#1
ION TOPIX > UP NEXT: AL QAEDA IN PALESTINE [Gaza]? Org not formed yet but iff accomplished would be a great propaganda coup/victory for AL-QAEDA.
OTOH, AQ in Lebanon, + AQ in Jordan, are already declared AQ-affiliated differens Gruppes.
* SAME > PAKISTAN MAY BECOME MORE ISLAMIST, ANTI-US; + TALIBAN MAY BE DESCENDED FROM JEWS.
Indian DNA genetics Pert claims AF-PAK Taliban = PASHTUNS = one of the legendary "lost Tribes of Israel"???
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.
"Bubbles are best identified by credit excesses, not valuation excesses," he said in a recent appearance on CNBC. "And there's no bigger credit excess than in China." He is planning a speech later this month at the University of Oxford to drive home his point.
As America's pre-eminent short-seller -- he bets big money that companies' strategies will fail -- Mr. Chanos's narrative runs counter to the prevailing wisdom on China. Most economists and governments expect Chinese growth momentum to continue this year, buoyed by what remains of a $586 billion government stimulus program that began last year, meant to lift exports and consumption among Chinese consumers.
Still, betting against China will not be easy. Because foreigners are restricted from investing in stocks listed inside China, Mr. Chanos has said he is searching for other ways to make his bets, including focusing on construction- and infrastructure-related companies that sell cement, coal, steel and iron ore.
Mr. Chanos, 51, whose hedge fund, Kynikos Associates, based in New York, has $6 billion under management, is hardly the only skeptic on China. But he is certainly the most prominent and vocal.
For all his record of prescience -- in addition to predicting Enron's demise, he also spotted the looming problems of Tyco International, the Boston Market restaurant chain and, more recently, home builders and some of the world's biggest banks -- his detractors say that he knows little or nothing about China or its economy and that his bearish calls should be ignored.
"I find it interesting that people who couldn't spell China 10 years ago are now experts on China," said Jim Rogers, who co-founded the Quantum Fund with George Soros and now lives in Singapore. "China is not in a bubble."
Colleagues acknowledge that Mr. Chanos began studying China's economy in earnest only last summer and sent out e-mail messages seeking expert opinion.
But he is tagging along with the bears, who see mounting evidence that China's stimulus package and aggressive bank lending are creating artificial demand, raising the risk of a wave of nonperforming loans.
"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."
In December, he appeared on CNBC to discuss how he had already begun taking short positions, hoping to profit from a China collapse.
In recent months, a growing number of analysts, and some Chinese officials, have also warned that asset bubbles might emerge in China.
The nation's huge stimulus program and record bank lending, estimated to have doubled last year from 2008, pumped billions of dollars into the economy, reigniting growth.
But many analysts now say that money, along with huge foreign inflows of "speculative capital," has been funneled into the stock and real estate markets.
A result, they say, has been soaring prices and a resumption of the building boom that was under way in early 2008 -- one that Mr. Chanos and others have called wasteful and overdone.
"It's going to be a bust," said Gordon G. Chang, whose book, "The Coming Collapse of China" (Random House), warned in 2001 of such a crash.
Friends and colleagues say Mr. Chanos is comfortable betting against the crowd -- even if that crowd includes the likes of Warren E. Buffett and Wilbur L. Ross Jr., two other towering figures of the investment world.
A contrarian by nature, Mr. Chanos researches companies, pores over public filings to sift out clues to fraud and deceptive accounting, and then decides whether a stock is overvalued and ready for a fall. He has a staff of 26 in the firm's offices in New York and London, searching for other China-related information.
"His record is impressive," said Byron R. Wien, vice chairman of Blackstone Advisory Services. "He's no fly-by-night charlatan. And I'm bullish on China."
Mr. Chanos grew up in Milwaukee, one of three sons born to the owners of a chain of dry cleaners. At Yale, he was a pre-med student before switching to economics because of what he described as a passionate interest in the way markets operate.
His guiding philosophy was discovered in a book called "The Contrarian Investor," according to an account of his life in "The Smartest Guys in the Room," a book that chronicled Enron's rise and downfall.
After college, he went to Wall Street, where he worked at a series of brokerage houses before starting his own firm in 1985, out of what he later said was frustration with the way Wall Street brokers promoted stocks.
At Kynikos Associates, he created a firm focused on betting on falling stock prices. His theories are summed up in testimony he gave to the House Committee on Energy and Commerce in 2002, after the Enron debacle. His firm, he said, looks for companies that appear to have overstated earnings, like Enron; were victims of a flawed business plan, like many Internet firms; or have been engaged in "outright fraud."
That short-sellers are held in low regard by some on Wall Street, as well as Main Street, has long troubled him.
Short-sellers were blamed for intensifying market sell-offs in the fall 2008, before the practice was temporarily banned. Regulators are now trying to decide whether to restrict the practice.
Mr. Chanos often responds to critics of short-selling by pointing to the critical role they played in identifying problems at Enron, Boston Market and other "financial disasters" over the years.
"They are often the ones wearing the white hats when it comes to looking for and identifying the bad guys," he has said.
#2
I hope he's wrong. A crashing China will be an engine of destruction in the world economy & to their immediate neighbors.
Posted by: Mitch H. ||
01/11/2010 13:48 Comments ||
Top||
#3
So let's see, U.S. unemployment is officially at 10%. It is probably considerably higher when you consider underemployment and people who have fallen off the unemployment rolls. U.S. industry (if there is much left) is not hiring anyone. The federal government is about the only one hiring. This will probably slow or stop when the tax money runs out. You have to produce something to create wealth. The government does not create anything. If you only sell securitized junk in the market it eventually catchs us with you as it did in the current recession. If the American consumer is tapped out and doesn't have money to spend, our economy is not going anywhere in the long run. The banks seem to be sitting on TARP funds and not lending these funds out. But why would they provide credit since unemployment is so high and they are worried about getting the money back. China produces just about everything for us. If U.S. consumers buy less and less because they can't, China isn't going to be in a very good position. I can see that they China might have a crash--particulary if we have a "W" shaped double dip recession and can't buy their $hit. I guess I'm in a not very optimistic mood today.
WASHINGTON -- Dalton Trumbo (1905-1976) was a hero to the American left, partly because of his 1939 anti-war novel "Johnny Got His Gun." Trumbo's title modified the lyric "Johnny get your gun" from the World War I song "Over There." Trumbo's "Johnny" is horribly maimed in that war. Now we need a novel titled "Berkeley Got Its Liberalism." Pending that, we have Tad Friend's report, in the Jan. 4 New Yorker, on maimed Berkeley.
California, a laboratory of liberalism, is spiraling downward, driven by a huge budget deficit. So the University of California system's budget was cut 20 percent. Then the system increased in-state student fees 32 percent to ... $10,302. But that is still 70 percent below student costs at Stanford and other private institutions in California that Berkeley considers no better than it is.
Last September, Friend reports, 5,000 Berkeley employees and students rallied in Sproul Plaza, scene of protests that ignited the 1960s and helped make Ronald Reagan governor. Some protesters, says Friend, were "naked except for signs that read 'BUDGET TRANSPARENCY.'" At an indoor meeting, a "student facilitator" used a projection screen to summarize proposals, which included: "rolling strikes"; "nationalize all universities"; "socialist revolution"; "a tent city in Sacramento"; "create a shadow Board of Regents"; "occupy Wells Fargo Bank in downtown Oakland"; "worker-student control of the university"; "strike in March"; "act now, f--- March"; "capitalism is bad." Toward the end of the seven-hour meeting, participants shouted "General strike! General strike!"
In its impact on the institution, and on students trying to grip the lower rungs of the ladder of social mobility, the UC system's crisis is sad. This academic year, only one-sixth of the normal number of new faculty have been hired at Berkeley. The Cal State system -- a cut below the UC campuses -- will enroll 40,000 fewer students this year than last. But because the professoriate is overwhelmingly liberal, there is rough justice in its having to live with liberalism's consequences, which include this:
Kevin Starr, author of an eight-volume -- so far -- history of the (formerly) Golden State, says California is "on the verge" of becoming something without an American precedent -- "a failed state." William Voegeli, writing in the Claremont Review of Books, tartly says that "Rome wasn't sacked in a day, and California didn't become Argentina overnight." Indeed.
It took years for liberalism's redistributive itch to create an income tax so steeply progressive that it prompts the flight from the state of wealth-creators: "Between 1990 and 2007," Voegeli writes, "some 3.4 million more Americans moved from California to one of the other 49 states than moved to California from another state."
And the state's income tax -- liberalism codified -- intensifies the effects of business cycles on the state's revenue stream: During booms, the stream surges and stimulates government spending; during contractions, revenues dwindle but the new government spending continues. Voegeli says that if California's spending had grown no faster than population growth and inflation from 1992 to 2006, it would have been $65 billion less in 2006, and per capita government outlays then would have equaled not those of Somalia or Mississippi but of Oregon, which is hardly "a hellish paradigm of Social Darwinism."
It took years for liberalism's mania for micromanaging life with entangling regulations to make California's once creative economy resemble Gulliver immobilized by the Lilliputians' many threads. The state, which between 1990 and 2007 lost 26 percent of its factory jobs and 35 percent of its high-tech manufacturing jobs, ranks behind only New York, another of liberalism's laboratories, in the number of outward-bound moving vans.
It took years for compassionate liberalism to make California's welfare menu contribute to the state becoming an importer of Mexico's poverty. It took years for servile liberalism to turn the state into what Voegeli calls a "unionocracy," run by and for unionized public employees, such as public safety employees who can retire at 50 and receive 90 percent of the final year's pay for life.
Friend reports that when the seven-hour meeting ended, the protest moved to the UC president's house. Two buses carried "some hundred Berkeley students and members of AFSCME." Perfect.
The American Federation of State, County and Municipal Employees is one reason why California's government employees -- their numbers grew 24 percent between 1997 and 2007 -- are the nation's most highly compensated. And why California's economy is being suffocated by the weight of government. And why the state's budget has little left over for Berkeley.
If you cross the North Korean border illegally you get 12 years hard labor.
If you cross the Iranian border illegally you are detained indefinitely.
If you cross the Afghan border illegally, you get shot.
If you cross the Turkish border illegally, you spend the rest of your life
in prison!
But, if you cross the U.S. border illegally and enter California you get:
A driver's license
A social security card
Welfare
Food stamps
Voting rights, no ID required
and, free health care?
Always remember, folks, it isn't just home-grown liberalism that is killing California. This state is a victim of your federal government which has been derelict in its duty to protect us from being overrun by illegal aliens. I've said it before and I will take this opportunity to say it again: this is the state that gave you Richard Nixon and Ronald Reagan. Could we do it again? With all the demographic changes and all the other socialist bullshit that has been forced upon us by Washington, DC? When you take than holier-than-thou position that I've noticed more and more lately on Rantburg, remember you are all just as much to blame for what has happened to California as I am. We are a part of your country, the United States, so what is happening here should alarm you just as much as it does me. And remember this too, if they can do it to California they can do it to you just as easily.
#4
Open borders are an issue, but not the biggest part of the California disaster.
The biggest political party/persuasion in the USA is the "Free Lunch" Party, whose members want to spend, spend, spend on programs they favor and never ever pay the price, at least not in their lifetimes. The Free Lunch Party has both liberals & conservatives in it.
#6
Lucky Texas. But somehow I don't think Texas has as many jobs for them as we do. Look at it this way, we used to be a red state and now we're blue. How do you think an Orange County congressional district that once elected B1 Bob Dornan turned around and elected Loretta Sanchez? OK, maybe Dornan was a kook but you'd think if you were a member of the Republican party you'd have been screaming about the transformation of all those electoral college votes from Republican to Democrat. But there was never a peep. Why not?
I don't deny that California politicians are irresponsible. They are the worst. But they've been operating hand-in-hand with the federal government in both Republican and Democrat administrations. The federal government has to take its fair share of the blame for California.
What's gonna happen when we stop paying for all the goodies those illegal aliens get? Will AG Holder take us to court for disobeying federal mandates?
#7
When you make cognizant decision, luck in not involved. Texas and Florida did not develop a state welfare and program system like California even though they too have migrant labor businesses. That is choice.
When a federal judge mandates equal access to programs for citizens and illegals alike, it is relative to within that state for state programs. They do not decree that people in one state are entitled to program standards of another state. If one state's government chooses to engage in programs which are generous compared to others, the other states are not obligated to provide similar levels of remuneration to those within their borders. That is a local choice that results in either attracting or deflecting migration and its consequences.
#9
It would be interesting if illegal aliens were shoved across the border at San Ysidro with only the clothes on their backs with everything else confiscated by the state as partial compensation for the cost of providing for them. If the state can confiscate property used in the commission of a crime, there seems to be precedent. Also, shut down electronic remittances.
#12
Schools, hospitals and prisons were also affected by the Golden State's wonderful judicial system. Few, if any other states, mandate things like aromatherapy and alternative treatments for inmates. That crap can't be cut....it's been mandated by the courts in your state.
So now, when California's schools are a national joke, your hospitals are going broke, and your prison system is failing, you try to turn all of that on the rest of us, saying the rest of us are all to blame, too? You have got to be freakin' kidding me.
The rest of us were never consulted on whether or not your state's dumb policies should have been enacted. Nope, never, not once. We certainly never got to vote on any of it. California voters made all those idiot decisions by themselves, thanks. Your state plowed ahead, did boneheaded things, and if your post shows the typical attitude (hope not) you still don't want to own up to it.
Texas, New Mexico and Arizona have been dealing with the same kind of stress on their school, health care and prison systems from illegal immigration and in-migration from other states. Their budgets got hammered. Arizona's got a huge deficit, and New Mexico could use some help, too. None of those three states are expecting, or worse yet, demanding a bailout. Take a hint.
#13
The bottom line is that politicians of both parties are hooked on unrestrained illegal immigration as an ecomomic stimulus. Americans have not reproduced in big numbers since the advent of the birth control pill. Even if illegals are a strain on welfare systems they do produce demand for housing, give employers cheap and disposible workers etc. Until we either have more kids or change the population growth driven ecomomic model that our system demands, we are stuck.
Face it, if large numbers of illegals move into your neighborhood, what do you do? You buy a new house in a newer area.. This mechanism has driven california's economy for 50 years.
#1
"Prevarication", by the way, is the attorny's word for "lie".
Posted by: Bobby ||
01/11/2010 12:34 Comments ||
Top||
#2
I used to enjoy watching C-SPAN when it was part of the regular TV viewing package or promo.
ALAS, 'TIS NO MORE, AS IT SURRENDERED TO CABLE PAY-PER-VIEW + HENCE OBSCURITY, like professional boxing. GOT THEIR $$$ BUT AT THE SAME TIME ALSO LOST THEIR CORE = LOYAL AUDIENCE.
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
WASHINGTON -- Dalton Trumbo (1905-1976) was a hero to the American left, partly because of his 1939 anti-war novel "Johnny Got His Gun." Trumbo's title modified the lyric "Johnny get your gun" from the World War I song "Over There." Trumbo's "Johnny" is horribly maimed in that war. Now we need a novel titled "Berkeley Got Its Liberalism." Pending that, we have Tad Friend's report, in the Jan. 4 New Yorker, on maimed Berkeley.
