Chanos Lives for Contagion

Although it is unlikely Jim Chanos took out a subprime loan to finance his lavish East Hampton spread, he seems to be intimately familiar with the smoke and mirrors employed by the industry. And he is comparing the situation to Enron circa 2001.

``When the accounting drives the transactions you have to be very careful,’’ he said. ``When the smoke clears, we often don’t see that these assets were undervalued. We see that they were overvalued.’’ Bloomberg

Chanos is getting more vocal about his short position in Moody’s.

Chanos said in May that Moody’s might face lawsuits for keeping its ratings of subprime loans too high.....Moody’s is ``integrated into the whole underwriting cycle of structured finance,’’ or bonds based on the repayment of mortgages and other loans. ``We believe they and the other rating agencies have been reticent to downgrade anything.’

Are you piggybacking him on this one?

Chanos of Kynilos Says “Contagion Spreading in Mortgage Market
Bloomberg
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No position in securities mentioned

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