Chanos: US Municipal, State Debt Woes Similar To Those Of Greece -Fox Business
DOW JONES NEWSWIRES
Short-term seller James Chanos, chief of hedge-fund firm Kynikos Associates, told Fox Business Network Tuesday that states and municipalities in the U.S. could face a debt problem similar to that afflicting Greece and other southern European countries.
"Municipal debt and state debt is going to be a big problem going forward," Chanos said. He said state and local governments face a "demographic bulge" in maintaining pension payments to retired workers, who are retiring at earlier ages.
"The numbers just don't work. They really just are daunting, similar to Greece and some of the southern European countries," he told Fox Business.
Chanos also said banks will face smaller profits, as they come off what he called "life support" from the government, and face lower fee income, less leverage - and proposed rules to make derative trading transparent. "If that goes into complete transparency, a lot of profits in the banking system will come out of the derivative system," Chanos said.
Chanos also warned that China's real estate boom is "not sustainable." "Construction is a low-quality form of GDP growth. It is not sustainable. Otherwise, they're on a treadmill to hell," he said.
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