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Monday, December 9, 2013

What Is Jim Chanos Shorting ? Take A Look

Chanos: “We’re very bearish on coal for a variety of reasons. I think it’s the flipside of the shale gas boom in the U.S. But you’re even beginning to see some movement shockingly in China to cut back on burning coal because, let’s face it, the pollution issue there…I think that it’s still cheaper in the European markets and Asian markets to burn coal than natural gas but that’s because natural gas is $10-12 and $14-16 in Asia. There’s more and more coal being mined similar to this boom, so the supply keeps coming. In the U.S., there’s additional issues and that is, the EPA is on the case here pretty diligently — on top of the real substitution effect that natural gas has. We’re pretty much short all the leveraged coal companies with one exception, which is one of our hedges. But you can assume pretty much that we are short all of the leveraged coal companies. If you look at the numbers in the coal companies, these are companies, really, some of them in financial distress or about to be.”

http://blogs.reuters.com/unstructuredfinance/2013/12/09/jim-chanos-bad-news-bear-urges-market-prudence/

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