Jim Chanos, founder of Kynikos Associates Ltd., and Jim O’Neill, former chairman of Goldman Sachs Asset Management, talk about China’s economy, real estate and financial markets. They speak with Tom Keene at the Bloomberg Markets 50 Summit in New York. Here is a direct video link.
As you listen to the debate, realize that O’Neill is in the risk selling business ala Goldman Sachs, and Chanos is in the risk management business. Chanos has made money shorting Chinese stocks over the past 5 years, O’Neill has been a perma-bull recommending investment in China, the BRICS, and a commodities super-cycle (which he insists is not over) even as Chinese stocks and commodity companies have fallen more than 70% since their cycle peak in 2007 through 2011. O’Neill is a confidence man so typical in the money business, offering charm and good stories that impress the naive. Meanwhile he offers no regret or even acknowledgement of the losses suffered by his customers. Instead he talks in circles, ignoring the 72% declines and referring to a recent bounce from the lows (Shanghai up 12% since June) as evidence that he has been correct in his thesis. All of which reminds everyone that for investment purposes, we listen to the sales force at our extreme capital peril.