Chanos: Short Sellers Are Financial Detectives

Chanos: Europe Returning to Ways of 1930s

Chanos Says Put All of U.S. Budget On the Table

Jim Chanos, founder of Kynikos Associates Ltd., Wesley Clark, a retired U.S. Army General, and Howard Lutnick, chief executive officer of Cantor Fitzgerald LP, talk about the U.S. fiscal cliff, the economy and budget policy.

Jim Chanos Still Shorting Chinese Banks

Jim Chanos (CNBC): HP remains a value trap

“This whole thing is a debacle and probably should have never happened. We had been short Autonomy in our European fund in 2010 and 2011, and watched in horror as it was taken out at a big premium by Hewlett-Packard. It was one of our absolute favorite shorts at the time.”

“It was pretty clear if you look at Autonomy’s books over time that it was a very, very aggressive roll-up. It was buying other companies. It was writing them down before it bought them and putting all kinds of goodwill on its books, which most accounting mavens know is a real way to play earnings games if you want to.”

Chanos remains short HP, calling it a value trap
“This [HP] is a company that, as you know, our thesis was they have been basically offsetting a decline in their business by making acquisitions. In this case, almost disastrous acquisitions.”

Jim Chanos on Short Selling, Hedge Funds, Election

Jim Chanos, founder and president of Kynikos Associates, talks about short-selling opportunities, strategy in technology and banking stocks, and the hedge-fund industry. Chanos, speaking with Betty Liu at the Clinton Global Initiative in New York, also discusses the U.S. election.

Jim Chanos: Is HFT Just a Better 'Mouse Trap' or Unfair?

Jim Chanos discusses whether high-frequency traders have an unfair advantage over the individual investor.

Jim Chanos Covers Shorts on Health Care

Jim Chanos: Long Financials, Short Tech

Investors should avoid the whole PC chain. Apple as well as the cloud are changing fundamentally the way we gather data. We're not long Apple. Interestingly we're long Microsoft and Oracle against our HP short ... You want to be sure the actual PC hardware, you want to be short printers, you want to be short ink.

We believe in the concept of the deleveraging credit python and if you think about the three little pigs in the python, the US is the pig at the end of the credit python, Europe is the pig in the middle of the python and our friends in China are the pig going into the python. In any case I think the US is coming out of this ... We're long JP Morgan, we're long Citi actually. 

Why Jim Chanos Is Short China

We get criticized because China is not lying there in smoke and ruins. We've done just fine in China. I think what we're seeing is the model, the economic model everybody trumpeted three years ago, when I first started talking about it here, is under a lot of scrutiny...

We've cautioned people that China's net exports is a very small part of their economy, but gross exports is very large, it's almost 40% of the economy. sort of 40% exports, 37% imports for net three, but if the 40 drops to 35, you can have problems. The other interesting thing that's new in China is that we are beginning to see not the trade export balance decrease, which has been happening, but now capital is going out of China. so they're actually seeing a deficit in terms of investment. well, hot money is leaving... It's a huge, huge change and it's going to make the policy much harder to implement from Beijing,

Jim Chanos: Hewlett Packard 'Ultimate Value Trap'

"What they will tell you is that the stock is cheap, with a forward P/E of 5, an enterprise value to EBIT of roughly 6 times, and great free cash flow, free cash flow yield of 10.7% using the latest 12 month figures, and a company that’s buying back lots of stock. All the classic signs of a great value situation, hopefully. There’s a fly in the ointment. In the case of Hewlett-Packard and a number of other well-known marquee technology companies, they are hiding their R&D spending through acquisitions. This is an important concept that a lot of people miss. If you look at HP’s revenue stream, it’s basically flat over the past four or five years, their cash flow is basically flat over the past four or five years. But they have done $36 billion in acquisitions over that time frame. Those acquisitions have enabled them to maintain a revenue base and see a declining cash flow base. Those are maintenance capital expenditures or maintenance R&D hidden as acquisitions ... In addition, the balance sheet has been destroyed here."

“People will still buy PCs. It just won’t be a very profitable business”

(Video) Recent Jim Chanos interview

From June 26, 2012

Jim Chanos on His Big China Short

[From Maneet Ahuja's Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds]

His Positioning:
Kynikos is short the property developers in China through the H-shares in Hong Kong as well as most of the larger Chinese banks, which the firm believes are going to need ongoing injections of capital, much of which will come from Western investors. The fund has been short an oddball collection of one-off Chinese companies, such as Chinese Media Express, that have floated issues in the United States. Chanos has dubbed casinos "long corruption, short property." But his overall short in China stands as one of the highest exposures he has had to a single theme. China is one thing he's betting against in a big way -- it currently stands as the highest exposure he's ever had to a single theme in the portfolio.

Chinese equity markets:
"So I think it's very problematic for Western investors to make money in the share market in China. Not only because I think the macro's bad, I think the micro's bad, too. You're basically being fleeced as the Western investor in many of these companies."

Chinese Debt:
"We estimated that China's total debt reached about 180 percent of GDP in late 2011. If we assume that China will grow total credit this year between 30 percent to 40 percent of GDP, and half of that debt will go bad, that is 15 percent to 20 percent. Say the recoveries on that are 50 percent. That means that China, on an after write-off basis, may not be growing at all. It may have to simply write off some of this stuff in the future so its 9% growth may be zero."

Jim Chanos Says Chinese Banks `Built on Quicksand'

Jim Chanos, founder of Kynikos Associates Ltd., talks about the importance of short selling to markets, his investment strategy, and the outlook for China's economy and banking industry. He speaks with Stephanie Ruhle at the Milken Institute 2012 Global Conference in Los Angeles.

Jim Chanos is short Netflix, Coinstar, and Dell

Jim Chanos is short Netflix, Coinstar, and Dell. When it comes to shorting, he focuses on flawed businesses, accounting problems, and technological changes over valuation which he says is the least important factor.

Jim Chanos continues to be bearish on China

With growth slowing, particularly in the real estate sector, Chinese banks have been a great place to bet against, hedge fund titan Jim Chanos told CNBC.

Chanos, the head of Kynikos Associates, has been betting against China — despite its role as a global economic leader — primarily because he believes the country is overbuilt and does not have the internal demand to support its ambitious growth plans.

Nowhere has that trend been more apparent than in the banking system.

"If you looked at the performance of the banks over the last two years...they have been great shorts. They have been going down — they're down 30 percent over the last two years."

An exchange-traded fund   that tracks the Chinese banks, the Global X China Financials [CHIX], is off about 27% since peaking in November 2010.

Much like in the U.S., there has been talk about breaking up China's large financial institutions because of the danger their failure would pose to the broader economy. And, like the American quandary, taking down the big banks is be easier said than done.

"I would believe it when I see it to break up the banks. In China, remember, the the banks are arms of state policy. They loan because the local party official or regional party official tells them we need a new stadium. They are instruments of state policy. I really doubt the party is going to give up a lever of power by breaking up the banks."

The Communist Party has been rocked lately by scandal, as the wife of local party chief Bo Xilai is a suspect in the murder of British businessman Neil Heywood. For the Chinese political system, the case is a game-changer, in that Bo was considered a rising star in the party and possibly headed for its top position.

"Some people have dubbed the party 'The Family,We're seeing more than a peek behind the curtain, we're seeing a real struggle."

Bloomberg: Hedge Fund Titans

Jim Chanos of Kynikos Associates, Jamie Zimmerman of Litespeed, Michael Novogratz of Fortress, and Steve Kuhn of Pine River Capital, discuss the history of the hedge fund industry and government regulation.

Chanos, Zimmerman on Hedge Fund History

Jim Chanos of Kynikos Associates, Jamie Zimmerman of Litespeed, Michael Novogratz of Fortress, and Steve Kuhn of Pine River Capital, discuss the history of the hedge fund industry and government regulation. The full conversation, "Titans at the Table," airs tomorrow on Bloomberg Television at 9 pm ET.

Jim Chanos on CNBC (Dec 9, 2011)

China's currency reserves are not "free money" - there are liabilities against those reserves. Also, the Chinese banking system "is built on quicksand."

Jim Chanos interview on China (Bloomberg)

The Chinese Banking System is extremely fragile (excerpt).

Longer interview

Jim Chanos on Bloomberg (10.28.2011)

Chanos remains skeptical about the situation in Europe. The current European solution is a "band-aid at best." He is still a huge China bear saying that the country remains on a treadmill to hell except they are going even faster. He doesn't believe the numbers coming out of Chinese banks. Moreover, real estate transactions are down 40-60% YoY.