Comments on: Thomas Friedman Tries To Give Short-Selling Advice To Jim Chanos http://blog.macroaxis.com/2010/01/13/thomas-friedman-tries-to-give-short-selling-advice-to-jim-chanos/ Macroaxis Blog Tue, 01 Nov 2011 00:54:22 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Michael Pettis http://blog.macroaxis.com/2010/01/13/thomas-friedman-tries-to-give-short-selling-advice-to-jim-chanos/#comment-19023 Michael Pettis Fri, 29 Jan 2010 04:57:34 +0000 http://www.businessinsider.com/thomas-friedman-tries-to-give-short-selling-advice-to-jim-chanos-2010-1#comment-19023 You say:  "Has he really considered shorting various countries, but then always passed up when considering their $2 trillion in foreign currency reserves? What other country has this ever applied to? (<em>And since we don't  think it's ever applied to another country in history, how could this possibly be a rule, or a guide to whether or not China is a bubble</em>)." Actually, there are two cases in history of countries with equiivalent levels of reserves (as a share of global GDP).  The US in 1929 was bigger and Japan in 1989 was a little smaller.  Needless to say the argument that they would have been terrible shorts is not an especially strong one. You say:  “Has he really considered shorting various countries, but then always passed up when considering their $2 trillion in foreign currency reserves? What other country has this ever applied to? (And since we don’t  think it’s ever applied to another country in history, how could this possibly be a rule, or a guide to whether or not China is a bubble).”

Actually, there are two cases in history of countries with equiivalent levels of reserves (as a share of global GDP).  The US in 1929 was bigger and Japan in 1989 was a little smaller.  Needless to say the argument that they would have been terrible shorts is not an especially strong one.

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