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 ChanosI used to think that good short-sellers could be trained like long-focused value investors because it should be the same skill set; youโre tearing into the numbers, youโre valuing the businesses, youโre assigning a consolidated value, and hopefully youโre seeing something the market doesnโt see.But now Iโve learned that thereโs 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 ChanosOur concerns about what we saw in Australia: an economy clearly tied to China has hitched its wagon to the tail of the tiger. In terms of the general complacency, what we heard over and over from investors and clients and potential clients is, 'yes, yes, there are some excesses, but the government will figure out a way.
James Chanos