China bubble to end commodities supercycle: Chanos

Wednesday, 17 Jul 2013 | 8:11 AM ET
Chanos: China 'great place to be short'
Wednesday, 17 Jul 2013 | 7:07 AM ET
The world's largest short-sell, James Chanos of Kynikos Associates, weighs in on why he believes investors are "misled by Chinese GDP numbers," and how he is making money there. And Chanos provides his perspective on the Fed's asset-buying program.

The credit bubble in China is "world-class" and is getting "worse and worse and worse," hedge fund manager Jim Chanos told CNBC on Wednesday.

The deteriorating credit situation "has worked its way through things like steel, cement, [and] commodities globally," the founder of Kynikos Associates said in a "Squawk Box" interview from New York at the 3rd annual Delivering Alpha Conference, presented by CNBC and Institutional Investor.

Chanos, who first raised concern about China in 2009, added that he's "seeing arguably the end of the commodities supercycle," the boost for raw materials fueled by the rise of the economies of China and other emerging markets.

The closely followed short-seller said he has made money betting against Chinese real estate, banks, steel, and cement. "The stocks have all gone down."

When Chanos was on "Squawk Box" back in March, he said to avoid investments that depend on the growing Chinese real estate market bubble.

(Read more: China's 'Ghost Cities' Warn of Property Bubble: Chanos)

But he did acknowledge on CNBC Wednesday, "The credit cycle that we saw, which we thought would happen first in real estate, has not happened."

"Real estate has actually held up," he admitted, but affirmed that he still thinks it's "the next shoe to drop."

—By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC. Maneet Ahuja, CNBC's hedge fund specialist, contributed to this report. Follow her on Twitter @WallStManeet.


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