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James Chanos Quotes

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 Picture Quote #1
Chinais a world class if not the world class property bubble, primarily high-rise buildings, offices and condos Picture Quote #1
I call it the Rule of Three. If you read a company’s financial statements three times, and you still can’t figure out how they make their money, that’s usually for a reason Picture Quote #1
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! Picture Quote #1
Derivatives in and of themselves are not evil. There’s nothing evil about how they’re traded, how they’re accounted for, and how they’re financed, like any other financial instrument, if done properly Picture Quote #1
The interesting thing about the China story, getting back to the macro and micro, and as dire as I think the macro story is - due to bad credit and credit extension that makes Greece and Spain and the U.S. look like child’s play - when you get to the micro of individual companies, they look even worse Picture Quote #1
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While short sellers probably will never be popular on Wall Street, they often are the ones wearing the white hats when it comes to looking for and identifying the bad guys! Picture Quote #1
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 Picture Quote #1
What people don’t realize is that China papered over its last two credit bubbles, those in 1999 and 2004. The banks were never bailed out - they just exchanged their bad loans for questionable bonds from quasi-state organizations Picture Quote #1
The Macau casinos have a wonderful business, it’s taking in money from Chinese businessmen elsewhere who send it through junky companies to casinos to gamble. The growth continues and they have basically western managers and western accounting, so we trust the numbers a little bit more Picture Quote #1
Increasingly, the real estate developers can’t get bank loans for their project financing in China. They’re now going into the Hong Kong market to raise money in the bond market at very, very high rates, as high as 15, 20 percent Picture Quote #1
If you’re a short-seller, that’s a cacophony of negative reinforcement. You’re basically told that you’re wrong in every way imaginable every day. It takes a certain type of individual to drown that noise and negative reinforcement out and to remind oneself that their work is accurate and what they’re hearing is not Picture Quote #1
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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 Picture Quote #1
Dubai was a property bubble. Plain and simple. Go to Dubai and see what happened. It was... what I call it the ‘Edifice complex’ - it’s just, we can grow by putting up lots and lots of buildings and trying to attract people to come here, stay here, and put up offices here and sooner or later, you put up too many Picture Quote #1
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 Picture Quote #1
I’ve learned there’s a big difference between a long-focused value investor and a good short-seller. That difference is psychological and I think it falls into the realm of behavioral finance Picture Quote #1
People who lose money always need someone to blame Picture Quote #1
It’s very difficult in the technology space when you have been leapfrogged to prosper again Picture Quote #1
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Derivatives in and of themselves are not evil. There’s nothing evil about how they’re traded, how they’re accounted for, and how they’re financed, like any other financial instrument, if done properly Picture Quote #1
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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 Quotes) Chinais a world class if not the world class property bubble, primarily high-rise buildings, offices and condos.  (James Chanos Quotes) I call it the Rule of Three. If you read a company’s financial statements three times, and you still can’t figure out how they make their money, that’s usually for a reason.  (James Chanos Quotes) 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 Quotes) Derivatives in and of themselves are not evil. There’s nothing evil about how they’re traded, how they’re accounted for, and how they’re financed, like any other financial instrument, if done properly.  (James Chanos Quotes) The interesting thing about the China story, getting back to the macro and micro, and as dire as I think the macro story is - due to bad credit and credit extension that makes Greece and Spain and the U.S. look like child’s play - when you get to the micro of individual companies, they look even worse.  (James Chanos Quotes) While short sellers probably will never be popular on Wall Street, they often are the ones wearing the white hats when it comes to looking for and identifying the bad guys!  (James Chanos Quotes) 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 Quotes) What people don’t realize is that China papered over its last two credit bubbles, those in 1999 and 2004. The banks were never bailed out - they just exchanged their bad loans for questionable bonds from quasi-state organizations  (James Chanos Quotes) The Macau casinos have a wonderful business, it’s taking in money from Chinese businessmen elsewhere who send it through junky companies to casinos to gamble. The growth continues and they have basically western managers and western accounting, so we trust the numbers a little bit more  (James Chanos Quotes) Increasingly, the real estate developers can’t get bank loans for their project financing in China. They’re now going into the Hong Kong market to raise money in the bond market at very, very high rates, as high as 15, 20 percent  (James Chanos Quotes) If you’re a short-seller, that’s a cacophony of negative reinforcement. You’re basically told that you’re wrong in every way imaginable every day. It takes a certain type of individual to drown that noise and negative reinforcement out and to remind oneself that their work is accurate and what they’re hearing is not  (James Chanos Quotes) 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 Quotes) Dubai was a property bubble. Plain and simple. Go to Dubai and see what happened. It was... what I call it the ‘Edifice complex’ - it’s just, we can grow by putting up lots and lots of buildings and trying to attract people to come here, stay here, and put up offices here and sooner or later, you put up too many  (James Chanos Quotes) 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 Quotes) I’ve learned there’s a big difference between a long-focused value investor and a good short-seller. That difference is psychological and I think it falls into the realm of behavioral finance  (James Chanos Quotes) People who lose money always need someone to blame  (James Chanos Quotes) It’s very difficult in the technology space when you have been leapfrogged to prosper again  (James Chanos Quotes) Derivatives in and of themselves are not evil. There’s nothing evil about how they’re traded, how they’re accounted for, and how they’re financed, like any other financial instrument, if done properly  (James Chanos Quotes)