Jim Chanos Presentation Video On China, Shanghai 200DMA Chart ($SSEC)

Short seller Jim Chanos (Kynikos Associates) has been bearish on China for a while now.  Below he makes his case in a 57 minute presentation. I first found this at Big Picture.  I also put up a 3 year chart of the Shanghai Composite ($SSEC) below which is trading 2 points above the 200 day moving average.  Below that level, if confirmed, would be bearish with heavy overhead resistance. I looked at $FXI and $SSEC a week ago and provided different views of China's economy. Chanos thinks "there are classic pockets of overheating and overindulgence".  It is not a secret that China is tightening a bit. Is it already priced in or is there more adjustment ahead?

China Banks Tightening Standards for Loans To Property Sector (iMarketNews)
Shanghai equities at lowest since Oct (People's Daily Online)
Economic fears pull US copper futures below $3/lb (Reuters India)
China curbs companies’ capital raising (FT.com)
Tightening fears give rise to China 'buy' opportunities (FT.com)
Chinese Tightening Unlikely to Cause Copper Collapse (WSJ.com)
Chinese mortgage rates rise as loan clampdown bites (Reuters)

There are also geopolitical tensions going on between China the US about Obama's Dalai Lama visit, internet censorship, Yuan pressure, trade and arms sales to Taiwan.  So interesting times folks. Jim Chanos correctly shorted Moody's while Buffett was buying in May 2007. Today he is taking the other side of "BofA Merrill Lynch, CLSA Ltd., Morgan Stanley and Macquarie Group Ltd." who believe that "Chinese equities may soon rebound." (BusinessWeek, 2/3/2010).

$SSEC, Shanghai Stock Exchange Composite (Courtesy of Stockcharts.com)

Jim Chanos will be on Squawk Box tomorrow morning (Feb 4).

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