He talked about the real estate frenzy in Dubai and its aftermath, the pragmatism of the current Greek leadership, the possible contagion in Europe and, most importantly, his lingering doubts about the boom in China.
People have all kinds of reasons to believe that growth in China will continue, but Mr. Chanos told Business Insider that he saw all the signs of huge, unfounded euphoria in the Chinese real estate market.
He sees huge leverage in a country where the average income is around $3,500 a year, as people buy high-end apartments whose mortgage payments equal the revenue of the borrower. The high-rises those apartments are to be found in, he says, make up the bulk of the construction industry in China, and building, in turn, accounts for about half the economy.
While he is certain about where the sector is heading, he’s not sure when. After all, irrationality can last an unreasonably long time.
http://dealbook.blogs.nytimes.com/2010/04/14/chanos-sees-unfounded-euphoria-in-china/
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