Jim Chanos: The fact there's a meltdown among Chinese developers is a major story

Legendary investor Jim Chanos and Carson Block, investor and founder of Muddy Waters Research, join CNBC's Dominic Chu at the Delivering Alpha conference to discuss the meltdown in the Chinese real estate market and how it should be a much bigger story than it is. For access to live and exclusive video from CNBC subscribe to CNBC PRO: cnb.cx/2NGeIvi
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[@capmarketer5038]

Totally agree,, and how many Lehman and Bear Stearns people are behind stupid tricks in Chinese real estate?

[@robertzhang5958]

Chanos makes some decent points, I have no idea what Carson was talking about though

[@Chris-xv7wd]

Take your meds

[@tabtn6844]

What would you say about Canadian residential housing- it is almost 100% of Canadian economy?

[@drmodestoesq]

There's a reason for the expression, "Safe as houses." Ya gotta live somewhere.

[@Piglosi]

Good bye

[@giantWario]

...what? It's 13.5% of Canadian GDP. How could you seriously believe something so stupid? Or were you trolling?

[@tabtn6844]

@@giantWario go to statcan website. The number that you are referring is debt service ratio. Morgtage outstanding is over $2trn..check yourself and dont be so judgemental. Canada is one of the most indebted nations in the world and its formal economy is supported by a quadrupled shadow economy. Canada's intelligence service gave a report to the government in 2021 how organized crime has taken over Canadian public and private sectors and how they use real estate to wash their dirty money. Government just sits on it, proving its hypocrasy.

[@yanzx01]

@@giantWario He’s talking about the total valuation of the Canadian Real-estate market. It is currently 3x the Canadian GDP. The real-estate rental and leasing business however only generates less than 15% of GDP.

[@lppoqql]

China should allow its housing price to fall, that is the only long term path forward for China.

[@BurdenofTheMighty]

It’s so much worse than that

[@davidc2838]

“You Say You Want a Revolution… Well ya know… We All want to Change the World!” - The Beatles Nearly ALL of Chinese Citizens Wealth is tied up and Invested in Real Estate. If the Chinese Government lets the market crash and wipes out nearly ALL of their life savings… You’ll DEFINITELY get that Revolution!! 😂😂

[@wils5923]

Joe Tsai was so smart that while he was on CNBC praising China, he was also moving his asset to the US.

[@levelazn]

China is collapsing upwards

[@DKK]

Finally some truth on China!

[@drmodestoesq]

There's lots of contrary opinions on China. Just have to go outside the mainstream a little bit....not a lot. And I don't mean conspiracy nut channels.

[@Piglosi]

Lol. It's only the narrative that is told

[@kennethli8]

@@drmodestoesq -- There are a few pundits who really understand China. Jim Chanos, Michael Pettis, and Leland Miller are the three people who really understands China. Wall Street is have their heads stuck in the toilet hole.

[@kennethli8]

@@Piglosi - There are a few pundits who really understand China. Jim Chanos, Michael Pettis, and Leland Miller are the three people who really understands China. Wall Street is have their heads stuck in the toilet hole.

[@Piglosi]

The fact that you're talking about China and not the US impending total economic collapse is a major story

[@samwalton4598]

Much respect for Mr. Chanos! However, comparing China to a Japan or any other country with a functioning government and market based economic system is laughable. As well “I don’t think the Chinese government doesn’t have a handle on the situation” is nuancing and a sugar coating. China is in severe trouble with their debt problem which has now been exposed since the advent of COVID. China is fast burning through their dollar stash, accumulated from years of massive trade imbalances, and when that is burned up? They will have to sell RMB for dollars in the spot market to keep their economy functioning day to day. This will have a contractionary effect on the Chinese economy, shrinking, falling GDP, unemployment going up etc.,etc. This will be a long winter for China and the CCP. Kicking the ant mound!! Potential civil unrest and the end of the CCP! It’s amazing that BlackRock and Goldman Sachs are still telling people China is “full opportunity”. And a good investment😂! The whores on WallStreet are telling the sheep to invest to create liquidity for them as they sell what’s left of their huge losses!!

[@paulzhang1310]

i've heard people like you talking about China collapse a lot for the last 20 years ..... well comeback here when China economy surpasses the US .....

[@samwalton4598]

@@paulzhang1310 - Not in your lifetime Pal !!!Dream On Loser!

[@maicolc7216]

Chanos!

[@aliasoma]

If there's a lot of risk of investing in say, TSMC, because of China, shouldn't that be reflected in the stock price? Multiples should be much higher to reflect the risk that investors are taking in investing in them. Same goes for all the companies that rely on TSMC for chip fabrication, Apple, AMD, Nvidia, etc. I know chips are a commodity and are currently going through a trough in the cycle, but I think they are taking a hit to their risk/reward and the China issue is not being priced in.

[@308_Negra_Arroyo_Lane]

What's priced in is the utter impossibility of replacing TSMC. It takes decades of massive investment in production and human capital to make it happen.

[@tooltalk]

​@@308_Negra_Arroyo_Lane : You are conflating TSMC with ASML. ASM is decades ahead of competitors; TSMC just a few years.

[@aliasoma]

@@308_Negra_Arroyo_Lane You think trading at 14x has what you said priced in? This is my point. The risk of investing in TSM is not reflected in their price. Personally, I think even Intel, which is currently trading at just shy of 6x, should also be valued much higher. The world just doesn't get that without either of them the world looks much, much different. It's similar to what's happening with oil/gas right now. Europe is finding out, painfully, what happens when a necessary commodity is suddenly constrained.

[@308_Negra_Arroyo_Lane]

@@tooltalk LoL. Try finding enough chip engineers to work in the US. There are none.

[@308_Negra_Arroyo_Lane]

@@aliasoma What's priced in is government industrial policy, which even if implemented correctly in the US would change with every administration.

[@imeldomarcos4126]

The meltdown was done on purpose.

[@hsiehalex5258]

i dont see china housing price down. Still very expensive

[@titusp9488]

Chinese housing problem is based on idiot regulators who thinks they can "play" with 70% of their GDP because they "understand" it better ... now they screwed up ... no idea how to fix it. Housing liquidity (buy/sell) is totally frozen that is the only reason prices have not dropped significantly ... more significantly ... most 2nd and 3 tier cities are down mid double digits ... only tier-1 cities are "stable" .... but you are RIGHT ... it is still quite expensive.

[@jw999]

Happy waiting

[@noneyabeeysnass8283]

It will eventually crash. It’s impossible not to with the current geopolitical climate going on. The prices are unsustainable for Chinese citizens to pay so dramatically more for properties than their yearly income

[@jw999]

@@noneyabeeysnass8283 Define "crash"... How much %?

[@titusp9488]

@@noneyabeeysnass8283 if eventually means end of time you would be right ... otherwise you are likely to be wrong :)

[@robertcooper1640]

Uh oh

[@PeachGardenOath]

still shorting Tesla Chanos?🤣

[@uberboiz]

what if he is?

[@davidc2838]

@@uberboizHe’s losing his SHORTS AGAIN! 😂😂😂

[@uberboiz]

@@davidc2838 Is that right? Well, I guess that's the risk of shorting a company with no substance/fundamental but plenty of fanboys pushing the price up.

[@Chris-kf3xd]

Fortune 500 CEOs are sheep.

[@gusmanue8337]

Why do people hate on this mn so much, just listen and respect his view.

[@davidc2838]

Because he LIED hundreds of times about Tesla. And LOST craploads of other people’s MONEY shorting Tesla for almost a DECADE. He was WRONG then. He’s WRONG now. And he keeps lying about it still. MOST of Tesla’s Revenue comes from THE US. He KNOWS that…it’s in the ANNUAL Report. But he just keeps lying. It would be embarrassing if it wasn’t a direct attempt at Market Manipulation that CNBC allows. Anything for clicks and advertising $$$. They should definitely make him disclose how massively he’s lost money shorting Tesla. He’d shut up pretty quickly. 😊

[@Mrbfgray]

How about that BABA...looks "cheap". :D

[@SFBAY10]

Completely thrown off by the Dominic's clown socks

[@Jeff-hn8iy]

Think Munger's going to buy the dip on China again? XD

[@evancoles]

Yes

[@caladr9367]

Nope

[@ceejaydeesoozaa]

WOW. NICE CNBC SOCKS WORN BY DOM

[@PCavalier]

First! China’s struggles are highly intriguing. People have been talking about for years now. Is there contagion to the rest of us?

[@DashCamera]

More or less the answer is Yes. No direct exposure to Chinese securities just in the index such as QQQ. Shaking my head for people brainwashed by investing BABA (not trading) for many years…. It’s different mentality values culture policies political party … Do you know BABA has to have CCP director positions and role in company same as others ?

[@anti-bullingjames]

@@DashCamera not sure from where you get it or whether you create that information. based on CCP party own regulations, if over 30% or at least 50 employees are CCP members, THESE MEMBERS need to form a charter. There are no requirements that companies must set up CCP charter or have a CCP member on board. Becoz almost 10% of the population is CCP members and over 86% of the population is members of orgs affiliated with CCP. That's why you can find CCP local charters in many big firms. Also, Alibaba does have a member from the government because of its illegal financial operations a couple of years ago. You probably heard the ant group. It was running a Ponzi schemes alike program, receiving huge fines last year. Government also sent someone to temporarily station there to monitor.

[@kylesmith8128]

China, like the USA, affects the entire world when it rolls over during a nap. So, the short answer is yes. But we will be seeing worldwide fallout from COVID, the Ukraine war, and the general wastefulness and inefficiency of dumb humans.

[@blokin5039]

@@DashCamera Don't care I just upgraded my Baba stock beatch hahahah

[@kennethli8]

@@peterseth3296 -- Really? I'm 100% Chinese and the real estate market in tier 1 cities have been dropping for the past 15 months. Over 13 years ago, my relatives and uncles kept on claiming housing market in China will never fall. Few years later, they changed their tone and said, real estate in most cities will never fall. Fast forward to 2015, my relatives, friends, and uncles said, real estate in tier 1 cities will never fall. In 2019, when Guangzhou real estate (tier 1 city) started to fall, they claimed Guangzhou is not considered a tier 1 city. In early 2021, real estate started to fall in Shenzhen, the most expensive real estate city in China, started to fall. In late 2021, both Shanghai and Beijing real estate started to fall.

[@blahzndef]

Mr. Chu thinks he is safe from China being in the West lol.

[@Michael-ut6mu]

Chinese manias! Apartment building similar to backyard steel furnaces of the 1950s! Useless!🤩🤪🥳

[@sidibouchrit]

In general,no one can fools you ,if you follow Chanos .

[@kennethli8]

Chanos warned about the construction investment (real estate and infrastructure) over 11 years ago. He knew it was impossible to time and was smart enough to stay away from shorting or investing into Chinese assets. :)

[@sidibouchrit]

@@kennethli8 The Chinese are the most traitorous to deal with in any kind of business; How many people have had their companies,organizations ,or investments vehicles, stolen from under them by the criminals communists pagans Chineses? Too many !

[@drmodestoesq]

He's lost truckfulls of money shorting Tesla.

[@sidibouchrit]

@@drmodestoesq , Let’s face it Tesla was going bankrupt so many times; And I am 100% sure , that Chanos was privy to some solid informations regarding Tesla, for him to go shorts Tesla .

[@dep3031]

@@sidibouchrit yet tesla still existing having 4 gigafactories and delivering more than a million vehicles in this year, I guess you and chanos should stop betting against musk

[@jackignatius]

These Masters of the Universe are a dime a dozen, repetitive, and full of pointless blather. Whining rich people...uggh...

[@kennethli8]

Really? I'm 100% Chinese and the real estate market in tier 1 cities have been dropping for the past 15 months. Over 13 years ago, my relatives and uncles kept on claiming housing market in China will never fall. Few years later, they changed their tone and said, real estate in most cities will never fall. Fast forward to 2015, my relatives, friends, and uncles said, real estate in tier 1 cities will never fall. In 2019, when Guangzhou real estate (tier 1 city) started to fall, they claimed Guangzhou is not considered a tier 1 city. In early 2021, real estate started to fall in Shenzhen, the most expensive real estate city in China, started to fall. In late 2021, both Shanghai and Beijing real estate started to fall.

[@CanYTrespectMyPrivacy]

Carson is a bottom feeder, so pay no attention to this guy

[@kylesmith8128]

China still has not come to terms with the Opium wars...that is why they treat foreign investment so badly. Hopefully eventually China can stop worrying about what a tiny island did to it a century ago and come to terms with the fact that it needs to be a world leader. (A good world leader that helps avoid the increasingly probable human extinction event.....)

[@JY88168]

UK isn't a tiny island

[@titusp9488]

yeah ... its like the jews that can't get over holocaust ... in your words ... move on right? FYI - the opium wars lead to a 100 yrs of suffering ... millions had died (much more than 6 million). You are Right - Good leaders avoid world wars : Can't find any one who does not love war these days - who do you know that loves peace and isnt pushing each other to the brink of nuclear war? BIDEN hahahah ?

[@drmodestoesq]

@@JY88168 It's minuscule. Alberta is bigger.

[@davidc2838]

@@JY88168Not very big compared to Greenland, Madagascar, New Guinea, Borneo, etc., etc. Small compared to China is the point.

[@chinheat9565]

Bottom feeders

[@mdo5121]

two sides of the trade....if he has to sell his shorts you the owners of the common win...learn about the market btw making money by shorting takes talent since the market goes up 90 % of the time

[@kennethli8]

Really? I'm 100% Chinese and the real estate market in tier 1 cities have been dropping for the past 15 months. Over 13 years ago, my relatives and uncles kept on claiming housing market in China will never fall. Few years later, they changed their tone and said, real estate in most cities will never fall. Fast forward to 2015, my relatives, friends, and uncles said, real estate in tier 1 cities will never fall. In 2019, when Guangzhou real estate (tier 1 city) started to fall, they claimed Guangzhou is not considered a tier 1 city. In early 2021, real estate started to fall in Shenzhen, the most expensive real estate city in China, started to fall. In late 2021, both Shanghai and Beijing real estate started to fall.

[@titusp9488]

carson block ... not only a bottom feeder ... just a "legal" version of market manipulator Chanos ... no clue about China ... just what he reads in the news ... his understanding of markets are proven on his shorts of TSLA. Chu is trying so hard to be "asian" hahaha

[@ziskokid1]

Tesla is a short...its just getting the timing right.

[@titusp9488]

@@ziskokid1 as oaktree capital howard marks says ... timing is everything but it is very hard ... essentially impossible :) No one has done it consistently

[@rioluna6058]

@@ziskokid1 exactly wait untill the honda electric vehicle release to the market thats the day tesla stock will fall majorly the honda EV that is coming is on a whole other level .

[@davidc2838]

@@ziskokid1Soooo foolish! Shorts have had their arses burned for an entire DECADE! Tesla is the Fastest Growing Manufacturer in the World. It’s growing about 50% per year over the last DECADE and is wildly PROFITABLE. Anyone who doesn’t understand that will FAIL miserably as they lose their butts shorting the stock. Chanos should have to post how much $$ MONEY he’s LOST shorting Tesla. ESPECIALLY how much OTHER PEOPLE’S Money he’s lost. That would shut him up quickly!!

[@davidc2838]

@@rioluna6058GM is making the next Honda EV. Honda is going to lose market share while Tesla more doubles to over 5 Million EVs by 2026.

[@kpduffy]

"Authoritarian, capricious regime" describes most governments in the West. Just look at their heavy-handed responses to Covid. The main difference is that those warts are generally more advertised and discounted in China.

[@aliasoma]

Since you brought up Covid, please do compare how the West and China have handled it and then look at your first sentence again. There's no denying which acted in a more authoritarian, capricious manner.

[@kpduffy]

@@aliasoma I don't disagree. My point is that it's not black and white. More like black and gray. When it came to Covid, we copied China. When it came to blowing a property bubble, they copied us (and did us one better). When it came to stimulus... well, everyone follows the same playbook. Look at green energy, wokeness and imperialism (all destructive). China gets better marks than the U.S. on all three. There's a lot of binary thinking going on with China, mainly good vs. evil. Incredibly dangerous. What's the endgame, decoupling and isolation? Where does that lead?

[@BurdenofTheMighty]

Where do you think the Covid policy came from? It came from China. We were mimicking China.

[@davidc2838]

Go LIVE in an ACTUAL Authoritarian Regime… You’ll find it’s a LOT worse than in the West. But you probably knew that…unless you’re in a Basement in some Authoritarian Regime as a TROLL 🧌

[@kpduffy]

@@davidc2838 Have you ever lived in China? My point was not that China was a bed of roses, but that the negatives were amplified and discounted while the positives were being ignored. So far, the market is proving me right.

[@johnandrew3350]

MEGA heatwaves forever, invest against that, the summer heatwaves will very soon become MEGA heatwaves, the Northern Hemisphere is finished bye bye US

[@caladr9367]

It’s due to El Niño, not a permanent issue

[@rioluna6058]

@@caladr9367 we are now in la niña XD this is the secon year by the way

[@rioluna6058]

so if usa is bye bye and what that makes china they are in the northern hemisphere and not only that but experiecen the longest drought ever.. but i think you are right usa is a "bye bye" so its china

[@davidc2838]

Chicago LOVES having a Warmer Winter and longer Summer. Not a problem hombre!

[@louistan7560]

A welcome lesson for all Chinese. Something they will not repeat again. But the buildings that are built are still standing. Their construction cost would be considered low in time to come. China is a huge country. Property-ownership is tied to Chinese culture and top most in their hierarchy of needs, and as history has shown, property ownership and investment is a pathway to wealth. China will resolve its own problems without the need to listen to the irrelevant noises outside.

[@BurdenofTheMighty]

I wish china luck in doing it. However until those issues are resolved, we will need to decouple

[@kennethli8]

Really?🤣🤣🤣🤣🤣🤣 I'm 100% Chinese and the real estate market in tier 1 cities have been dropping for the past 15 months. Over 13 years ago, my relatives and uncles kept on claiming housing market in China will never fall. Few years later, they changed their tone and said, real estate in most cities will never fall. Fast forward to 2015, my relatives, friends, and uncles said, real estate in tier 1 cities will never fall. In 2019, when Guangzhou real estate (tier 1 city) started to fall, they claimed Guangzhou is not considered a tier 1 city. In early 2021, real estate started to fall in Shenzhen, the most expensive real estate city in China, started to fall. In late 2021, both Shanghai and Beijing real estate started to fall.

[@davidc2838]

NO it won’t. It has to import nearly EVERYTHING or it’s population STARVES. And it imports a TREMENDOUS amount of Energy. And it has counted on a TREMENDOUS amount of Foreign Investment. And they need to Export MASSIVE amounts of products to keep their economy growing. Uncle Xi is going to slam down the Party Line eventually and then there will be ANOTHER revolution. It will go poorly one way or another. They had to quit Zero Covid because they were going to have a crazy protest if they didn’t.

[@robertlee9838]

What's important is, after 2 months, your opinions are still valid? More FDI is moving INTO China is the fact.

[@davidc2838]

No. It’s not. The foreign companies and investors rarely own anything in China. They own partial amounts of the joint ventures. That’s why it’s foolish to invest too much in China. In the long run China (aka Uncle Xi) will Nationalize it. Tesla at least owns its own facilities and factories without a Chinese Partner. But it could / will still get its factories nationalized if (when) China goes to War over Taiwan. Probably before the end of the Decade, unless Taiwan capitulates. Don’t see that happening…so BOOM!! Eventually…