Hedge Funds Bet Against China


Inquiring minds are reading that the betting line has China as an underdog. The Telegraph is reporting that hedge funds have seen the data and expect that China’s bubble is about to burst:

Green didn’t need to go over Britain’s experience during the same period for most to agree that plugging into China’s blistering growth – predicted by the IMF to be 10.5pc this year – was of “vital importance” to the UK.

But even as he spoke a hedge fund manager in Mayfair was poring over spreadsheets of sovereign and corporate credit default swaps, interest rate and foreign exchange options with one aim: to “get short on China”.

The manager, who wanted to remain anonymous, said: “The Chinese delegation has said all week that there will be double-digit growth for years to come and the Brits have lapped it up. But the data doesn’t add up. We think we’ve experienced credit bubbles over the past few years, but China is the biggest. And yet the global economy is looking to China as not just a crutch but a springboard out of the recession. It’s crazy.”

China, do you hear that bell? For whom does it toll? It tolls for thee.

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One Response

  1. i’m curious. is it possible to short sell, a hedge fund?

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