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World best short sellers : Jim Chanos


Jim Chanos
Jim Chanos is certainly one of the best ones. What is he making for living ? Shorting stocks. It's so funny to see Jim Chanos betting against Carl Icahn and   WINNING !

Watch this video!


Jim Chanos is CEO of Kynikos Associates.

We don't know how bad this gets. The problem is we don't know how bad the hole is. And by "the hole," I mean not only what the bad credit is but also the accounting of it. I think we're seeing that a lot of financial institutions probably weren't as profitable as we thought they were. That is, they showed big profits and everyone got big bonuses on the way up, and there are going to be big write-offs on the way down.

Another video.


The name of the game

"That is, they showed big profits and everyone got big bonuses on the way up, and there are going to be big write-offs on the way down."

And this is the primary point of interest (for me). A small number of people in the financial industry make so much money that they don't have an interest in the long term performance of the company (or the effects on the economy or broader population). They just want to make as much money as possible, as quickly as possible, at any cost to their employers (their personal well-being is largely unaffected by any large economic problems that develop from their own recklessness).

Take Mr. Prince for example: His emoluments were 8 figures for years during which he was a terrible leader (of other terrible people who made 8 figures). His reward for being a jackass was a hundred million dollar severence. No matter what damage him and his cronies caused, they are rich beyond fantasy. Imagine building a well-diversified portfolio of equities, bonds, and commodities on his severence. In the most severe economic downturn in history, he would still have the means to throw as many yaht parties as he wants.

These people are dangerous parasites who kill or maim their hosts, which happen to be vital parts of the global financial infrastructure, leaving the damage such that governments have no choice but to socialize the losses.

I don't like to sound from the class-warfare camp, but this is the source of the gross and continually growing inequality in countries that share the American economic paradigm (pretty much everyone except a few "rogue" nations).

Chanos sees raft of new opportunities !


1.Chanos on private equity:

"I don't know what crack pipes these guys were smoking, but some of the valuations were absolute madness."

2.Chanos on satellite and cable communications companies :

"They face a big threat from the Internet in coming years.

Unless they adapt to market changes, these companies will find that more people, particularly the young, will view television shows when they want on their personal computers over the Internet, circumventing cable companies."

3.Chanos on sovereign wealth funds :

"I think you will find out very quickly that they will have their own problems,such funds are heavy financiers of "aggressive" infrastructure projects in China and the Middle East they may fail to find market demand when completed.  "

"Forty percent of China's GDP is construction," Chanos said. "Some of these markets are very dependent on construction."

4.Chanos on government backed student lenders:

"Some of the student lenders have issued large quantities of private, unsecured loans to students, leaving them with tens of thousands of dollars of debt at graduation.    

Now bankruptcy laws do not allow student loans to be expunged through bankruptcy filings.

Congress, particularly if controlled by Democrats, will allow them bankruptcy filings and that could cause serious problems for lenders. "