Uh-Oh: Now Jim Rogers Is Warning About The Chinese Property Bubble
John Carney | Jan. 19, 2010, 10:28 AM
Jim Rogers is now saying that property prices in Shanghai and Hong Kong may be an inflating bubble set for a painful pop.
Recently, Rogers’s bullish views on China have been contrasted in numerous media stories to the bearish views of Kynikos hedge fund manager Jim Chanos, who has been publicly warning of a China bubble.
In a Bloomberg story out this morning, Rogers seems to be changing or clarifying his views. Now he’s warning that property prices are being driven higher by speculative demand. When it comes to property values there doesn’t actually seem to be much distance between Chanos and Rogers.
“Certainly, Shanghai real estate or Hong Kong real estate should decline,” Rogers said in an interview in Bloomberg’s Singapore bureau. “My goodness, if anything’s in a bubble in the world, that and U.S. government bonds are certainly very overpriced.”
But don’t put Rogers in the same camp as Chanos yet. While Chanos thinks the popping of the property bubble will have deep and destabilizing effects on the Chinese economy, Rogers is still bullish overall on the broader Chinese economy.
And he's still saying that Chanos doesn't understand China. "His remarks show a lack of understanding about Dubai and of China. Dubai's economy is built on real estate speculation, whereas China's is not. It is just part of the Chinese economy," Rogers was quoted as saying in the official Chinese Communist Party newspaper.
And Rogers seems confident the Chinese government can manage a soft-landing.
“China now realizes that they’ve created too much money, that prices are going up too much and they’re trying to slow things down,” Rogers said in the interview. “These things are designed to take some of the heat out of the economy. Let’s hope it works.”
But Rogers isn’t shorting Chinese stocks and says he hasn’t sold anything, he hasn’t bought any stocks since November 2008.
For some of us, Rogers confidence that the Chinese property bubble will be contained and won't spill over to create troubles in the financial sector and the broader economy sounds a bit too reminiscent of similar assurances about the US housing bubble. In fact, we seem to be moving through the same stages from bubble denial to bubble containment.
Let's just hope the notion that "it's different in China" meets a better fate than "it's different this time."
.
__________________
"we aspire in the near future to the return of Iraqi dinar to what it was in the seventies and the beginning eighties against the dollar" - Dr. Shabibi
"it is impossible to mentally or socially enslave a Bible-reading people." - Horace Greeley, founding editor of the New York Tribune
John Carney | Jan. 19, 2010, 10:28 AM
Jim Rogers is now saying that property prices in Shanghai and Hong Kong may be an inflating bubble set for a painful pop.
Recently, Rogers’s bullish views on China have been contrasted in numerous media stories to the bearish views of Kynikos hedge fund manager Jim Chanos, who has been publicly warning of a China bubble.
In a Bloomberg story out this morning, Rogers seems to be changing or clarifying his views. Now he’s warning that property prices are being driven higher by speculative demand. When it comes to property values there doesn’t actually seem to be much distance between Chanos and Rogers.
“Certainly, Shanghai real estate or Hong Kong real estate should decline,” Rogers said in an interview in Bloomberg’s Singapore bureau. “My goodness, if anything’s in a bubble in the world, that and U.S. government bonds are certainly very overpriced.”
But don’t put Rogers in the same camp as Chanos yet. While Chanos thinks the popping of the property bubble will have deep and destabilizing effects on the Chinese economy, Rogers is still bullish overall on the broader Chinese economy.
And he's still saying that Chanos doesn't understand China. "His remarks show a lack of understanding about Dubai and of China. Dubai's economy is built on real estate speculation, whereas China's is not. It is just part of the Chinese economy," Rogers was quoted as saying in the official Chinese Communist Party newspaper.
And Rogers seems confident the Chinese government can manage a soft-landing.
“China now realizes that they’ve created too much money, that prices are going up too much and they’re trying to slow things down,” Rogers said in the interview. “These things are designed to take some of the heat out of the economy. Let’s hope it works.”
But Rogers isn’t shorting Chinese stocks and says he hasn’t sold anything, he hasn’t bought any stocks since November 2008.
For some of us, Rogers confidence that the Chinese property bubble will be contained and won't spill over to create troubles in the financial sector and the broader economy sounds a bit too reminiscent of similar assurances about the US housing bubble. In fact, we seem to be moving through the same stages from bubble denial to bubble containment.
Let's just hope the notion that "it's different in China" meets a better fate than "it's different this time."
.
__________________
"we aspire in the near future to the return of Iraqi dinar to what it was in the seventies and the beginning eighties against the dollar" - Dr. Shabibi
"it is impossible to mentally or socially enslave a Bible-reading people." - Horace Greeley, founding editor of the New York Tribune