NEW YORK, Jan. 7 (UPI) -- A prominent Wall Street investor has predicted that China's booming economy is a bubble in the making -- perhaps several -- due for a massive crash.
With the flood of money headed to China, which steered clear of the recession and expects economic growth above 8 percent, hedge fund manager James Chanos said signs point to China as "Dubai times 1,000 -- or worse," The New York Times reported Thursday.
"Bubbles are best identified by credit excesses, not valuation excesses," Chanos said recently. "And there's no bigger credit excess than in China."
Chanos, who manages a $6 billion hedge fund, called Kynikos Associates, has made his reputation and his fortune on short selling, which is how investors make money on companies that have falling share values.
Not everyone sees the writing on the wall, as he does.
"I find it interesting that people who couldn't spell China 10 years ago are now experts on China. China is not in a bubble," Jim Rogers, co-founder of the Quantum Fund, told the Times.
"He homes in on the excesses of the markets and profits from them. That's been his stock and trade," said Jim Grant, editor of Grant's Interest Rate Observer.
