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Chanos Sees more short opportunities in US market – Reuters

As the last of the bears capitulate, Jim Chanos is standing firm. He is actually seeking to raise more money as he is finding more and more opportunities to get short the US market according to an interview Chanos did with Reuters recently. There are many great quotes in the interview so I would advise you to read the full article. As usual it’s hard to disagree with Chanos’ arguments, especially given his track record.


From Reuters:

Jim Chanos, bad news bear, urges market prudence

SF Fed Head Williams Doesn’t Understand Stock Market Valuation

San Francisco Fed President John Williams has publicly announced he can’t recognize an overvalued stock market when it’s right in front of him. Speaking at a press roundtable following the Asia Economic Policy Conference at the Federal Reserve Bank of San Francisco on Tuesday, Williams said:

“If you look at the valuation of stocks today compared to earnings and dividends and relative to historical averages, it’s not obvious that the stock market is overvalued, in fact a lot of models will tell you that it’s undervalued given how strong profits have been.”

Source: Marketwatch SF Fed’s Williams: ‘it’s not obvious that the stock market is overvalued’

You mean current profits with margins 70% above historical norms? Combined with a CAPE ratio of 25, overbullish sentiment as measured by investors intelligence and almost guaranteed mediocre returns over the coming decade (using valuation methods that actually have a high correlation with subsequent returns).

But don’t worry about any of that. Keep moving folks, nothing to see here.

Lakshman Achuthan Triples Down on Recession Call.

Achuthan doesn’t back down on his recession call. Interesting point about the ISM’s being negatively correlated with production, ie that recent spikes in ISM indices are not good news.

Jim Chanos, Jim O’Neill on Chinese Economy and Real Estate

Jim Chanos and Jim O’Neil discuss their views on China with Tom Keene of Bloomberg, September 24th, 2013

Who would’ve thunk it? QE doesn’t work

So if QE doesn’t work, what does that say about the current bull market which is based in large part on the Fed not taking the punch bowl away? Clearly, that the perception that QE works is more important in the short term that the reality that it doesn’t. But carry on buying stocks, nothing to see here. From Washington’s Blog via

Academic Studies Show QE Doesn’t Work

Matt Taibbi, Sam Seder on Alex Pareene Popping CNBC’s Bubble

A good summary of what is wrong with the mainstream media when reporting about major financial institutions.

Ritholtz on Bloomberg

Always worth a listen, Barry Ritholtz of Fusion IQ.

Achuthan Holds Firm on Recession Call

China’s Property Bubble on 60 Minutes

Just a few years back the suggestion that China’s property market looked like a bubble was met with derision by a cadre of China bulls. You remember the arguments, don’t worry about those empty buildings, millions of Chinese are moving from rural areas and they need somewhere to live. Never mind that they will be earning two dollars a day and can’t afford the rent let alone the cost of ownership of a $60,000 apartment. Thankfully today those views just seem plain silly, ghost cities are not just some urban legend or one-off anomaly, they are everywhere in China as evidenced in this recent piece on 60 minutes. This will not end well.

Can You Trust Chinese Numbers?

We often hear allegations that Chinese economic numbers are fudged. It’s hard not to jump on that bandwagon when you see how the Chinese numbers come out exactly as the central planners said they would, for example the carefully engineered slowdown in growth to between 6- 7% in 2012. Whilst I have always been skeptical of the numbers, I don’t want to repeat the same conspiracy theory arguments of manipulated numbers without evidence. In the clip below, Gordon Chang points out the discrepancy between export numbers reported by China and the import numbers of other countries in this case Korea. Whilst it may not be a smoking gun it sure does raise a red flag.