on quicksand and that's the one thing a lot of people don't realize. Everybody seems to think it is a free and clear open checkbook. It's not. The banking system in China is extremely fragile. James Chanos bankbuildcheckbook share on social
Bubbles are best identified by credit excesses, not valuation excesses. And there's no bigger credit excess than in China. James Chanos bigbubblechina Change image and share on social
What we define as a bubble is any kind of debt-fueled asset inflation where the cash flow generated by the asset itself - a rental property, office building, condo - does not cover the debt incurred to buy the asset. So you depend on a greater fool, if you will, to come in and buy at a higher price. James Chanos assetbubblebuild share on social
And so it can be very much in the interest of bank A to sell-short bank B shares, or buy CDSes on bank B, because they have exposure to bank B. It's the responsible thing to do as a fiduciary, and yet if everyone does it at the same time, it's destabilizing because everyone is selling. James Chanos bankbuycdses share on social
It's almost sickening now that the regulators 'on the beat' while the biggest credit collapse in modern financial history unfolded are now patting themselves on the back for their 'brave' stance on short-selling! James Chanos backbeatbig share on social
I'll always understand the Schadenfreude aspect to short-selling. I get that no one will always like it. I'm also convinced to the deepest part of my bones that short-selling plays the role of real-time financial watchdog. It's one of the few checks and balances in the market. James Chanos aspectbalancebone share on social