Additional Info on China

Interesting read on Bloomberg website.  Jim Chanos who has been short China banks claims that the government sovereign fund that invested in the four largest Chinese banks yesterday did not do so because of confidence in the outlook of these banks but rather because they are on the brink of severe issues.

According to Chanos:

“The fact that people are even talking about the government stepping in to shore up the banks, when two months ago people thought there was nothing wrong with the Chinese banks, should tell you just how seriously this situation is deteriorating.”

In addition:

Chanos, who told Bloomberg News last month he was selling short shares in “virtually all of the large banks in China,” said today that the country’s property market is in the “first parts of a very serious pullback.” China’s home transactions fell during last week’s public holidays after residential prices posted their first monthly decline in a year, according to Soufun Holdings Ltd. (SFUN), China’s biggest real estate website owner.

If property values are experiencing the beginning of a bubble burst in China, the outlook that I gave yesterday may have to be tempered quite a bit.  Stay tuned.