From the AFR:
Chanos, one of the most prominent China bears, told The Australian Financial Review there was a “clear downturn” in the Chinese real estate market that would affect Australia as demand for iron ore fell.
“The problem that iron ore centric-miners are going to have is new capacity is coming on as demand is falling,” Chanos told the AFR on the sidelines of the SALT hedge fund conference in Las Vegas.
“But we are long BHP and Rio because we think they are reasonably managed. They saw this coming and pulled back a couple of years ago whereas you have companies like Fortescue and Vale that are full speed ahead.”
And the kicker, China’s anti-corruption crusade will pull money out of Australian realty:
…He said Australian property owners and developers that were hoping to sell to Chinese investors should “hit the bid”.
“Those counting on selling to the Chinese people two or three years from now – you might want to rethink that,” he said.
God knows why he’s buying BHP and Rio. If he’s right, they’re going to get cheaper before the good times return. He is also short thermal coal owing to advances in alternative energy sources.
He just loves Australia.
