Gustavo Ballvé on May 18th, 2011
Food for thought, Home, Industries, Investment Themes, Mental models, Portfolio Management, Real Estate, Risk management, Signal or Noise

Two stories reached us almost simultaneously: One was Jim Chanos’ latest interview discussing his bearish themes in China. The CNBC “forum” isn’t the best for something so complicated, so we try to provide more background inside. Another was a story found in the NY Times called “What Asian Century?” that calls for emerging Asian countries to get their act together before they can follow Japan and South Korea’s route. Interestingly, even though Brazil has some clear positives compared to this part of the world, it also shares some of the problems and doesn’t share some of the pluses (such as a strong focus on higher education and technology investments).

The video of the May 18th interview at CNBC (11:25):

It’s interesting to note parts of his analytical framework in the video above. There are hints of “field investigation”, sure, but the gross of what he discusses seems to be a bit more “big-picture”. It’s probably due, not in a small part, to a problem with the forum.

OTHER HIGHLIGHTS:

The Asia Development Bank seems to agree with the “What Asian Century” article’s main theme: one teaser for its “Asia 2050: Realizing the Asian Century” report was called “Asia’s Rise is Probable but Not Preordained”, and a video discussing the report was called “3 billion people could enter the ranks of the affluent if formidable challenges are addressed”. Here’s a link straight to the roughly 140-page PDF.

A classic November 2010 article at Fortune: “Chanos vs. China”. It includes two “supplements”, one on why he should be worried and another on Xi Jinping, a potential sucessor to Hu Jintao. It also includes the video below (3:48):

A 55 minute, low-quality video with the bulk of his arguments about the “China bubble”.

He also spent 29 minutes with Charlie Rose in April 2010 – we couldn’t find the embed link.

ALSO INTERESTING (and some opposing opinions):

Jim Chanos is wrong – Jan 10th 2010 – Forbes.com – It wouldn’t be Buysiders.com if we didn’t seek opposing opinions.

In fact, and also back in January 2010, Tom Friedman wrote an Op-Ed in the NY Times called “Is China the Next Enron?” – essentially arguing that Mr. Chanos should be cautious of the “unintended consequences” of all this Chinese investment in higher education, infrastructure and technology. His question is: who knows what kinds of innovations, connections, collaborations and productivity improvements could be generated by these investments? He thinks that there’s potential for growth that Jim Chanos is maybe not taking into account.

April 2011 interview at CNBC with both Jim Chanos and Mohamed El-Erian of PIMCO, who has a less pessimistic view than Jim’s.

April 2011 debate between Jim Chanos and Stephen Roach (22:02), on different sides of the issue. It includes foul language, but thankfully it’s just a joke…

Feb. 2011 interview with John Authers of the Financial Times (5:26) – FT.com doesn’t provide an embed link either.

Satellite images of China’s ghost cities by Business Insider.com – how eerily similar to the debate between David Einhorn and Bruce Berkowitz regarding St. Joe’s… (Dec. 2010)

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